Questions

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)?

There is no perfect solution for this. My company has struggled with this for over 15 years, trying multiple methods of billing only to run into the same problems you have. Ultimately we have settled on a format where we outline what we plan to do and provide a cost based on the number of estimated hours that will take. We don't stress the hours but we make sure the client is aware that our services include "up to" however man hours. If we find that the scope changes or that things are taking more time than we anticipated we either cut back on the deliverables or inform the client so they can adjust their budget if possible.

Ultimately, it comes down to communicating expectations with the client. As long as you're doing that then it makes everything go more smoothly.


Answered 4 years ago

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