I did not read this article and am only commenting on freelancing in general.
It requires a good understanding, and importantly, articulation of the problem; but flatrate for projects is the way to go. You can charge more and make the client happier. So many software projects fail; that many clients are happy to pay 50-200%+ premiums for the insurance that if you fail to deliver they won't need to pay.
It is hard/impossible to do this when you first start out; but generally speaking if you realize you are selling "peace of mind" rather than whatever it is you are doing; you will make a lot more money and have happier clients.
When you charge a flat rate you are assuming the risk of a project. For this, you need to charge a risk premium.
My last fixed price contract (what was I thinking?) was estimated to take 120 hours and instead it took 400. I didn't do too bad because I priced that risk into my "rate".
If you would normally charge $100 hr, you should charge an effective rate of $175 or $200 hour for a fixed price project. Risk/insurance/peace of mind is something you need to charge for. Don't give it away.
Absolutely! You charge a super fat risk premium. My whole point is that clients will pay significant insurance (easily 100% premium) on a flat rate project.
I don't talk about hours with my clients when doing flatrate work. I am able to be like "okay.. this should take me 10 hours.. so really it will take me 40 hours, this is eaily worth 3k to them.. if i make anywhere from 75-300/hr I am pretty happy" Then I simply quote 3k and tell them they owe nothing if I don't complete the project to specification. I am very tight on specification and only would do this on projects I fully understand.
Even when I have been explicit about risk premiums being 150% of the estimate; clients nearly always choose the flat rate over the hourly with estimate. If I truly believe my estimates; this is an obvious win for me.
This is also why I said you can't do it right away; estimates are notoriously hard to get right, you really have to be a veteran to make more money doing flat rate than hourly; but I stand by my conviction that if you are decent at estimating (within .2 - 3x of the estimated hours); clients are generally happy to pay you the risk premium at a rate that is much higher than the actual risk.
It requires a good understanding, and importantly, articulation of the problem; but flatrate for projects is the way to go. You can charge more and make the client happier. So many software projects fail; that many clients are happy to pay 50-200%+ premiums for the insurance that if you fail to deliver they won't need to pay.
It is hard/impossible to do this when you first start out; but generally speaking if you realize you are selling "peace of mind" rather than whatever it is you are doing; you will make a lot more money and have happier clients.