How do you set your hourly rates?

Jonathan Stark, who I really like, says "if someone asks you your hourly rate, you should say I don't have one". And this is the example he gives.

Imagine you have a beautiful house. The front garden is a showcase on to the street and your neighbours all invest a lot of time and energy making their gardens look amazing. You don't want to let the side down, even though gardening's not really your thing.

So you call in some gardeners and ask them to give you quotes.

All three of them walk with you around the garden, taking a few notes.

The first one says "I charge £25 per hour".

The second one says "I charge £30 per hour; most months it will probably take two or three hours to tidy everything up, but if there's anything in particular you want doing, obviously that will add a bit extra to the cost".

The third one asks you a load of questions - what kind of things do you like, what do the neighbours like, why does it matter to you what the neighbours think, how often do you spend time out there? And finally says "OK - it looks pretty good now, but there's a few things that need sorting out. Once they're done, I can keep this looking amazing. I'll plant some amazing flowers at the very front, which will make your neighbours really jealous, we'll move these shrubs and add a few extra down the side to give you some privacy in the summer evenings and I'll also treat your garden table so it doesn't rot away during the winter. It's £400 up-front, then a fixed £99 each month - but you'll want a minimum of 12 months to get the real benefits."

That sounds pretty good, doesn't it? If you don't really care about gardening, just want a really nice place to sit in the summer and something to stop the neighbours complaining, the third one wins all the way. The only question now is is the additional peace of mind worth the extra money?

Take action: When are you getting rid of your hourly rate?

Rahoul Baruah

Rahoul Baruah

Rubyist since 1.8.6. Freelancer since 2007, dedicated to building incredible, low-cost, bespoke software for tiny businesses. Also CTO at Collabor8Online.
Leeds, England