Most of us, when we start our service business, whether that's software, marketing, consulting, whatever - we think in terms of charging an hourly rate.
Maybe we went to one of those freelance calculator sites, put in how many hours we wanted to work per year, how much we wanted to earn and it came up with an hourly rate. I'll talk about this particular model, and why it's such a bad idea, later on.
But there's this assumption that for our type of work, we charge by the hour.
The client buys our expertise in chunks of time.
This is wrong.
It's bad for the client. And it's bad for us.
It's bad for the client because, ultimately, they don't know how much they're going to be paying. You're going to say "I'll get that done in 20 hours, but if it takes 30 or 40 then you're going to pay extra".
It's bad for you because as you get better, as you get more experienced, as you learn new techniques and use better tools, you get penalised for working faster. Then, to counter this, you raise your rates and suddenly, the client is having to choose between one person charging £40/hour and one person charging £200/hour and not having any idea if the second one is actually five times better than the first. And let's face it, in the absence of any other information, they're going to go with the first.
So, I will say this to you as kindly and gently as I can.
Do not fucking use hourly fucking billing.
We'll talk about alternatives next week.