I used to work freelance either I charged on a per hour basis the usual contractor rate plus 20% for working from home use of my kit ect be care full to charge accurately and honestly. Othwise I chaged lump sums payable on delivery of parts of the contract ie final spec circuit diagrams board layouts demonstraeable sections of the software ect. No futher work was deilvered untill the previous invoice was payed. usually I had done some work before qouting to get a handle on the project so I could estimate the time for each block, then double it, this usually gave an overall profit. Finally it is very important to agree a specification for the work or else the client has the habit of adding odd bits for which it is very difficult to charge