Our customers are the only investors we've ever had
We've had investors since day one, even though they've never asked for shares. They're our customers. And seeing it that way changes how you look at everyday work.
Leer más →How to price your work (and stop charging by the hour)
Charging by the hour feels fair, but it punishes people who work fast and well. Pricing your work by what you solve changes how clients see you and how you work.
"What's your hourly rate?"
It's the most common question when you work for yourself. And the most common answer is a number that's a little embarrassing to say out loud.
Let's turn it around.
The problem with charging by the hour
Hourly billing looks like the fairest option. You work, you get paid.
But there's a trap: the better you get, the less you earn.
If over the years you do in two hours what used to take ten, your experience ends up working against you.
It also turns every conversation with the client into a negotiation over minutes. And that isn't what the client wants to buy.
What the client really buys
The client doesn't want your hours. They want an outcome.
A website that brings them customers. A system that saves them work. A problem that stops existing.
When you charge for that outcome, you speak their language.
Nobody buys hours. People buy problems solved.
Ways to price your work
Per project
A fixed price for a specific outcome. It demands defining very clearly what's included and what isn't. Well defined, it's fair to both sides.
By subscription
A monthly fee for an ongoing service: maintenance, support, improvements. Predictable income for you, peace of mind for the client.
By value
A price that depends on what the outcome is worth to the client. The hardest to apply, and the fairest when the impact is big.
How to work out your price
- Work out how much you need to earn per year to live well and keep your company running.
- Work out how many hours you can really bill. Not all of them: there's sales, admin, learning.
- Divide. That's your hourly floor, even if you don't charge by the hour.
- Estimate how long a project will take and multiply by your floor. That's your minimum.
- Adjust for value. If the outcome is worth a lot to the client, your price can sit above that.
How to explain your price
A number on its own, with no context, always looks expensive.
Explain what's included, what problem it solves and what happens after delivery. When the client understands what they're buying, the price gets argued about much less.
What helps most
Saying the price calmly. Without over-justifying. Without lowering it before anyone asks.
If the client can't pay it, maybe they're not your client. And that's fine.
Pricing your work isn't a maths exercise. It's deciding what what you do is worth. And believing it.
P.S. On looking after clients with limits too: setting limits with a client is also looking after them.