Dear Client: Why I Won’t Bill You By The Hour

Dear future client,

A lot of freelancers are happy to charge you an hourly rate &  bill you based on the amount of time worked.

I’m not one of them.

I firmly believe that if I bill you by the hour, then our project has a much higher chance of failure.

Why is this the case?

Firstly, it immediately puts our incentives at odds. The way I would make more money is to take more time to get work done. I get rewarded, and you get punished for my inefficient work. You may think ” If you’re  a trustworthy developer, you won’t do that.” And you’d be right. However, that means that the right thing and the most profitable thing are different. That’s a fundamentally broken system. I’m in the client services business. I should make the most money when I best serve my clients, not the other way around.

Another way I can provide better service is to spend more energy on solving your business problems instead of dealing with red tape. I don’t want our phone conversations or meetings to have a taxi meter dangling overhead. I don’t want to fret about whether or not sending an emails “counts” as billable time. How about instead, I just do what needs to be done, no matter how long it takes. And as a bonus, you’ll always know the exact amount you are expected to pay. Your accountant will appreciate it.

Lastly, it reduces potential solutions. Let’s say I find an off-the-shelf solution for your problem. I could buy it for $100 or build something similar for $1,000 in billable time. All other factors equal, you’d rather have the cheaper, faster option, wouldn’t you? Good, because I’d like to give it to you. However, billing based on time means I can’t do so without taking money away from myself, my business, and my family.

A Proposed Alternative

We’ll agree to prices based on your needs & the value I can provide. In cases where the scope and value are more clearly defined, this can be a payment of one or more fixed fees. For projects that require more exploration, this can be recurring fixed fees on a weekly or monthly basis. This model provides a balance of flexibility for both of us.

Then we can be in alignment: the only thing that will matter about the project is achieving success.

That being said, there are always exceptions to the rule. If you feel there is a strong case for working hourly than I’ll consider it.

However, if you insist on hourly billing because you are focused on effort not results, I’ll be more than happy to refer you to someone more focused on delivering code instead of business results.


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