Subscription Options

November 26, 2008

Time based billing = Poverty + No time for you!

You can build a consultancy based purely on selling your hours. Many have done this and it is the default way that many consultants finally step out on their own.

But if you do so then you face some pretty significant issues.

1. There is a hard limit on how much you can earn. You can (read should!) only sell your time once. So once its sold its sold.

2. You will have no time left for business development, marketing, developing IP, or (most importantly) you and your family!! (Why? You sold it remember?)

3. You end up in all sorts of silly arguments related to how quickly you can do the work, why does it take so long, can't it be done quicker and so on. really annoying stuff really.

4. It takes the focus off the value that you are delivering and places it clearly on the work you are doing.  And in my opinion this is the quickest way to start to lose the possibility of ongoing engagements. The moment people stop thinking about the value you deliver and start thinking about you punching a time clock you turn into a commodity instead of specialized expertise.

5. If you want to dramatically increase your billing rates, then you need to hire more people and sell them. Complaints about travel, distrust, client dissatisfaction and all the problems associated with hiring people ensues. ("Sorry I'm late, my cat died." "There's no toilet paper".. bah!)

So time based billing is foolish and is the real hard way to do this. "Great thanks, so whats the easy way?" I'm glad you asked...

The easy way is through leveraging your time. Fees for month, charging by output or by value and not by time portion, using products and IP to gain greater yields from fees or through setting up some form of community that people will pay a fee to belong to.

Leverage your time by getting clients and prospects to understand clearly that it is not about the work you do, it is about the value you provide. And access to that value is your chief asset that you are selling...not the activities that you do.

Anybody can do stuff, only a few of us can deliver real value. And why are they interested in hiring you anyway?
  • Not to write a strategy document but to alter the direction fo the company.
  • Not to implement software but to increase efficiency
  • Not to train people but to tap into revenue increasing possibilities.

Isn't it about time you started to think like they do?