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5 Things Consultants and Freelancers Need to Stop Doing

5 Things Consultants and Freelancers Need to Stop Doing

As a Public Relations consultant, I work with a lot of other consultants and freelancers. The majority of these interactions are fun, inspiring and seamless. However, over the last seven years I’ve run into some consultants and freelancers who do things a little differently.

Don’t get me wrong; I love people who think outside the box. However, when it comes to how some consultants and freelancers bill, I get a little discouraged when I see practices that take advantage of clients. In particular, there are five billing practices that quite frankly I find to be cheap shots. And for this reason, I never do this to my clients or other partners I work with.

Learn what they are!

  1. Making sales tax an added line-item

For many purchases, seeing sales tax as a line item on your bill is a pretty standard thing. When it comes to how consultants and freelancers bill, however, I find it a bit tacky to make sales tax an additional line item. Just include it in your hourly rate! Sure, you might feel like you’re making 6% more on every job, but I promise you’re turning off future business that would result in a lot more income long-term. Unless you’re selling someone and actual product or good, adding on sales tax feels like you’re grasping for more dollars.

  1. Billing for an initial meeting

As a business owner, you know you need to invest in business development. And yes, this means sitting through a ton of coffee meetings and networking mixers. I never charge a client for an initial meeting, unless it’s specifically scoped out as a service with deliverables – and we’re all clear on the cost and terms. I’ve seen some consultants and freelancers charge their hourly rate for an initial meeting. Especially if that first meetings turns into more work, it’s best to chalk that time up to business development and build trust with your client by not immediately slapping them with a bill. After all, they didn’t bill you for their time to meet with you!

  1. Billing for answering emails and phone calls

Maybe even worse than billing for an in-person meeting is billing for every phone call and email you answer for a client. I’ll admit, I’ve run into some long-winded and chat happy people who require more of my time than others, but unless email and phone responses are scoped out in a proposal, I don’t sneak that into a client’s bill. If you’re truly bothered by answering client messages, or you feel like they’re getting out of control, the better thing to do is address it head on with your client and set boundaries for your time.

  1. Padding time sheets

Over the last seven years, I’ve gotten a pretty good feel for the amount of time it takes to complete certain projects. It’s pretty essential to giving clients accurate proposal, remaining competitive and staying on budget. What this also means is it’s easy to identify when another consultant or freelancer is listing really high hours for a job you know couldn’t have taken that long to complete. I’ve gone to bat for my clients a time or two to challenge how it takes 2.5 hours to switch out one word on a graphic. The best way to earn more money is to do good work, and more opportunities will come. Padding a time sheet will only help momentarily, then clients will catch on and move to the next freelancer with more reasonable costs and billing practices.

  1. Going over budget without notice

My final pet peeve is when consultants or freelancers give you a proposal for the scope of work, but when it comes time to invoice the price has increased – and without notice. I fully understand how projects can expand beyond the initial scope of the proposal, but again the right way to handle this is communication. Inform the client as soon as they’ve exhausted your scoped hours and ask them how they wish to proceed. Better yet, give them a budget for the additional expense to finish the project the way they want it done. More often than not the client will give you the green light to proceed, but it makes a huge difference to get permission, and to be upfront about the larger invoice that will be coming their way.

Do you have another pet peeve to share when it comes to working with consultants and freelancers? Join in the conversation by leaving a comment below!

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Posted by on September 24, 2018 in Business & Success, Life

 

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Moving Beyond the Time Sheet: Making Efficiency Part of Your Pricing

mowing lawnSeveral months ago I wrote about how to be smart and fair when pricing your services. This is a critical area for any business and also one which can be the most challenging. It’s hard to put a price on passion. We risk either under valuing our services or becoming too-consumed with our work and pricing ourselves too high. Even after we have developed a consistent method for setting an hourly rate and accurately predicting the hours involved for any given project, we’re still faced with the double-edge sword of efficiency. To better illustrate my points, let me offer this analogy:

Say you want to pay someone to mow your grass. Your yard provides a well-defined scope and size for a project, yet several mowing companies provide you with very different pricing. Why? The difference between each company’s tools, experience and efficiency all play a role in the variables of their rate. One mowing company may only have access to a push mower and so they have to account for an employee taking 4-6 hours to complete the work. Another company may have equipment with all the bells and whistles requiring just 20 minutes to complete the project, but they must recoup the cost of the capital for this equipment. The second mowing company may spend far less time on your yard, but they can’t (and likely won’t) charge you just for 20 minutes of work. There’s the factor of efficiency which also has a price.

As business owners we should strive to become efficient with our work, but we shouldn’t then penalize ourselves for this skill. Although our ability to complete a project in less time means technically less billing hours, we need to keep in mind that there’s much more to pricing services than just our time. Take a look at the following three pillars of pricing that move beyond the time sheet and are worth considering when pricing your services. These may also help you understand why other companies price their services the way they do:

Scope of project

The size (or scope) of a project plays a large role in pricing, but not the only role. Businesses shouldn’t price a project based upon time alone. There should always be built-in motivation to be efficient with both time and resources and to not take advantage of a time sheet. I’ve moved as far from time sheets as I can because it penalizes my efficiency while leaving clients with an unknown variable of cost for my work. I prefer to quote a project in full based upon its scope and then I stick to this price, regardless of hours spent on the project, unless the scope should substantially change. Whether this works out to be my client’s benefit or my own, it ensures I work efficiently which most often results in completing projects well before deadline.

Cost of capital

A business invests a great deal of capital into their tools, resources and talent that allow them to provide optimum service. While a particular project may take an efficient business less time to complete because of these tools, there’s a cost to that investment that also must be taken into account when pricing services. Most commonly I see this in printing services. The cost of professional printing equipment is expensive! So while it may take mere minutes to print off a 5,000 piece mailer, when before it would take hours, the bigger and better copier required an initial investment from the company. I wouldn’t expect this printing company to charge for just 20 minutes of work when resources, much more than time, were the real expense.

Paying for professionalism

Finally, there is the cost of professionalism. If you want a service done right the first time, it’s worth paying a higher price to work with a business with a great reputation and track record for producing results. Sure, it can be tempting to go for the lowest price possible, but most of us have also experienced the repercussions of such temptation. In the long-term it’s often worth investing a little more to get exactly what you want the first time. Your time is also valuable and so the less time you spend fixing errors, or micro-managing projects the more time you can invest back into growing your business. When pricing your services, the point is very similar – don’t compete on price alone. Offer clients value, professionalism and high-quality service along with a price you feel is fair.

How do you currently price your services? Do you reward yourself for efficiency or penalize yourself? This is a critical question worth giving some thought – especially because it could save you hours of work and a lot of profit in the long-term. Weigh in on this topic by leaving your comments below!

 
 

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