How do I structure pricing for a software development project with a new client?
I have an S-Corp on the side and do work on software development. My main job (a contracting project) is ending in a few months and I started reaching out to new clients. I found a client through a colleague I had worked in the past and had an initial call with them. Up until now, I've only done hourly work (odd jobs here and there and not really a steady stream of income from my side gigs). The client reached out to me asking me the pricing structure. Here's their question:
1. Single modular project pricing
2. Hourly pricing
3. Weekly/monthly retainer
It appears that they need a formal response (and most likely a contract between the two parties in the future). I am relatively new to this and am looking for input. My questions:
1. I've heard from others that fixed-price projects should be avoided at all cost. This happens due to scope creep and vague requirements. Should I tell them I only do hourly?
2. I have no idea what a retainer is. Can someone help me with weekly/monthly retainer model?
3. They've also asked for response time/hours of availability for each one of these models. I usually do my side gigs at nights/weekends. I might be able to do some work during the day but I'd rather not commit to it as high priority things may come up at my day contract. Is it a good idea to tell them that I work only on nights/weekends? Does that come across as "professional"?
4. I understand that there's a big range for software developers. Should I bid a low hourly rate to get my foot in the door (I usually work at $100/hour with my other side gigs).