Question
I have an increasing number of clients for my business consultancy (focused on nonprofit fundraising). As much as I was hoping to develop some economies of scale by securing several clients with the same needs, they all seem to be very different ... and require varying degrees of hours, energy, investment, etc
I am struggling with how to best structure my billing in a way that is most appealing to prospects and also the most profitable (and easiest to manage) for me. I have a somewhat visceral reaction to the idea of tracking hours and billing based on time ... my natural inclination is to bill by the project. But this has bitten me in the backside a few times due to scope creep (and my natural tendency to take on too much, as if I were an interim staff member).
I recently met a consultant who bills by the week; she focuses full-time on one client's project for a week at a time and bills them accordingly. This sounded appealing, but is untenable for me since I have multiple conflicts (i.e. I teach at a local high school three days per week and also have some standing meetings for other clients, so I can't dedicate a full-time schedule to any client). But I've been wondering if I could bill by the week and just tell the client it's a batch of about 4-5 hours per day?
What have you seen to be a good model?Bidding based on projects (my current approach)? Daily or weekly rates?
Or should I just grow up and bill by the hour -- and if so, how do you keep the client from feeling afraid of the running clock (or feeling nickel-and-dimed for every time they email or call you)?
Answer
I prefer a hybrid method as many on this thread have mentioned. I do an internal audit of what each service should be billed at individually, then take that rate times the hours needed to do the job. I add on the amount of time needed for "consulting", training, and followup (via email, phone, etc.) and put together a monthly rate that covers all that I would do PLUS extra for emergencies that may arise. I bill this monthly rate at a minimum project price of 3-6 months, and if there is a lot of upfront labor (setting up systems, learning homegrown software, etc) I charge a set up fee. Being confident in your processes and work allows you to do all this and not feel like you're overcharging. In almost every instance, I've come in under the budget number clients have in mind, and -- if they don't use all the services needed in a month -- the extra earnings helps cover time I spend acquiring new clients. Hope this helps!
