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  • 4 min read on alanhollis.com with 12 comments by jtbrown over 4 years ago
  • Great post. I like his basic formula for deciding how to charge. I'm curious as to whether he actually charges by day.

    For those of you who do, how tough was it for you to move to that from an hourly rate?

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    I'm just starting weekly billing, and the transition was actually not too difficult (I have a *great* client). I told them this meant a developer would be dedicated to their project and focused only on that, rather than dividing his time between multiple projects. They liked this and honestly didn't care too much about weekly billing - their only question was about what happens for vacation, holidays, etc. If you have an existing client that you're consistently billing 40ish hours a week, I'd suggest asking them about billing weekly instead and focusing on producing results every week.

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    That's a pretty good way of pitching it, I think. I also think it's possible our client would be receptive to this (they are also an *awesome* client).

    What's the answer to the vacations/holidays question, by the way?

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    If the dev doesn't work a day, we don't bill for it. So if there's a week where the dev doesn't work one day due to holiday/vacation, they get billed for 4/5 of a week, or 0.8 weeks at $x per week. I might even go as far as to (not) bill half days, so there might be a case where the dev is off half a day one week and we bill 0.9 weeks. I don't think I'd get any more precise than that, though.

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    That makes a lot of sense. How do you handle this accounting-wise? I've just gotten started doing formal accounting (QuickBooks), so I'm curious about that, as well.

    Thanks for the awesome advice, though!

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    Weird. I feel like this misses the whole point of weekly billing. The simple fact is that some weeks I generate most of my value in Monday-Tuesday-Wednesday and Thursday and Friday fallback to administrative stuff. Other weeks, I'm not quite as "on fire" and I need to work all the way through the end of Friday to reach my/the client's goals.

    In the first case, I'm actually penalized for completing work early: I only get to bill 8 x 3 days x $XXX, so 24 hours. With weekly billing, I get to deliver ahead of schedule and still charge what I'm worth.

    Weekly billing switches back to an emphasis on results: we will deliver this much value for $X,XXX. When you start fractioning it off like this, I feel like you're just back to hourly billing with different units of time.

    Curious what you guys think about this angle.

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    I do think it's important to focus on results, and I suppose you're right - the actual days shouldn't matter so much. I guess what I've come up with here is actually daily billing but I'm calling it weekly. Looks like I'll need to adjust. :)

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    Feels like a good approach. How do you communicate value, though? This makes it seem like it's fixed bid, and I've always wanted to avoid that since in longer-term or more complex contracts it's hard for me to predict how long something might take. Hourly has always let me feel like I have more wiggle room.

    How do you communicate all this to your clients?

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    I've experimented with daily billing vs hourly billing and I feel like for my lifestyle, hourly was a better fit. When I bill daily I don't feel like I have an 'off' button -- I'm so obsessed with delivering value that I feel like I've sold them the rights to my entire day.

    With hourly, at least if I stop feeling productive I can stop the clock and know they're not paying for value they're not getting. I might get paid a bit less, but I feel better about it.

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    Oh, and if you're talking to a new prospect, it's easy - when they ask what your rate is, just say "we charge weekly, and it's $x per week."

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    Also, clients don't feel as comfortable arguing these higher weekly numbers, whereas with hourly billing, they're perfectly content to try to cut $10/20/30 off the rate, because that's a number they directly understand.

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    I still always wonder what the psychology is about that, though. Why don't clients reverse engineer the rate to get to the hourly?

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