5 Reasons To Charge By The Project Not By The Hour

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Many coaches, consultants, virtual assistants, and others charge by the hour. They feel you put in the time and then you get paid. The consultant knows how much to bill the client, and the client knows how long it took you to complete the job. But does the client ultimately care how long it took you to complete the tasks, or does he/she only care how much she is paying? Clients are really only interested in the final cost to them. They only want to know if your price falls within the budget for their project and for the end result.

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5 Reasons To Charge By The Project Not By The Hour

  1. 1. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. 5 Reasons to Charge by the Project, Not by the Hour by Kimberly Reddington | www.CereusWomen.com
  2. 2. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. Charging by the Hour • You put in the time – You know how much to bill the client • Then you get paid – The client knows how long you worked – Client pays you for your time
  3. 3. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. Drawbacks of Hourly Rates • Your time in each day is limited • You max out your income
  4. 4. Does your client care how long it took you to complete the tasks, or does he/she only care how much she is paying?
  5. 5. Clients are really only interested in the final cost to them.
  6. 6. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. Charging by the Project • One set price for the whole project – Price is determined by scope of work – If scope changes, price changes • Determine what the project is worth to you in time, expenses, etc • Determine what the project is worth to your client
  7. 7. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. Charging by the Project is Better 1. Your client knows exactly how much to expect the project to cost. 2. There will be no surprises when the client receives the bill. 3. If you work fast, you may be able to finish the project in less time. 4. Clients may be more willing to pay a higher price for a project than for an hour. 5. There are only so many hours in a day.
  8. 8. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. 1. Client knows what to expect • Determine what project is worth to you – Time – Expenses – Adjust for unexpected circumstances • Determine what project is worth to client – What is their budget for the project? – How important is the project? – How much would they pay others for it?
  9. 9. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. 1. Client knows what to expect • Client will often pay more for a project when it is placed in terms of need and quality vs. how much you will receive per hour. • Your rate becomes dependent on your skills and quality vs. what a going rate might be for your field.
  10. 10. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. 2. Eliminate surprises • Have you ever worked with a client and found that it is taking longer to complete the task than you thought? – Client receives bill – Bill is more than estimate – Client is not happy
  11. 11. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. 2. Eliminate surprises • Charging by the project: – Client knows price upfront – Client knows it fits in budget – Client doesn’t breath down your neck about hours you put in – Client is happy – You are happy
  12. 12. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. 3. Project moving along faster than expected • If the project is moving along faster than expected – You still receive the same amount of pay – Client may receive project quicker – You get the job done sooner – You still get paid top dollar
  13. 13. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. 4. Clients will pay more • Based on experience I find that clients are more willing to pay a higher price when the number of hours is not considered • Client likes that he knows upfront how much it will cost • Client knows what he can afford and doesn’t need to take into consideration that your estimate might go over
  14. 14. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. 5. Only so many hours in a day • Charge by the hour, income stays steady • If you raise your rates, you may lose clients • If you want more money, you must work more hours • Charge by the project, get paid for project even if you didn’t work as many hours • Hire others to do some of the work and client won’t complain about the hours they work
  15. 15. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. Experiment with charging by the project • Estimate how long it will take you then add some to the total to allow for unforeseen issues • Don’t offer to your clients how many hours you will be putting into the project • Present Project Price and state that it will be the price they will be expected to pay for the scope previously laid out • If scope of work changes, price should change
  16. 16. Copyright ©2009 Kimberly Reddington and CereusWomen.com. All rights reserved. For More Information Kimberly Reddington Moms in Business Thoughtleader www.CereusWomen.com twitter.com/kimreddington www.kimreddington.com Who am I? I am a Moms in Business Thoughtleader and the founder of Cereus Women. I have been an entrepreneur since 1995 and understand the struggles and challenges that a mother faces when trying to grow a business and raise a family. I built a 6-figure consulting business working part-time in a field where others were working full-time all while raising 3 children. How can I help you? Through CereusWomen.com, I take other moms step-by-step through my proven process of building a successful home based business. I teach the importance of developing the confidence to take your business to the next level, as well as the know-how to balance your business and your family.

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