Our first post in the Pricing Series talked about all the different methods you could use to price your services. Yesterday I talked about how your speed at something shouldn’t affect your pricing (which is why hourly is a big bag of suck).

Today I’m going to talk about the 2 pricing methods I use for 90% of my projects and tell you why I like them.


My top pricing method is weekly. I charge $3000/week (as of December 2013) for my services. I think that weekly pricing suits how I want to work with my clients (focused on one project at a time) and aligns well with my clients needs.

It lets me change scope without worrying as long as the new scope also fits inside the allotted time. I love serving my clients and being able to be dynamic. Weekly pricing lets me do that.

When I bill weekly I also know that I only need to work 3 out of 4 weeks in a month to make ends meet. That fourth week can be used to take a break or work on personal projects or if I’m ready to jump into a new project I just schedule it into that week. I’ve never had a client dislike getting to start a week earlier than anticipated.

The other main reason I love weekly pricing is that it fits how I work very well. I hate having many projects on the go. Changing between projects takes me forever and I easily drift into social media.

My productive billable time drops by about 30% when I’m switching between competing projects.

When I’m working on the same project all week I simply get up and get started on the project. Then I have lunch and get back to the project for the week.

I don’t have to decide which of my 5 clients currently has the biggest fire, I just have to work for the client I have booked for the week.

My wife has even noticed my stress level decrease and commented on it.

Flat rate based on value

My second method of pricing structure has been flat rate for fixed features. Yes you take more of a risk here but as you gain experience you also improve at pricing these projects.

I only do weekly now since context switching is something I suck at.

Last year I knew my client was paying $50k a year for a tool. I worked for 4 weeks to replace that tool and charged them $20k for it. That means I made $5000/week but I saved them $30k this year and next year the upkeep on our custom solution (which has features the old tool didn’t) will be less than $20k so they save even more.

Even when I’m billing based on value I treat it internally as a weekly project. So that $20k project was actually set for 6 weeks on my calendar just in case it needed extra time. I still have the advantage of scheduling myself for the proper amount of time and I get to make more than I do with weekly billing.

A word on effective hourly rate

Yes I think that hourly is a dumb way to price your services but I do still have an ‘hourly’ rate. Well actually I have an effective hourly rate.

An effective hourly rate means I take the hours I worked on a project and divide the total project cost by the hours. That tells me how much I really earned on the project. Lets do some math together to show you.

10 hours for $1000 dollars means I have an effective hourly rate of $100/hour.

15 hours for $1000 dollars means I have an effective hourly rate of $66/hour.

See not hard math at all.

I want to know the effective hourly rate of every project I work on and I want to see it over $150/hour. Yes my effective hourly rate is $150/hour (or at least that’s what I want it to be).

Do some projects come in under that mark? Of course some projects do. As I write this I’ve got a project that went over time and was entirely my fault. My effective hourly rate for this project is around $60 at this point.

No it’s not a weekly project and yes there is a personal relationship I am preserving. Be super careful about what type of work you do for friends.

Not a project I love working on as I see that number get smaller and smaller the longer I work on it but that is the reality of working for yourself sometimes.

Setting an effective hourly rate for yourself allows you to evaluate which projects you actually make the most money on. If you’re not making the effective hourly rate you set then you know you need to take a look at your business and change how you do things.


What do you do if most of your projects are smaller like if you typically have 1 or 2 week projects? Getting full payment before a one week project would mean that the client is going out on a limb with you having 100% payment and them having nothing.

I can certainly see how some clients would not love that idea at all.

The best way I’ve seen of dealing with this comes from Bill Erickson. He often does WordPress theme builds on Genesis and many of his projects take a single week.

He links his payment to his deliverables and invoices up front. So on a one week project he will send the invoice on day one with a due date slightly after the project is completed. This gives the client time to check the work out and approve it.

He also doesn’t wait for clients to enter content he ties the project completion to him delivering the theme work. Once that’s done the project is done. If it takes 10 months for a client to add all their content then it takes that long and Bill launches the site after.

I’d recommend listening to Bill explain this himself though. I haven’t talked to him, just listened to him speak so the above is my observations about how he runs his business.

photo credit: pfala via photopin cc