Captain’s log, stardate 20170209
[AUDIO] How Much Should I Charge Clients?
Sent by Jonathan Stark on February 9th, 2017
The handsome and talented Christopher Schmitt interviewed me recently for the Non Breaking Space Show to talk about how much to charge clients (and related topics).
Here’s the link:
The show is almost an hour long, so Chris has provided links to particular points in the recording if you’d like to jump around:
- 4:01 Mobile strategy and credit unions
- 7:02 Credit unions need to attract a younger market
- 8:02 Host’s first job was in IT department of a credit union
- 8:30 Talk about “Hourly Billing is Nuts” book
- 9:40 Any project is going to have at least 3 parties involved.
- 10:50 The longer it takes the more it costs, hard to guarantee customer satisfaction with hourly billing
- 11:20 It’s almost impossible to guarantee customer satisfaction with hourly billing
- 12:50 Problems of hourly billing, as a programmer it’s hard to indicate your value by number of lines of code.
- 15:01 What made Jonathan think that hourly billing wasn’t the best way to bill
- 7:18 This is like a cancer inside our business.
- 17:40 Even streamlining hourly there is still bureaucracy left over because you are measuring the wrong thing
- 18:15 You can’t make more than $140,000 a year
- 19:20 It can work if you’re nailing your estimates every time
- 20:20 If you’re not ready to fire somebody, you’re not ready to hire anybody
- 21:05 How do you grade tests? How long you take or how many answers you get right?
- 23:05 How Jonathan started using value pricing; it was always about hours, then he tried out value pricing, income doubled
- 25:15 Value pricing is using a fixed bid instead of hourly price
- 28:03 Plug in that can be used for a project instead of building from scratch
- 31:55 How to dip your toes into the idea of stopping trading time for money
- 32:20 Create code libraries, invest in efficiency
- 38:00 Jonathan only does scope projects not the actual coding. But he will guide the coders.
- 39:40 3 categories of why - Why do this at all? Why now? Why me?
- 42:30 Use the clients words in your proposal.
- 43:00 Set price 1/10th of the business value
- 44:01 Give client a reason why you are more valuable than someone else, not just price
- 44:50 Jonathan has been using value pricing for 10 years
- 45:20 Book came out in July 2016
- 46:01 Side projects that Jonathan does; a product ladder
- 48:50 You can hire me to do the project or you can buy a video I made that teaches you to complete the project
- 49:50 You now have a pipeline for leads by having a book
- 51:01 Since you sold products before, you can inform them of your new projects later
- 52:50 Words of advice by Jonathan Stark; don’t jump in all at once and test this strategy first; take it slowly
- 54:30 How to purchase “Hourly Billing is Nuts”
- 55:50 How to contact Jonathan