September 28, 2016

You’ve got to give yourself some runway...

James Jeffers kindly agreed to be interviewed for my forthcoming pricing podcast, and I can’t wait for the episode to go live.

We talked about his recent transition from hourly billing to value pricing and the success that it has brought him and his clients in a relatively short period of time.

At one point in the interview, James summed up his experience succinctly:

“I’ll never go back to hourly billing!”

He mentioned five key factors that I believe combined to make his transition a success:

1. Getting referrals from past clients
2. Starting with small projects
3. Saving a month of expense money
4. Willing to walk away from project
5. Trying to talk client out of hiring him

The one that I want to call out is:

3. Saving a month of expense money

If you are desperate for cash, your ability to make good business decisions is compromised.

• You’ll set your prices too low
• You’ll make concessions that are detrimental
• You’ll take on clients who you know are a bad fit

As I tell my students, you need to secure some “keep the lights on” money before beginning the transition away from hourly billing. This could take the form of cash in the bank, or an ongoing hourly engagement, or a spouse who can cover the bills for a little while. Whatever the source, you need to feel like you’ve got at least a couple months of safety net.

Venturing away from hourly is going to put you in uncertain territory that feels (and is) more risky than you’re used to. If you combine this uncertainty with financial desperation, you’ll almost certainly fail to achieve escape velocity.

Yours,

—J

P.S. The toughest part of breaking the time barrier is changing your mindset - which is exactly what Hourly Billing Is Nuts will help you do.

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