I know, I know. No one likes hourly billing.
I don't either. It's time consuming to bill and keep track of, you end up giving hours away because you don't want to look like it took you so long to do something (even though it always takes longer than you think), and clients can sometimes question your hours.
Clients also like to know, up front, exactly what they are going to pay. They don't like being surprised by a big bill at the end of the month for hours you are invoicing.
However, there are times when hourly billing has saved me from losing money. And I'm going to share a bit of that today.
one Case Where Hourly Billing Saved My Butt (project:-)
I had one situation where another designer friend brought me in to a project she had started with a contractor. The job was more or less at a stand still and she was about to leave to go overseas for a few months and couldn't carry on.
The homeowner was having trouble making decisions and really needed some direction to get things going. I was feeling confident in my skills and client guidance at the time and decided to take it on.
What I didn't realize, is that this client had a keen sense of what she wanted and it wasn't the style of the house. She was going much more contemporary than the architectural style and things were not jiving aesthetically.
Not only that, she was a very collaborative design client, wanting to have a hand in each and every small decision and ultimately, taking some advice, but not all.
It was a very, very long design job to say the least. Every detail and material was analyzed and researched, with many, many redesigns and revisions to the spaces we were working on.
I Started With Hourly Billing Because I Did Not Fully Understand The Client Or Project
And.....that's the BEST reason to do hourly billing. Sometimes, like in this situation, you find yourself where you are uncertain about what is to come or how things will unfold.
I had started in with hourly billing with this job, because I really thought I'd just go in and do some design direction and we'd be done. I knew this homeowner had a real idea of her style and probably could get by with just some consulting.
I did not meet the client before deciding to take it on, because it came by way of my friend. You know, sometimes you get involved in things without really having a good understanding of what you are in for and in this case, that's why I was so glad I went hourly.
A few months in (yes, a few months), she asked if we could go to a flat fee because no one really just gets unending billing these days. Everyone usually knows what something is going to cost before they buy it. Right?
I started shaking my head side to side, as she was talking.
No way.
No way was I going to give on this. This job was eating my lunch and if I was going to continue with this client, it HAD to be hourly.
I didn't make much money on this job, but at least I didn't lose money. And I would have, if I hadn't billed hourly.
It wasn't my fault she wanted lots of options. It was not because I didn't present her with good design that really spoke to the design direction of their wants and needs.
Flat Fee Projects Can turn You Into A Policeman
However, I knew that if I had gone with a flat fee, I would have to police the heck out of that project. I'd have to protect and reinforce the scope constantly.
Not only that, but I anticipated that arguments would be made that perhaps it was my fault that decisions were slow and progress wasn't being made, thereby possibly stalling payment of fees or even negating additional services that I would undoubtedly need for continual revisions.
I did NOT want to fight that battle. Looking back, I know if I had been talked into a flat fee here, I would have had to separate from that client. I would have been losing money for sure.
It was important to me then, at that time in my business, to complete the job. It was important to me to make this client happy. It was important to me to use this as a learning experience for myself on billing and project management.
There are times in any design business when working in a less-than-desirable situation is necessary. We can't always have all the fabulous, easy, profitable projects every single time!
Filtering Clients For A Good Fit
Now, I heavily filter my clients because I'm in a different place in time with my business. My overhead is less, I don't need so much coming in to keep things running.
(And one day I'm going to go into detail about what a blessing that has been....going leaner with my overhead.)
I have plenty of potential clients contacting me that have already started filtering themselves by reading through my blog, learning how I work and what my minimums are, etc.
I also need to heavily filter because I know I'm a terrible policeman. :-)
I don't like taking clients to task, reminding them when they are outside of the scope, or having to bill additionally for extra items they might require in the course of the project.
I don't like doing that AT ALL.
Slab shopping is billed on an hourly basis for clients
So, it is very important to me to acquire clients that won't have a tendency to do that. It's important to me to have easy clients.
I rarely do hourly billing now, unless it is part of the back end of the project, like site visits, or in a portion of the project that can be unpredictable, like slab shopping.
Hourly billing acts as its own policeman in that case, you know.
With a very filtered client, I can stay profitable with flat fees. However, we all know that sometimes people are unpredictable, sometimes projects can grow, sometimes things can come up in the course of a job.
Having the ability to slip hourly billing into that situation, is totally necessary.
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Oh, and if you will pin that pretty pin of the stressed interior designer up there to Pinterest, I'd much appreciate it! :-)