Charging Weekly: It Makes Everything Automatically Better
What's the difference between $100 an hour and $4,000 a week? Aren't they mathematically equivalent? No. Weekly billing strictly dominates hourly billing.
- Weekly billing means you never waste time itemizing minute by minute invoices ("37 minutes: call with Bob about the new login page").
- Weekly billing means you have uninterrupted schedulable consulting availability in weekly blocks, and non-billable overhead like prospecting or contract negotiations happens between the blocks (when you weren't billable anyhow) rather than during the workday (when, as an hourly freelancer, you are in principle supposed to be billing).
- Weekly billing makes it easy to align units of work to quantifiable business goals, where those goals dwarf the rate charged.
Weekly billing also does wonderful things for pricing negotiations... because you'll stop having them. When I write a proposal for an engagement, I typically write a list of things we can do and my estimate for how many will fit into 1, 2, or 3 weeks. If clients don't have 3 weeks in the budget, we can compromise on scope rather than compromising on my rate.
If you quote hourly rates rather than weekly rates, that encourages clients to see you as expensive and encourages them to take a whack at your hourly just to see if it sticks. Think of anything priced per hour. $100 an hour is more than that costs, right? So $100 per hour, even though it is not a market rate for e.g. intermediate Ruby on Rails programmers, suddenly sounds expensive. Your decision-maker at the client probably does not make $100 an hour, and they know that. So they might say "Well, the economy is not great right now, we really can't do more than $90." That isn't objectively true, the negotiator just wants to get a $10 win... and yet it costs you 10% of your income.
When you're charging weekly rates, the conversation goes something more like this: "So you don't have $12,000 in the budget for 3 weeks? OK. What is the budget? $10,000? Alright, what do you want us to cut?" You can then give the negotiator something to hang his cost-cutting hat on while still preserving your ability to charge your full rate in this engagement and all future engagements. (Word to the wise: no client, anywhere, likes giving up discounts after they've been given them. I have ridiculously successful client relationships where I, stupidly, cut them a discount years ago and I'm still paying for that decision.)
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Charging Weekly: It Makes Everything Automatically Better
What's the difference between $100 an hour and $4,000 a week? Aren't they mathematically equivalent? No. Weekly billing strictly dominates hourly billing.
- Weekly billing means you never waste time itemizing minute by minute invoices ("37 minutes: call with Bob about the new login page").
- Weekly billing means you have uninterrupted schedulable consulting availability in weekly blocks, and non-billable overhead like prospecting or contract negotiations happens between the blocks (when you weren't billable anyhow) rather than during the workday (when, as an hourly freelancer, you are in principle supposed to be billing).
- Weekly billing makes it easy to align units of work to quantifiable business goals, where those goals dwarf the rate charged.
Weekly billing also does wonderful things for pricing negotiations... because you'll stop having them. When I write a proposal for an engagement, I typically write a list of things we can do and my estimate for how many will fit into 1, 2, or 3 weeks. If clients don't have 3 weeks in the budget, we can compromise on scope rather than compromising on my rate.
If you quote hourly rates rather than weekly rates, that encourages clients to see you as expensive and encourages them to take a whack at your hourly just to see if it sticks. Think of anything priced per hour. $100 an hour is more than that costs, right? So $100 per hour, even though it is not a market rate for e.g. intermediate Ruby on Rails programmers, suddenly sounds expensive. Your decision-maker at the client probably does not make $100 an hour, and they know that. So they might say "Well, the economy is not great right now, we really can't do more than $90." That isn't objectively true, the negotiator just wants to get a $10 win... and yet it costs you 10% of your income.
When you're charging weekly rates, the conversation goes something more like this: "So you don't have $12,000 in the budget for 3 weeks? OK. What is the budget? $10,000? Alright, what do you want us to cut?" You can then give the negotiator something to hang his cost-cutting hat on while still preserving your ability to charge your full rate in this engagement and all future engagements. (Word to the wise: no client, anywhere, likes giving up discounts after they've been given them. I have ridiculously successful client relationships where I, stupidly, cut them a discount years ago and I'm still paying for that decision.)
"""
1. https://training.kalzumeus.com/newsletters/archive/consultin...