Ditching Hourly

Hello and welcome to Ditching Hourly. I'm Jonathan Stark. Today I've got an audio excerpt from an answer I provided on my YouTube channel. You can check it out at thejonathanstarkshow.com and it'll redirect you to YouTube if you're into watching videos. Otherwise, you can just listen to the audio here on the podcast. Enjoy. Hey, Jonathan here. I've got a question from Zomars. And the question is, how do you know where to draw the line? How can you estimate without promising too much? For example, when you're hired to decrease bounce rate. This is really an interesting question. It touches on a lot of things. The main thing I want to say is that at the end of the day, you decide where to draw the line. But what does that even mean? So when you're talking to a client and they want you to decrease the bounce rate on their website, you need to go through the WHY conversation with them. You need to diagnose their situation. You need to agree with them that hiring you is a good idea. And you have to have some kind of confidence that you can deliver some kind of result. It might be that the result is decreased bounce rate. Or you might say to the person, I don't know, your website is pretty awesome. I don't know if I can change anything. Your bounce rate is actually not that bad. I don't think there's anything I can do to change it. And if they're persistent and they still want to hire you, then you probably haven't gotten down to uncovering what the real thing is that they're trying to achieve from an engagement with you. So if they trust you as someone who does something that can decrease their bounce rate and you're sitting there saying, look, I don't think anything can be done. It's great. It's really well done. I don't think you can get much more out of it. Then they might say something like, well, okay, but I just want to explore every possibility. I want to be sure that I've done everything I possibly can. Well, okay. Now it's a question of like, okay, dear client, how would you be sure that you did everything you possibly can? What can I do to deliver on that desire? Because the real desire is hidden behind the one that's on the surface. Or maybe you can't find a hidden desire and there's nothing that you're confident that you can deliver and you just say, I can't take your money. I just don't think I can improve your condition in any way. So the word estimate, now to move on, so that's one thing. You decide what you're confident in delivering and you find something. If you're going to engage with a client, find something that you're confident that you can deliver. It doesn't have to be downstream. Maybe someday you'll have better sales. It's something that you can deliver when you're done or throughout the process of your engagement. You're actually delivering it along the way. So figure out what result it is that you're confident you can deliver. The other thing in your question is how can you estimate without promising too much? And what I think, I'm not positive, but this kind of sounds like a question related to scope creep, sort of a scope creep sort of question. Like, yeah, we'll decrease your bounce rate by 50% and here's a price for that. And the estimate, in a case like that, you have to kind of estimate how hard it's going to be for you to do that. Otherwise, you'll feel like you're losing money. So if you think it's going to take you 10 hours to improve their bounce rate by 50% and it actually takes you 100 and you only charge the fixed price and you're not going to get any more money, you're not going to get 10 times more money because it took you 10 times longer than you thought. The things going on there are, first of all, you need to get better at estimating. Second of all, you need to probably increase your prices. If you're worried about your cost estimate, your scope estimate being too low, your prices are probably not high enough for the thing that you're planning on selling. Maybe there's no need, maybe the client won't support the price you would need to charge, but you could sell something else to them that would be less costly to you, more affordable to them, and perhaps not move the needle as dramatically as they'd like, but it would be affordable to both of you, mutually profitable, and it would improve their condition a little bit. Like maybe if you're a doctor, they refuse to stop smoking, but you can at least give them something that will help them with their cough, something like that. So it's like maybe you can't do this huge thing or they can't afford this huge thing like going through the smoking cessation program that you would put them through, it would be very expensive, but you can do a little bit to help them with the cough that they have from it. And yes, you're not treating the underlying problem, but you're improving their condition. So if you're afraid that, you know, so if you're planning on doing some big amount of work and you can't set the price super high, then what you're dealing with is very narrow margins and very narrow margins are dangerous. And if you estimate wrong, you can feel like you're losing money or actually lose money. So, yeah, so I mean basically what I'm saying with this piece of the answer is that your estimate needs to be either really accurate if you're gonna have razor thin margins

You need to have a really big margin so that if your estimate was wrong, maybe you're off by, you probably won't be off by 10x, but if you're off by 2x, you'll still be fine. So, you know, that's a question of getting better at estimates or picking a smaller scope or finding more value and being able to set a higher price, all those sorts of things. So, that's the second thing. Now, the third thing I want to say about this is sometimes, it doesn't happen very often, but if you're newer to the space and you are overconfident in your abilities, or you take on a client that you accidentally make a huge assumption about, you can find yourself in a situation where you give a fixed price for a project, let's just say $5,000, and you're going to decrease their bounce rate, and you can see by looking at their website that they're not adhering to any best practices, it's terrible in many ways. Of course, people are bouncing off the site, they can't read it, there's not enough contrast in the text, it's not responsive, all these problems. So, you're like, oh yeah, you take one look at the site, and you're like, oh yeah, I can totally, you know, in no time flat, I can make a few changes to this site, and their bounce rate is going to improve dramatically. And it'll be $5,000. Okay, great, sounds great, here's $5,000. Then, okay, so then you go in there, and it turns out that there are no templates, and it's an entirely static website that's been hand-coded from scratch with complete spaghetti code, and there's PHP and styles and JavaScript all inlined, and it's just a giant mess. And just to add something to the footer means editing a thousand files. So, this has happened to me before, where I made an assumption that the client's website, for example, was templatized, or had version control, or wasn't spaghetti code, or didn't have inline CSS in tables with table-based layouts. And so then when I get in there, I'm like, whoa, I actually can't do this for this price, or I don't even want to do it, or I think it's going to require a complete rebuild. So, I'll go back and I'll say, look, I got in here, and I looked at stuff, and I was very surprised to learn that this code was in the state that it's in. I made some assumptions, that's my fault, so I'm going to refund your money. And you really haven't done that much work at this point, you've really done no work, you've just kind of cracked open their code base and immediately been horrified. So, you just give their money back. So, that's the third thing. So, how do you know where to draw the line? Pick a result that you're confident that you can deliver. Find out what that is with the client. Next part, how can you estimate without promising too much? You have to get better at estimating or set your prices high enough that you have wiggle room. And the last thing is, if it turns out that you need to refund their money, refund their money. It sounds terrifying, probably, but I've advised many people in bad situations like this to just give the money back. And in every single case, they are just overjoyed that they did that. Like, wow, I never would have thought of that. That's the best thing I ever did. That's completely solved the problem. So, it's always an option. Okay, so very interesting little question here that brought up a lot of, I think, cool topics. So, thanks for sending that in, dear watcher or dear listener. If you have a question for me, just hashtag AskJonathan on Twitter, YouTube, or LinkedIn, and we'll find it and add it to the queue. Bye. Would you like to learn how to get paid what you're worth? How about selling your expertise and not your labor? We work through all of this together in the Pricing Seminar. Pre-registration starts soon, and you can sign up to be among the first to know when early bird pricing is announced at ThePricingSeminar.com. That URL again is ThePricingSeminar.com. Hope to see you there. Hey, Jonathan again. Do you have questions about how to improve your business? Things like value pricing your work instead of billing for your time? Or positioning yourself as the go-to person in your space? Or maybe productizing your services so you never have to have another awkward sales call or spend hours writing another custom proposal? Book a one-on-one coaching call with me and get answers to these questions and others in the time it takes you to get ready for work in the morning. Best of all, you're covered by my 100% satisfaction guarantee. If at the end of the call you don't feel like it was worth it, just say the word and I'll refund your purchase in full. To book your one-on-one coaching call, go to JonathanStark.com slash call, C-A-L-L. That URL again is JonathanStark.com slash call. Hope to see you there.