One of the first questions potential clients ask me when I first meet them (right after “Is your head really that round?” and “Why are you smiling like that? Cut it out. It’s creepy.”) is “What’s your hourly rate?”
And they always get just a little bit stymied when I say “Err. I don’t have one.”
Because–except for in extreme cases–I don’t work hourly, and in my not-so-humble opinion, neither should you.
Because working hourly–asking clients to pay you a set amount of money based on the amount of time it takes you to complete a task:
-Turns what you do into a simple commodity.
-Is kind of demeaning.
-Encourages dishonesty and distrust.
-Is patently unfair both to you and to the people who are paying you.
-And just don’t make no sense.
Let’s take these two at a time.
Turns what you do into a simple commodity and Is Kind of Demeaning.
The vast bulk of Bizniks are talented and tough-minded professionals who provide a valuable service. These are bright, eager entrepreneurs trying to make their way in the world and to shake off the shame and horror of working for “dah man.”
So it always shocks me when business folks new and old demean themselves anddevalue what they do by working based on time. Why? Because if you say “I’m a designer who works for $X dollars per hour” you’re basically saying that while your effort(the time you spend on the project) is worth something, the end result of what you provide (a beautiful and powerful design that will serve your client for years) has no actual value of its own.
Basically you’re saying that your time is worth something, but your product is just another cheap and easily obtainable commodity.
Which is kind of ass backwards.
Now, personally I think this has a lot to do with the suffering mentality we Americans seem so addicted to. Work is HARD. Work is TOUGH. Work is NASTY and if I’m going to spend my TIME suffering like that, I’d better be PAID for it by gum!
And in a lot of ways, regular employees are indeed selling their suffering. The kid who slaves away at McDonalds isn’t providing anything particularly valuable that couldn’t be done by anyone with a 6th grade education level. A lot of employees (excluding executives and the like) are really just there to man the wheel.
And in that case, paying hourly makes perfect sense.
But as an entrepreneur, you aren’t manning the wheel, you’re providing a result.
Which we’ll get to in a second, but for now let’s move on.
Encourages Dishonesty and Is Patently Unfair to the people who are paying you.
Ok. Disclosure time. Early on in my career, I had clients who insisted on paying me an hourly rate and I was too green to talk them out of it. Now, unfortunately I’m cursed with the ability to work really, really fast. I’m also good at what I do, so while another copywriter might take 10 hours to do this one job, I got it done in . . . err. . . 2 and did it really, really well.
And looking at the rent coming due, and looking at the fact that the client expected the job to take closer to 10 hours (and that in a lot of ways the client would value the work less if he knew it was done more quickly) I, um, lied.
Yup. I marked myself up. Or, possibly I just multiplied my hourly rate.
But either way, working at an hourly rate made it not just easy but attractive for me to be dishonest in a business dealing. I don’t like lying. It makes my head hurt. It gives me lines.
But even if you’re completely honest in your dealings, track every hour to the second and submit detailed time sheets for every gig, you’re still being unfair to your clients. Why?
Because if you’re charging hourly, you’re basically telling your clients that they’ll pay more if you @$%# it up.
If I knock a job out of the park and do it perfect the first time I’ll get hourly rate X 5 hours.
But If I mess up, do a crappy job and have to go back and do a second, third or even fourth draft I’ll get hourly rate x 10 hours (or 20 or 30.)
And suddenly my client’s budget is blown right out of the water and I’m looking around for a new beach house.
Like I said, unfair.
Which brings me to my final point. If you’re a business professional who delivers potent results, working hourly Just don’t make no sense.
Let’s try one of my wildly strange and shaky metaphors.
Imagine you just got back from the playa and your car is just CAKED in dirt. You’re driving back into the city and you see two car washes right across from each other. One car wash has a big sign that says “Get Your Car Clean: $10.”
The other car wash has a sign that says “Spend two minutes in our car wash: $10.”
Which one are you likely to go to? Which one is offering you actual value.
Now personally, I’d go to the car wash that promises a result. If I went through that car wash (whether it would take 30 seconds or 5 minutes) and I came out the other side with a clean car, I’d pay my ten bucks with a smile (and if the car wasn’t clean, I’d ask them to scrub a little harder until it was.) With this model, I’ve basically got one possible set of results:
* I pay 10 dollars, my car is now clean. I’m happy.
But what if I went through the “two minutes of scrubbing” car wash? All of a sudden I’ve got three possible sets of results:
- I pay 10 dollars, my car is scrubbed for 2 minutes. My car is now clean. I’m happy.
- I pay 10 dollars, my car is scrubbed for 2 minutes. My car is not yet clean. If I want my car to be clean, I will have to pay at least another 10 dollars, maybe more. I’m not happy.
- I pay my 10 dollars. My car is scrubbed for 2 minutes. My car is clean, but I really feel like that car wash was slacking and they could have done the job in 1 minute. I feel ripped off.
Now, obviously there’s a ton of conversation that could be had about how to price yourself, particularly if you’re in a “face to face” service profession such as massage therapy. (The only time I charge hourly is when I’m doing face to face consulting. Of course my hourly rate in that case is really high because, well, I hate meetings.)
But if you take anything away from this hourly post, it should be this: Hourly work sucks. You don’t suck. You shouldn’t have to work hourly.