Hoping to scale your business? Professionals like Rick Schaden know a lot about expanding a small business to become more and more profitable. As a freelancer, contractor, or consultant, consider switching from your old ways of billing by the hour. This is a great first step to making more and, in turn, investing more in your business.
Billing by the hour is a strange way of approaching a project. Why? Professionals who are more seasoned and experienced will work more quickly than professionals who are just starting out. Why, then, should an experienced person get less for a project simply because it doesn’t take them a long time to complete? Shouldn’t you be paid more for your experience?
The answer is simple: yes. The longer you’ve been in your profession, the more valuable you are, and you should be paid as such.
There’s another reason why you should switch to project billing: the customer will appreciate it. When a customer pays for hourly services, there’s no guarantee that the contractor will work quickly. By dragging out the project, they can charge more. On the other hand, when a customer pays a flat rate for a project, there are no surprises in store when the bill comes through.
This payment structure benefits the contractor just as much as the customer. Let’s say you’re hired to write 50 blog posts for a website. If you charge a flat rate, you’re more inclined to finish the project as soon as possible, while still writing high quality blog posts. You won’t want to stretch out the time it takes to complete the project, because you won’t be earning more money if you do. The customer will have the project returned to them quickly and you’ll make more money per hour by working efficiently. Everybody wins!
If you were to bill hourly for that same job, and you still accomplished it quickly, you set up a bad precedent with the client. From then on, they’ll expect you to get work done quickly and not charge a lot. In the end, they’ll place a lower value on your work.
As always, there’s an exception to the rule. Sometimes, a customer will insist on paying you by the hour. Odds are, they don’t understand the benefit of paying for the project. In this case, you’ll have to decide if the project is worth your time and if you feel you’ll still be compensated appropriately.
Charging by the hour simply because that’s how you’ve always done it is a poor excuse for keeping with an antiquated process. Switch to project billing and get compensated for your hard work and experience.