How should I approach/charge for this particular freelance job?

Why not come up with an hourly rate or a single-pay with bonus option?

What you are planning is exactly what I would suggest—negotiate. Start high so you can afford to meet him “somewhere in the middle”. Base your rate on what the two of you agreed upon for the last project, with variables depending on time it actually took, possible rewrites, or as @gemiwing suggests, some kind of bonus or value-added option for such things as rewrites or edits.

Speaking of edit…

There should probably be a higher rate for more creative aspects, such as conceptualize, website and brochure, etc.
Drawing a parallel with my own art, it’s like the difference between asking you to compose melody, write lyrics, arrange, make a demo-quality recording, and produce a full blown concert. Each step requires a certain amount of creativity, and not every artist (writers included) is capable of performing each step. There should be a level, or plateau, of compensation for each creative step.

I’ve done part-time freelance writing for years and always had trouble with this issue – afraid I wouldn’t get the project because my price was too high, or that I’d cheat myself by asking for too little. Eventually, I got away from proposing an hourly rate because I never met a client who didn’t think my rate was too high,or who wouldn’t ask when the job was finished why the job so many hours?” The way I charge now is to propose a turnkey rate (which includes rewrites) on the hourly rate I keep private. Sometimes, I wind up making more than I figured, sometimes a little less… but I’m satisfied with this because I’d rather make a little less money on one job if I know the client will come back again and again. A tip: no client likes a surprise at the end of the job. Pick a price and stick to it.

@Austinlad So with your turnkey rate do you include a set number of rewrites and then charge extra for any beyond that?

set a fixed rate and provide an estimate/negotiate the hours involved. set milestones tied to the agreed upon hours and set aside time to review/reassess at the half way point and ¾ point to give the client a chance to change their mind or add additional hours at your fixed rate. above all give yourself leeway (if it will take 100 hours say 120, never, never, never tell them how much time you really think it will take unless failing to do so would cost you the bid).

@Austinlad I had something similar happen recently. I picked up an under-the-table job painting a banquet space for a local restaurant. I quoted him an hourly rate. I think I would have done better with a turnkey rate, because he was surprised, not at the total bill, but at the number of hours I billed. In the future I will quote based on a secret hourly rate plus expenses plus an additional 10% for contingencies.

In my techinical writing. I propose a fee based on the proposed work presented. This is with the understanding that any additions or major rewrites fall outside of this and will be billed separately. This tends to discourage last minute additions unless vital to the job. My Chinese customers, few so far, seem to like this arrangement. I’m basically taking stilted “schoolbook” English and translating into colloquial North American user-friendly English. It makes their product look more competitive vs, the “pidgin English” instructions often found.

One thing I would suggest is saying what you’ve said here to you friend. Talk about what happened in the last job. I like what you said about being a perfectionist. I am too and I’ll put more effort into a site than I should because I want to. We have to ‘own’ that and realize that we’ll go beyond the budget set but we do that for our satisfaction. Try and not blame the client for that. You know?

Also, I completely agree with the others about setting a budget (both for time and cost). It gives clients something they can wrap their arms around (number of pages, revisions, schedule, etc.) If they go beyond that, you can bill them hourly or set another budget for that part of the job. I find that keeps clients involved and aware of their changes. It also stops them from the ‘wow, you charge how much per hour?’ crap.