As freelancers, many of us fall into the trap of selling our time instead of our expertise. Time-based billing is a long-standing practice, but it often undermines the true value of our work. In this guide, I’ll break down why it’s time to rethink this model and how you can transition to pricing based on expertise and results.
Why Selling Time Doesn’t Work
Think about this: you’re hired to solve a complex problem. Because of your experience, you solve it in a few hours. Under a time-based model, you’re only compensated for those few hours, even if your work saves the client days or even weeks of effort. This system rewards inefficiency—freelancers who take longer might earn more than those who can deliver quickly and effectively.
Here’s what’s wrong with this approach:
- Time is a poor measure of value: Clients care about outcomes, not how long you spend achieving them.
- Efficiency gets penalized: The faster you get things done, the less you earn.
- It creates friction: Clients may start scrutinizing how you spend your time rather than focusing on the results.
What You’re Really Selling: Expertise and Impact
Clients hire freelance software engineers and developers for their expertise, not just for their labor. Your value lies in the knowledge and experience you bring to the table—the ability to diagnose issues quickly, provide strategic insights, and deliver high-quality results. This is what clients are really paying for, and your pricing model should reflect that.
Here’s what you’re offering:
Experience: You’ve seen similar problems before and know how to tackle them.
Strategic Thinking: You can spot opportunities and risks that others might miss.
Efficiency: Years of expertise allow you to work faster and smarter.
Transitioning to Expertise-Based Pricing
Making the shift from hourly billing to expertise-based pricing involves rethinking how you structure your services. Here are a few models to consider:
Project-Based Pricing: Charge a flat fee for the entire scope of work, with clear deliverables and timelines.
Retainers: Offer ongoing access to your expertise through a monthly or quarterly fee.
Value-Based Pricing: Set prices based on the value or impact your work delivers to the client.
These models align your incentives with your clients’ goals. Instead of being measured by time, you’re measured by results.
Addressing Client Concerns
Some clients may be hesitant to move away from time-based billing. They might raise questions like:
"How do I know I’m getting enough for my money?"
"What if the project takes longer than expected?"
"We have budget constraints and need detailed cost breakdowns."
To overcome these concerns, transparency is key. Here’s how to build trust with clients:
Define clear deliverables and milestones: Let clients know exactly what they’ll get and when. A good contract that covers that is worth its weight in gold. Be very precise what's included and what is not.
Provide regular progress updates: Keep clients informed without needing to clock hours. You might use a tool like Clockify for your own internal auditing, but, if you put yourself on a regular schedule to update clients, in writing, and in a single location that's easy for you to update and for the client to access, you'll be way ahead of the game. Regular communication is key, and stick to a single channel.
Be upfront about scope and pricing: Ensure clients understand the full value of your work. Can you express it in terms of how much time it will save them, how much more profitable they can be? It's worth doing this homework so you have solid conversational points that realistically convey the value of your skills.
By focusing on outcomes rather than hours, you’ll foster stronger client relationships and deliver more impactful work.
Benefits for Freelancers
Transitioning to expertise-based pricing can transform your freelance business. Here’s what you stand to gain:
Higher Earnings: Your expertise commands a premium, especially when you deliver results quickly.
More Flexibility: Without the need to track hours, you can work on your own schedule.
Improved Client Relationships: Clients appreciate transparency and value-driven results.
Final Thoughts
Freelancers, it’s time to stop underselling yourselves. Your value isn’t in the hours you spend but in the expertise and impact you provide. By shifting to expertise-based pricing, you’ll position yourself as a trusted advisor and unlock new opportunities for growth.
Have you made the shift away from hourly billing? What’s worked (or not worked) for you? Share your experiences in the comments—let’s help each other build better, more sustainable freelance businesses.
Top comments (5)
I for one could never understand how duration based prices work. Outsiders spread word that nomadic lifestyle can cut cost, but equipment and online services cost in the technology industry don't really translate well to such interpretation of costing from businesses more prevalent from the times of older generations. Second, as a freelancer, switching between clients computer software development specifications from frontend coding to API implementation implies blurring the line separating work from self development, so how to agree what is paid and what is time investment on my own expense. This is especially significant as unlike monotonosity of long term employment, I've to be flexible to keep switching between variety for avoiding conflicting dates. Third, even for the employed, in the work hour there are snack breaks, office grapevine talk between meetings, politics, despite entire office timing being counted as working time. When considering time zone based surveillance and tracking based remote work, it bothers me how can I be in front of camera, when say UpWork app wants a photo of me working, if I 've to use the restroom for just 2 minutes. & unlike blue collar quantifiable work, or devices like TV running for hours, is it realistic to be generating code at some predefined pace for 8 hour shift with only meal break?
Thank you for sharing your insights! You’ve raised several important points that resonate with many freelancers in tech and creative fields.
First, you're absolutely right—duration-based pricing often feels out of sync with the realities of modern freelancing, especially in tech. The notion that a nomadic or freelance lifestyle reduces costs is often misunderstood. As you mentioned, equipment, subscriptions, software licenses, and cloud services add up quickly. Businesses stuck in outdated costing models may overlook these realities entirely.
Secondly, the challenge of separating paid work from self-development is something I think many of us face. When you're constantly switching between projects that require vastly different tech stacks—front-end today, API integrations tomorrow—you can’t compartmentalize neatly. The flexibility freelancing demands often means investing significant unpaid time just to stay current. This reinforces the need to price based on value, not hours. Your expertise is a cumulative asset that doesn’t reset with each client.
Lastly, you make an excellent point about work culture and productivity metrics. The idea of constant output over an 8-hour shift, especially in software development, is unrealistic. Creative and technical work ebbs and flows with problem-solving and concentration cycles. Remote work surveillance, including the photo requirements you mention on platforms like UpWork, does feel dehumanizing and counterproductive. No one should have to justify a two-minute restroom break.
This is exactly why shifting to expertise-based pricing is so crucial. Clients should focus on results, not how many keystrokes or hours were logged. You’re offering a service that solves a problem, not renting out your time like a machine. I’d love to hear more about your strategies for navigating these challenges in freelancing—how do you approach setting boundaries and balancing client expectations?
A bit of a clarification on the second part, it's not like I am learning. It's more like the orientation on joining a new job. Maybe I am well versed with the concepts from a previous project, but have been stuck with too much interim work that was different. And mostly it's assets, like codebase, -specific catching up. I mean, if I know DevOps, but IBM, Azure, Google, AWS have their own flavors. How quickly must one get up to speed? The trend keeps temporarily shifting from one vendor to another. Must the client expect me to bear my time cost of switching, just like someone unfamiliar with DevOps in the first place?
Thank you for your reply.
Thank you for the clarification—this is a really important distinction! You’re absolutely right; it’s not about learning from scratch but reorienting yourself to the specific tools, codebase, and processes each client uses. If you have a specialization, even better, since you can focus on the work you love and become known as an expert in that area.
That said, even with a strong foundation, there’s always an adjustment period when dealing with different vendors and their unique ecosystems—especially with how fast the tech landscape shifts between platforms like AWS, Azure, and Google Cloud.
The expectation that freelancers should absorb the time cost of switching between these environments is definitely problematic. Clients often overlook how mentally taxing and time-consuming context switching can be. Expertise should include a reasonable onboarding period for project-specific nuances, but it's crucial to factor that into your pricing proposals upfront.
It’s not fair to expect instant mastery of every vendor's tools without some flexibility for acclimation. Ultimately, clear communication about expectations and scope is key. If clients understand the value of your experience and the context you bring, they’re more likely to allow time for ramp-up.
Thanks again for bringing this up—it’s a great point! How do you typically handle conversations with clients who expect you to hit the ground running?
I've managed by avoiding selling time. When negotiating fixed price projects, I've quoted for comfortable completion. But then potential clients insist on lowering prices, or tighter deadlines. I try to clarify that the I'd rather attempt early completion on comfortable deadline, than have a tight deadline- as if I am already oriented as to why, for what seems to be simple requirement, does the client need an external consultant? But since that's not paid hourly, some clients conduct does expose their anxiety regarding progress. Unlike design work where syncing with client on every iteration keeps designs aligned with what sells, during development, specially when resolving tricky and diffcult matters, making proper replies for an anxious client also becomes work. Handling conversations with clients who expect one to hit the ground running does become a sort of test of social skills.