Why I bill hourly

Re:Why I bill hourly by mattwdelong on Sunday November 07, 2010 @06:36PM (#1880729)

tptacek hit it dead on. Don't bill hourly; bid on a project basis. Why? First of all, you can end up doing work for a client and you know how you can save them $2,000/month by fixing something they can't. It only takes you five hours to complete the project, so what, you bill them 5 * hourly rate? You just saved him $24,000 year. That`s worth much more to him than an hourly rate. Know what you want per hour, ALWAYS get that, but quote what you're worth to your client and nothing less.

Secondly, tptacek is right again. Once you bid $125/hour, you're stuck at $125/hr. Even if you save your client that $2,000 month for 5 hours work, they`ll expect to pay you $625 and nothing more.

Be warned, this post is spot on if you always want to earn the same amount of money but you will never grow a company with this billing method.

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Re:Why I bill hourly by davidw on Sunday November 07, 2010 @06:39PM (#1880734)

> Be warned, this post is spot on if you always want to earn the same amount of money but you will never grow a company with this billing method.

OTOH, if you want to do fixed bids, you better have a really good idea of exactly how much time it's going to take you. This means that you should concentrate on doing only things you've already done, or that are very similar to them. Otherwise you'll run into something you didn't even know you didn't know and blow your estimate and eat the losses yourself.

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Re:Why I bill hourly by alnayyir on Sunday November 07, 2010 @11:20PM (#1881368)

There's a trade-off to be made here and it can be compensated for by knowing really good people.

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Re:Why I bill hourly by Encosia on Sunday November 07, 2010 @07:10PM (#1880826)

I'm not necessarily against fixed bid work; I do a bit of both depending on the situation. However, fear of being stuck at a particular rate isn't a good reason to avoid hourly billing.

I've raised my rates at least a dozen times over the past decade, and not a single client has complained. It just requires clear communication and a reasonable ~month's warning.

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Re:Why I bill hourly by MortenK on Sunday November 07, 2010 @07:58PM (#1880934)

The billing method has next to nothing to do with growing a company. High-end consultancy companies, law firms, financial services etc, very typically charge by the hour.

Also, who says you are stuck at your initial rate? Whenever you want, you can increase it. Many clients will have no problems with this, if you are worth it. Some will, but that's typically the kind of clients you can afford to loose anyway.

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