Why I bill hourly
Why you should <i>never</i> quote prices in hours: because it provides prospects with a frame of reference for price negotiation in which (a) you always sound very expensive, and (b) price movements that seem reasonable to the prospect can end up being very painful for you.<p>If you're going to end up haggling over your price, far better for you to be doing it over numbers like $15,250 which are tied to the <i>specific project</i> than over numbers like $125/hour which are affixed to you for the rest of your relationship with the client. You should never, ever be budging on your rate anyways. Give an inch on your rate and you will never get it back; companies hire whole departments to ensure that rate concessions, once taken, are never surrendered. Negotiate over <i>project scope</i>, not rate.<p>The question of whether you should go fixed price or time-and-materials is a reasonable one (and it's a negotiating point), but if you're going to bid time-and-materials, price in billable weeks, and estimate the number of weeks up front. Save the details about billable phone call minutes (and, <i>seriously?</i>) for your S.O.W.