What is Flat Rate Pricing? [Answered]
A flat fee or flat rate refers to a pricing structure that charges a single fixed fee for a service, regardless of usage.
HubSpot contributor Erin Rodrigue has published an in-depth article on flat-rate pricing.
She says, “If you price things correctly, a flat rate will cover the direct and indirect costs with a healthy profit leftover. But calculating an optimal one requires a solid strategy — and a little guesswork. So if you want to determine a fixed rate that will work for you, follow these steps:
- Start by estimating the number of hours it will take to complete a project. If you’re unsure, use your work history as a guide —or research what your competitors charge for similar projects.
- Multiply the number of hours you’ll work on the project by your hourly rate. The resulting number is your total labor cost.
- If applicable, calculate the cost of materials for the project.
- Multiply the cost of materials by your markup percentage. The resulting number is your total materials cost.”