What’s better: hourly payment or fixed rate of business software development
There is a very popular misconception that if you set a lower price on your work, even dumping, you should get the best job offers. Sometimes it works because of several percents of customers looking for the best prices, but they are extremely hard to collaborate. They usually like to request too many reports or demos and control every step of developers. So, you’ll lose both time and money, because, in most cases, they try to pay less than promised.
So, you must use another tactic and set price, bigger than you expected to get, for example, 55 dollars per hour if you expect to get 50. This 10% is not so important but you always can reduce the budget, if a client thinks that it's too much or implement some features, of course, for free. But don't forget to explain where every penny should be spent to prevent problems.
In fixed salary, you also have the ability to get the upfront payment. But there is one issue: people don't like to pay for the undone work. It means, that you have to explain your request and never hope for upfront payment. Let it be some kind of surprise.
Initially, it’s normally to separate the budget from 70%/30%. Make an estimate to ensure that your budget made correctly. In case of dividing entire work time into several periods to create checkpoints, it would be rational to distribute 70% of the budget to them. The remaining 30% is obtained after the entire project finishing when a customer got and checked it.
On hourly payment, a customer pays you every period, for example, every week. It's more comfortable if you have regular payments but sometimes causes several issues. This scheme makes big purchases almost impossible, also the performer can face a lack of work or even lost his job.
One of the most popular places to find a job is Upwork. This site provides huge possibilities and communicates lots of customers and performers a day but has some tools for the work approval. The system makes screenshots every ten minutes and detects every single movement, even when you just move a mouse.
It means, that performers can't cheat with customers and ask payments for the time they didn't work. So, if you don't want to lose a client, never try to do something like this.
Payments are sent every week after a customer has checked work done. Upwork team sends reports every Monday, so it's very comfortable to make weekly meetings and checkpoints.
There are the clock rates on Upwork, where it’s immediately seen your rating and how the customer can estimate your work.
In developing the process of any product you’ll have unexpected problems which were not inherent in the start estimates. There are two ways of its accounting – to pledge its cost into the budget from the beginning (and either the client pays too much for something unnecessary, or software developer lives in constant fear of exceeding the budget), or be honest with the client and allow him to make decisions to pay more only when it’s necessary.
The main thing is the daily results, constant communication and confidence. We believe that it allows the client to get better results for the profitable price, and for us – assurance that we’re a software development company which does the best software for business.