Charging for Your Services

When I first started a business, I read a lot of books about how to do it right. One of the topics frequently covered was how to set an hourly rate for your services…something many people struggle with, including myself. In addition to looking at what the market demands, what people are willing to pay, what your skill set is, etc. part of the equation is what exactly do you want to make an hour?

When looking at what you want to make an hour, you have to take a look at how much time a client might actually take, depending on the type of business you do. So if you see a client for an hour but you then have 30 minutes of paperwork to do and average 15 minutes in follow up time; that one hour is actually one hour and 45 minutes of YOUR time and needs to be billed/factored as such. So if you want to make $50/hour and you have one hour and 45 minutes per client session, you’d be charging at least $87.50 for that session. Make sense?

What I found when doing my rates this way was that it was very difficult to estimate how long something would take. Some clients never needed to speak to me and rarely communicated otherwise. They sent me everything for the project, I did the project and it was done. Easy peasy. Other times, they want to be involved in every step of the process or they don’t really know what they want or they change their mind, etc. For a variety of reasons, these projects can take significantly more time than another might, largely due to what a client needs/wants in the process. If I didn’t estimate well enough, I ended up not being compensated very well for my time. If I over-estimated, I was over-compensated and, while that may all balance out in the end, I hated that I was charging some clients potentially more than I needed to.

After a lot of inner struggles with this, I finally went to a fully transparent system. Clients purchase a block of time, they are no longer purchasing a completed project. That time can be used in whatever way that client needs but, just like any other job, if I’m doing something with a project, it’s paid time. After all, when I worked a w2 job, I punched in and went to work. I was paid for my time from the minute I walked in the door until I left for the day. I even got paid for a couple of breaks in there. Why would we view being self-employed any differently? If I am responding to emails or meeting with a client (including travel time) or actually work