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I'm listening to Michael Dominik (Linux Action Show alumni) interview Jonathan Stark, the author of "Hourly Billing Is Nuts".
Sounds like you determine the annual value of what the customer wants, and then determine what you can do for 10%, 30%, and 50% of the value. You work backwards from the dollar amount. This is different than determining how many hours it will take to do what the customer wants, and then billing them by the hour. Also different than charging a fixed amount for what the customer wants. You basically tell the client what they will get for the Bronze, Silver, and Gold amounts. If a client wont pay 10% of the annual value, or the dollar amount is too low for you, then you pass on that client.
https://www.amazon.com/Jonathan-Stark/e/B001ILFMCQ?
There Is A Better Way To Price Your Services
The first step in increasing your profits is to shatter the illusion of hourly billing. I realize that “everyone” bills by the hour. I also realize that with enough discipline, it can be made to work reasonably well.
BUT...
As long as you bill yourself out by the hour, your clients will treat you as labor. Hired help. A pair of hands to be directed. You’re better than that. You’re the expert at what you do, your clients are not.
Stop letting clients tell you how to do your job. Take back control. Be the trusted partner that your clients long for. But you can’t do so without changing your thinking. This book will help you see the light.
You need to sell your head, not your hands. Your expertise, not your labor. Outcomes, not activities. Benefits, not deliverables.
Sounds like you determine the annual value of what the customer wants, and then determine what you can do for 10%, 30%, and 50% of the value. You work backwards from the dollar amount. This is different than determining how many hours it will take to do what the customer wants, and then billing them by the hour. Also different than charging a fixed amount for what the customer wants. You basically tell the client what they will get for the Bronze, Silver, and Gold amounts. If a client wont pay 10% of the annual value, or the dollar amount is too low for you, then you pass on that client.
Jonathan Stark
Mike sits down with Jonathan Stark to discuss value-based pricing and why "Hourly Billing is Nuts" and his book of the same name.
www.automator.show
Hourly Billing Is Nuts by Jonathan Stark
“Every freelancer who bills hourly should be FORCED to read this book.” —Matt Inglot
jonathanstark.com
Ready to get off the hourly hamster wheel? | Jonathan Stark
Jonathan Stark teaches solo consultants how to make more and work less without hiring
jonathanstark.com
https://www.amazon.com/Jonathan-Stark/e/B001ILFMCQ?
There Is A Better Way To Price Your Services
The first step in increasing your profits is to shatter the illusion of hourly billing. I realize that “everyone” bills by the hour. I also realize that with enough discipline, it can be made to work reasonably well.
BUT...
As long as you bill yourself out by the hour, your clients will treat you as labor. Hired help. A pair of hands to be directed. You’re better than that. You’re the expert at what you do, your clients are not.
Stop letting clients tell you how to do your job. Take back control. Be the trusted partner that your clients long for. But you can’t do so without changing your thinking. This book will help you see the light.
You need to sell your head, not your hands. Your expertise, not your labor. Outcomes, not activities. Benefits, not deliverables.
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