The Benefits and Considerations of Hourly Contracts: A Freelancer's Perspective

As a freelancer, finding the right type of contract can make all the difference in managing your time effectively and getting fairly compensated for your work. One such model that has gained popularity among freelancers is the hourly contract. In this article, we'll delve into the benefits and considerations of using hourly contracts, and explore how they can impact your workflow and client relationships.

One of the main advantages of hourly contracts is that they provide a clear and transparent way to measure time worked on a project. This allows clients to easily determine whether you've met their requirements and deadlines, which can help build trust and credibility in your working relationship. Additionally, hourly contracts offer a level of flexibility that fixed-price contracts may not be able to match. If a client has a smaller job or needs urgent attention, an hourly contract can provide the necessary scope for quick turnaround times.

However, it's worth noting that hourly contracts can also have some drawbacks. For one, they require clients to pay you by the hour, which means you need to ensure you're not getting bogged down in non-billable time. This can be a challenge if you find yourself getting engrossed in a project and don't want to stop working on it just because your client needs something else done. To mitigate this risk, many freelancers use tools like apps that monitor usage and provide screenshots of what they're doing. These tools help ensure that clients only pay for billable time, reducing the likelihood of disputes or overpayment.

Another consideration is the potential appearance of impropriety if you're not careful. With hourly contracts, it's easy to get into bad habits like chatting with colleagues during work hours or using company resources for personal projects. To avoid this, freelancers need to be diligent about keeping their usage in check and ensuring that only billable time is recorded. This may involve setting up separate monitors or apps to monitor your activity, or being mindful of how much time you spend on non-billable tasks.

Despite these challenges, hourly contracts can offer significant benefits for freelancers who value flexibility and clear communication with clients. By using an hourly contract model, you can demonstrate your expertise and get fairly compensated for your work. This is particularly valuable if you're working on a project that requires specialized knowledge or skills.

One of the most important things to keep in mind when considering an hourly contract is the duration of the project. Fixed-price contracts typically offer more predictable revenue streams, but they also mean that freelancers need to be very productive and efficient over a longer period. In contrast, hourly contracts often provide more flexibility and allow for quick turnarounds, which can be beneficial for projects with tight deadlines.

For beginners, it's recommended to start out with fixed-price contracts or smaller hourly jobs to gain experience and build your portfolio. As you gain more confidence and expertise, you can move on to longer hourly contracts that offer more stability and predictable revenue streams. It's also essential to negotiate the full price of the job upfront with the client to avoid any misunderstandings or disputes.

In conclusion, hourly contracts offer a flexible and transparent way to measure time worked on a project, which can be beneficial for freelancers who value clear communication with clients. However, they require careful management to ensure that only billable time is recorded and that you're not getting bogged down in non-billable tasks. By understanding the benefits and considerations of hourly contracts, freelancers can make informed decisions about their workflow and client relationships, and build successful careers on their terms.

**Additional Considerations**

For those looking to explore other contract models, it's worth noting that fixed-price contracts can be a good option for smaller projects or jobs with tight deadlines. However, they often require more upfront planning and risk management to ensure success. Some freelancers prefer fixed-price contracts because they offer more predictable revenue streams, but this may come at the cost of having less flexibility in terms of scope or timeline.

Ultimately, the choice between hourly and fixed-price contracts depends on your individual needs, skills, and preferences as a freelancer. By understanding the benefits and drawbacks of each model, you can make informed decisions about your workflow and client relationships, and build successful careers that meet your goals and values.

"WEBVTTKind: captionsLanguage: enwelcome back to the road to the machine learning freelancer tutorial series this is part 5 in parts where I talk a little bit about my nightmare scenario with a client who tried to jack me a $500 I tell you the warning signs how to make sure that doesn't happen to you so if you missed it make sure to go check it out today's video I'm going to talk to you about how you should get paid so on most of these platforms they have a couple different payment method options of course your settle up work in an upward you have basically two main options you can get paid on as a fixed price or as an hourly contract so let's talk about the fixed price budget first so I like these for smaller projects that I know I can get done and a relatively short amount of time and I can maximize my dollar per hour value right as a freelancer you're always looking to maximize your income while simultaneously optimizing for quality to the client right you don't want to produce shitty work because they're gonna leave you a bad review and the jig is up right then your that's game over right you got to produce good work but you want to be paid a premium for that because we are doing premium work right writing code is not something everybody can do good developers which is to say developers who are easy to work with are hard to come by and so if you're good developer you should definitely be charging a premium and fixed price contracts allow you to do that you have two different options you can get paid at the end of the contract or you can get paid by milestones now this is going to depend on the how the project is structured it you're just writing a quick little script to do one simple thing then you may want to get paid just all at once at the end of the contract now keep in mind you've already vetted the client to make sure they don't have bad reviews you've made sure they don't exhibit ending the red flags we talked about a part four and so you can have a decent amount of trust if the client isn't going to pull any shenanigans down the line it's okay to get paid at the end for the work you're doing if it's a longer and more involved project you want to set it up by milestones now this is very tricky typically what you'll find on most projects is that stuff takes two to three times longer than you expect and that is a rule other than in graduate school it is an ad so that rule every time I've said this project will take X hours it is always 2x so keep that in mind when you're budgeting the amounts for each milestones you need to take into account the fact that you're an encounter problems you're gonna have issues general snagger that is going to make it take longer and hence you should get compensated more because you are suffering more right so if you're doing a longer project definitely break it down by milestones think very very carefully about the deliverables so that way there are no surprises for you or the client and make sure you're getting fairly compensated now for longer more ongoing projects I like the IRA payment model and this is for a number of reasons so upward when a client is looking for freelancers or when they're posting a job they can actually put in the number of hours worked as a criteria for the job now you can still apply it just means that you don't meet their preference that's right you're free to apply but you they may overlook you because you don't meet that particular requirement and of course the way you you get hours is by taking hourly contracts and so one reason you love gnarly contracts is because it gives you a little bit more visibility in the search engine gives you better visibility when you're applying for jobs and of course the other reason is you get fairly compensated for your time now this is a double-edged sword here because if you're like me sometimes we'll find yourself thinking about a project trying to solve one little issue of it and of course you can't really build for that time so you have to be very careful and policing yourself to make sure you're not doing too much work outside of billable time the other downside is it installs you have to install an app on your PC or a laptop that monitors your usage it tells the client you know number of clicks per hour number of keystrokes general activities so they just leave it running they're going to know right there's no activity and that's the danger in thinking too much while you're while you're billing for time right is that you don't want to give the appearance even if you're say they're actively thinking how you want to approach a problem which is billable time because you are you know you could be using those cpu use brand cycles for something else but you're using it for the project it's billable time but it can give the appearance of impropriety so you have to be very careful with that and the more you charge the more scrutiny you're going to invite so just keep that in mind so if you have to stall the app it monitors your usage and it takes screenshots of what you're doing so be careful with what you have open if you have two monitors set it to record one monitor put your music your Pandora or whatever on the other monitor if you're having you know easy Skype chat or whatever put that on the other monitor to make sure they don't see it and of course don't don't get paid for chatting with people but you know it happens sometimes people will send you a message and of course with how are they contracts you can bill for the amount of time you talk to the client or their team now this is incredibly valuable because you want to guard your time right you are the expert you are the data scientist you need to be paid for your expertise and if you're on a fixed price contract you can't really do that right they're gonna be use the holy hell out of your time because they can write you're not getting paid by the hour or so they can just tell you you think you know summon you in slack or in or Skype or whatever messaging app at any point of time and you basically are expected to respond very quickly whereas if you're doing it on an hourly basis you can respond and you can bill them for that time and I do that all the time if I'm fine conversing with a client's team I'm billing for that time because it's time that could be doing something else right I can't be working on another project I'm focused on their project so that's just something else to keep in mind all in all I prefer the hourly contracts I like to have a nice fat hourly rate but if it's something I can do quite quickly I'll gravitate towards a fixed price contract the other thing to keep in mind is that how often the contracts end so in a fixed price but in a hourly contract typically its long though you could be one three months something like that right writing software it takes time and so it's gonna be a while before you get that feedback you can screw up a lot of stuff with the client in that time keep that in mind but the flip side of that is if you're doing fixed price contracts you can turn and burn those real quickly and get your ring up there real quick so for beginners I like to recommend you do lots of fixed price contracts or if you do hourly for a smaller job that's fine but just make sure you negotiate the full price in beforehand with the client but all in all I prefer a fixed price for shorter contracts and the hourly for the longer contracts what are your experiences let me know what you think any questions leave them below make sure to subscribe hit the bell icon so you get notified when I release new content thanks for listening see you all the nextwelcome back to the road to the machine learning freelancer tutorial series this is part 5 in parts where I talk a little bit about my nightmare scenario with a client who tried to jack me a $500 I tell you the warning signs how to make sure that doesn't happen to you so if you missed it make sure to go check it out today's video I'm going to talk to you about how you should get paid so on most of these platforms they have a couple different payment method options of course your settle up work in an upward you have basically two main options you can get paid on as a fixed price or as an hourly contract so let's talk about the fixed price budget first so I like these for smaller projects that I know I can get done and a relatively short amount of time and I can maximize my dollar per hour value right as a freelancer you're always looking to maximize your income while simultaneously optimizing for quality to the client right you don't want to produce shitty work because they're gonna leave you a bad review and the jig is up right then your that's game over right you got to produce good work but you want to be paid a premium for that because we are doing premium work right writing code is not something everybody can do good developers which is to say developers who are easy to work with are hard to come by and so if you're good developer you should definitely be charging a premium and fixed price contracts allow you to do that you have two different options you can get paid at the end of the contract or you can get paid by milestones now this is going to depend on the how the project is structured it you're just writing a quick little script to do one simple thing then you may want to get paid just all at once at the end of the contract now keep in mind you've already vetted the client to make sure they don't have bad reviews you've made sure they don't exhibit ending the red flags we talked about a part four and so you can have a decent amount of trust if the client isn't going to pull any shenanigans down the line it's okay to get paid at the end for the work you're doing if it's a longer and more involved project you want to set it up by milestones now this is very tricky typically what you'll find on most projects is that stuff takes two to three times longer than you expect and that is a rule other than in graduate school it is an ad so that rule every time I've said this project will take X hours it is always 2x so keep that in mind when you're budgeting the amounts for each milestones you need to take into account the fact that you're an encounter problems you're gonna have issues general snagger that is going to make it take longer and hence you should get compensated more because you are suffering more right so if you're doing a longer project definitely break it down by milestones think very very carefully about the deliverables so that way there are no surprises for you or the client and make sure you're getting fairly compensated now for longer more ongoing projects I like the IRA payment model and this is for a number of reasons so upward when a client is looking for freelancers or when they're posting a job they can actually put in the number of hours worked as a criteria for the job now you can still apply it just means that you don't meet their preference that's right you're free to apply but you they may overlook you because you don't meet that particular requirement and of course the way you you get hours is by taking hourly contracts and so one reason you love gnarly contracts is because it gives you a little bit more visibility in the search engine gives you better visibility when you're applying for jobs and of course the other reason is you get fairly compensated for your time now this is a double-edged sword here because if you're like me sometimes we'll find yourself thinking about a project trying to solve one little issue of it and of course you can't really build for that time so you have to be very careful and policing yourself to make sure you're not doing too much work outside of billable time the other downside is it installs you have to install an app on your PC or a laptop that monitors your usage it tells the client you know number of clicks per hour number of keystrokes general activities so they just leave it running they're going to know right there's no activity and that's the danger in thinking too much while you're while you're billing for time right is that you don't want to give the appearance even if you're say they're actively thinking how you want to approach a problem which is billable time because you are you know you could be using those cpu use brand cycles for something else but you're using it for the project it's billable time but it can give the appearance of impropriety so you have to be very careful with that and the more you charge the more scrutiny you're going to invite so just keep that in mind so if you have to stall the app it monitors your usage and it takes screenshots of what you're doing so be careful with what you have open if you have two monitors set it to record one monitor put your music your Pandora or whatever on the other monitor if you're having you know easy Skype chat or whatever put that on the other monitor to make sure they don't see it and of course don't don't get paid for chatting with people but you know it happens sometimes people will send you a message and of course with how are they contracts you can bill for the amount of time you talk to the client or their team now this is incredibly valuable because you want to guard your time right you are the expert you are the data scientist you need to be paid for your expertise and if you're on a fixed price contract you can't really do that right they're gonna be use the holy hell out of your time because they can write you're not getting paid by the hour or so they can just tell you you think you know summon you in slack or in or Skype or whatever messaging app at any point of time and you basically are expected to respond very quickly whereas if you're doing it on an hourly basis you can respond and you can bill them for that time and I do that all the time if I'm fine conversing with a client's team I'm billing for that time because it's time that could be doing something else right I can't be working on another project I'm focused on their project so that's just something else to keep in mind all in all I prefer the hourly contracts I like to have a nice fat hourly rate but if it's something I can do quite quickly I'll gravitate towards a fixed price contract the other thing to keep in mind is that how often the contracts end so in a fixed price but in a hourly contract typically its long though you could be one three months something like that right writing software it takes time and so it's gonna be a while before you get that feedback you can screw up a lot of stuff with the client in that time keep that in mind but the flip side of that is if you're doing fixed price contracts you can turn and burn those real quickly and get your ring up there real quick so for beginners I like to recommend you do lots of fixed price contracts or if you do hourly for a smaller job that's fine but just make sure you negotiate the full price in beforehand with the client but all in all I prefer a fixed price for shorter contracts and the hourly for the longer contracts what are your experiences let me know what you think any questions leave them below make sure to subscribe hit the bell icon so you get notified when I release new content thanks for listening see you all the next\n"