Sure, many clients balk and the idea of hourly rates. But, you'll find that very small clients with small budgets can't tolerate the perceived risks nor can huge public sector or elaborate RFP'd type of jobs some times. The reasons are simply that small clients are to frightened to lose control of their cash flow, and many gigantic jobs come from public sector and other such industries where they won't get the money unless it's a fixed-bid.
But the reality is that in general, an hourly rate project will be much cheaper than a fixed-bid project if handled by a competent, trusted vendor.
This is simply because in a fixed-bid project the client is paying extra for risk mitigation while giving themselves less flexibility to change their mind without change orders. So, the fixed bid projects typically go up in price a bit before the end.
Meanwhile, hourly rate projects can turn on a dime with no change orders. Clients can manage their budget by changing scope along the way, or eliminating pieces that are going to be more troublesome then it's worth.
Finally, fixed-bid projects result in poorer quality in most cases. As the project progresses, the vendor sees their profit margin go DOWN when problems occur. That means that when a problem occurs and the client really needs you to do a good job, you are getting burnt out and starting to worry about losing money.
Compare that to an hourly rate job where there's an unexpected hitch - the vendor makes more money that way.
So basically, you explain this to the client and simply offer them very good estimation of the hours required for the project, with some ranges based on various risks and factors. Then, quote them a fixed-bid rate (if they want it) but show them how dramatically it increases (usually 100%) and explain to them that if they don't change scope they are better off with hourly than spending a lot extra to avoid 'risk'.
This only works for clients that understand professional services and don't want to waste money or time.
A client like that would probably be tiny, and cash poor, so I'm not sure I would extend credit to them, no
Those kinds of clients are for starting out, and building your business. After a while you can climb up and service clients that are more stable and trustworthy.
And the cash thing goes both ways. If YOU have a stockpile of cash, you are able to extend credit to clients without worrying too much if they are late payers. If you can withstand some risk to your cashflow, suddenly you can take bigger clients who insist on Net 30 without losing any sleep.
Cash = king.