Home – New Forums Starting your journey Regarding work for other than hourly rate

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  • #990082
    Alwayshope
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    Hi everyone. I am renting out an office space starting March and have work for 15 hours that paysme an hourly rate-but I am also looking at doing something on top of this that is going to give me more than an hourly rate so I can grow the business. Any ideas?

    #1175393
    Tony Manto
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    Hard to give you an answer without more information. What do you do, what do you want to do…

    #1175394
    RachelWrites
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    Definitely – like Tony said it’s hard to give you any advice without knowing what industry you’re in and what work you do.

    There’s two main ways to charge for most service-based work: hourly or project-based.

    If you don’t like hourly, then you need to work out what complete projects, packages or service-offerings you can create and charge a client for the total package. In working out the cost of the package you need to determine how much time you believe it will take and of course, examine the hourly rate you would be making. But this info doesn’t make it to the client. They just get the end result fee with a list of inclusions.

    Be very specific with your inclusions so the client knows exactly what they’re getting for the money they’re paying. If they need changes, amendments, extra work etc, know if advance what you will charge them on top of the project fee.

    Other wider ideas would include incorporating a product into your service offering and selling that product to grow your business. It may be an information product or a physical product – but it can add revenue and help you grow your business (either by showcasing your knowledge through information or becoming memorable by selling something unique within your industry).

    If you want to let us know more maybe we can be a bit more specific :)

    #1175395
    iaindooley
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    There are 2 ways to get off the hourly treadmill:

    1. Billing based on “value created”
    2. Productisation of services

    Billing based on value created (which Patrick McKenzie talks about a LOT) is almost impossible when working with small businesses. In order to demonstrate likely return on investment for your work, you need to have a baseline of data (lots of data) and be able to show that, given some improvement on some metric, your services will be worth $X, then you just have to convince them that, based on your track record, this is an improvement you will be likely to generate. Bingo, your hourly rate is now $5,000. But small businesses don’t have that data, you don’t have a track record, and you can’t get big businesses as clients. Boo hoo, back to the drawing board.

    The other way is to go for “productisation”. What this means is that you start with a very low risk and predictable service that you can do over and over again while you optimise it. For example I run http://www.decalmarketing.com/ where we do adwords management for ecommerce stores. We sell a standard “first month of adwords” program that provides some insight into the business and gives us an idea of how to proceed strategically. Even though when I first started out, I did all the work, now that I’ve done it a number of times, I outsource all the work (including writing proposals, following up on deals, closing deals, invoicing, setting up the client and fulfilling the service). Therefore, every time I make a sale, I make at least $300 (we sell the service for $600 and it costs less than $300 to deliver). Sometimes it costs much less than $300, very rarely it’ll cost me more than that, because I can hire stay at home mums for $20/hour to do the work for me.

    That is a productised service where my earnings are limited only by my ability to sell the service, not my ability to deliver the work (there are an abundance of people who can do the work for me and my hiring/training processes are all systemised so I don’t even have to do that bit).

    Once we get past that initial product, there are more complex offerings/upsells that I can propose to the client, some of which are more systemised than others, but as I go along I can take this process further up the chain: continually systemising each service I deliver at higher and higher margins.

    But start with something simple: find something people need done, do it, write down how to do it, train others, reap the rewards.

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