It always amazes me to see how many businesses still charge by the hour – it is a business killer. How do you like it if someone comes to quote for a job and then tells you he/she is charging you by the hour. You will have all or at least some of the following thoughts:
- How many hours will it take, can I afford this?
- I don’t know this person, I don’t know how good he/she is at what they do?
- Great, I am taking all the risk here, he/she can take as long as they want and I’ll have to pay?
The truth is that charging by the hour is terribly customer unfriendly and is therefor very bad for your small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants.
By charging by the hour you are creating so many barriers to doing business that your chances of securing the order is very small, if you are competing with someone who offers fixed pricing you have virtually no chance of getting the order. So if you work in an industry that charges by the hour and you need more work you know what to do.
In my experience you can charge more, if you charge a fixed fee and get organized. I believe that more accountants and solicitors loose work because they charge by the hour, the client relationship sours and then break down altogether.
Get rid of your timesheet – fix prices and bill your clients upfront – your customers will love you. ST.