Sent by Jonathan Stark on October 1st, 2017
As you probably know by now, I’m on a mission to rid the world of hourly billing.
But just for the record, I’m not necessarily against timesheets as long as they are not used for setting prices.
That said, the two things (i.e., billing by the hour and tracking time) are closely connected in people’s hearts and minds.
If you have moved to setting value-based prices for project work but still insist on tracking time (for yourself, your employees, or your contractors), ask yourself this:
Are you SURE you’re basing your prices on VALUE?
I do believe that there are some valid reasons to track time. But in my experience, you probably haven’t completed the mental leap to value pricing if you insist on continuing to tracking time.
Operating in this “half leap” state results in the following:
This creates a self-fulfilling prophesy.
You think you tried value pricing. You think it didn’t work. You retreat to trading time for money. You tell yourself (and others) that value pricing doesn’t work.
It’s true that value pricing doesn’t work for every type of client, but value pricing does work for virtually every type of expertise.
No matter what you’re good at, I’m certain that you can package and price your work based on value.
You’ll know you’re doing it right when your profits are so high that the notion of tracking your “time cost” is laughable.