Pricing Fuck Ups. Ep28. Charging hourly makes you profitable by protecting you from scope creep. [part 1] Lessons from the wrong side of pricing.

Charging hourly protects you from scope creep.

You give your hourly rate. Start working on the project. The client keeps changing their mind and adds more things to the project.

How to avoid scope creep: by having an hourly rate. It will tell them “Hey. The more we work, the more you pay.”

So they’ll back off.

The belief

A flat fee puts you at risk of unprofitability. It will give the client the freedom to do and undo whatever they want. “We have to protect ourselves from scope creep. Charge hourly.”

Bad news

1. You were never, really, trying to help your client get what they want (an outcome or transformation). You were trying to fill in work that would make sense to you — and the result was never a priority. If it worked, fine. If it didn’t, not your fault. 🤷‍♂️
2. You never unveiled the value your client was after. You only worked on the deliverable. On their self diagnosis.

Good news: There’s another way.

But first…

Approach

It’s centered around the nominal cost to your client. This is the rate (how much the input ‘Time’ costs) and we’ll see how many hours (quantity) it’ll take only at the end.

It’s about you. How long it takes you. How much your rate is. How inefficient you are to get to hand off the project (the more it takes you, the more money you make).

It’s about the deliverable.

It’s about doing what you’re told.

It’s about the scope, not the value. Scope → Cost → Markup → Estimate.
You think of the things to do, how much it should take [scope], how much to markup on your costs and only then, think about an estimated quote. Not a price.

To be continued…

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