Ditching Hourly

Hello and welcome to Ditching Hourly, I'm Jonathan Stark. One of the classic objections to value pricing for project work is that the seller, you in this case, would get killed by scope creep if you provide a fixed price. Here's a recent example I came across online. A fellow wrote, I have to take issue with the idea of abolishing hourly rates. I've been doing this for 30 years and a flat rate equals the client will take advantage of the situation. When they have to pay by the hour, they have second thoughts about wasting time and money. I've done it both ways with a flat rate, you get screwed. The job I'm doing right now is a prime example of had I not charged hourly, I would have lost thousands of dollars with a firm bid. Okay, there are so many depressing assumptions baked into this poor guy's worldview. The fact that he's been locked in combative relationships with his clients for 30 years is tragic to me. There's a lot going on in what the guy said. We could have discussions about first defining objectives instead of deliverables, or second, selling brain work instead of hand work, or third, partnering with your clients, not defending yourself against them. But the bottom line is this. When he set his fixed prices, they were way too low. I don't know for sure, but I bet you if he had tacked on a zero to the end of his fixed price, he wouldn't have felt like he'd gotten screwed by his fixed price engagements. The argument to this is that the client might not have accepted a price that was 10 times higher, but that's a different problem. That's a positioning problem. It's a sales problem. It's a value problem. It's not a fixed price problem. There is no inherent problem with fixed prices, but there is an epidemic problem of people setting fixed prices way too low. And one great way to set fixed prices appropriately for project work is to use value pricing. It's not the only way, but it is a good one. That's it for this time. Hope you join me again for Ditching Hourly. Bye. 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.