Billing hourly is bad, but you don't have to give up time & materials billing altogether. Just charge a day rate, or a weekly rate.
What’s wrong with billable hours
11–20 of 137 posts
Re: What’s wrong with billable hours
#12I have to scroll pages and pages to discover the answer: take risk and sell fixed price because that’s what customers want and differentiate you from the rest of the freelancers. The whole article feels like asking GPT to add filler for the first 3 pages.
Standard SEO playbook - 1,000 words frontloaded with keyword-laded filler.
It's particularly banal when it comes to recipes. "What is a cheeseburger receipe? Why would you want to cook a cheeseburger? What's the best approach to planning the best cheeseburger recipe? What cheeseburger equipment is required for the best cheeseburger? Oh, and here's the best cheeseburger recipe you were searching for."
Re: What’s wrong with billable hours
#13It depends. I do plenty of billable hours augmenting software teams. I'm delivering user stories every week. There's simply too much communication overhead in preparing weekly estimates for the same client.
I don't share the perspective on hourly making someone a commodity. Fixed outcomes can also be commodities. Clients can and do shop around estimates for the best price. The race to the bottom exists whether you're billing by hour or by outcome. You avoid the race to the bottom by what you sell, not how you bill. Wordpress themes are mostly a race to the bottom, regardless of how you're billing.
Re: What’s wrong with billable hours
#14Well, I found this article insightful, even if I've no plans of going freelancer (though of course... "life, uh, finds a way", so who knows). I think my most immediate objection is one that is raised in the comments from TFA: customers don't know what they want. For a flat rate to apply, you have to work to an initial set of requirements set in stone, and we know these requirements are almost always wrong (except for…
As a freelancer I always told my customers how many hours I plan to work for them, including a rough overview of how much time we use at which phase of the project and what is expected of them.
And I do that before I agree to work for them.
Re: What’s wrong with billable hours
#15I charge by the hour and will never change. It forces the customer to focus on getting the requirements right instead of hand waving it like "oh yeah, that's just what I want" and then come back later "I didn't want that, what I meant was" repeat ad infinitum. You see they are paying for my time, not results. If they choose to waste it... doesn't matter to me, it's all billable just the same. I will do my best to steer them in the right direction to save time and money, but you'd be amazed how often they need to learn the lesson the hard way.
I also don't compete, I'm not on any "freelancing" websites, I don't apply or bid for work. My clients always come to me, I get an email, a phone call asking if I'm available. So this race to the bottom nonsense is utter crap. I'm a consultant NOT a freelancer.
I've been doing this since 2011, that's the last time I had an employer. This year I'm on track to bill out between $360k and $400k. If that's "amateur" so bet it. Considering I have no debt, my house is paid for, my luxury SUV I paid cash for, my actual monthly bills are around $2,500 a month. I really couldn't care less what someone who writes an article like this thinks of me. The writer is advocating for the client, they aren't giving me advice that helps me. I also have no interest in scaling, on bringing on employees. I'm making bank, I left CA in 2013, currently live in Wyoming with a 40 minute drive to Park City UT and a 60 minute drive to Salt Lake City.
To anyone reading this article and thinking they are offering you helpful advice, consider their motive. What are they trying to sell you? Are they trying to change the current consulting landscape to benefit themselves as a business owner?
Re: What’s wrong with billable hours
#16Well, I found this article insightful, even if I've no plans of going freelancer (though of course... "life, uh, finds a way", so who knows). I think my most immediate objection is one that is raised in the comments from TFA: customers don't know what they want. For a flat rate to apply, you have to work to an initial set of requirements set in stone, and we know these requirements are almost always wrong (except for…
Then you finally do all the research and they reject your quote.
The most valuable part of my job is typically the engineering or architecting not writing the code.
Depending on the client we do T&M or quotes but we never do free research. Well do a short proposal to quote you a big proposal
Re: What’s wrong with billable hours
#17Well, I found this article insightful, even if I've no plans of going freelancer (though of course... "life, uh, finds a way", so who knows). I think my most immediate objection is one that is raised in the comments from TFA: customers don't know what they want. For a flat rate to apply, you have to work to an initial set of requirements set in stone, and we know these requirements are almost always wrong (except for…
If someone's a pro, they'd charge a flat rate to tell the customers what they need, or for a given outcome. Like a flat rate to spec out an MVP. Or to get to $X in revenue.
Re: What’s wrong with billable hours
#18I charge by the hour and will never change. It forces the customer to focus on getting the requirements right instead of hand waving it like "oh yeah, that's just what I want" and then come back later "I didn't want that, what I meant was" repeat ad infinitum. You see they are paying for my time, not results. If they choose to waste it... doesn't matter to me, it's all billable just the same. I will do my best to ste…
What kind of work do you do?
Re: What’s wrong with billable hours
#19It depends. I do plenty of billable hours augmenting software teams. I'm delivering user stories every week. There's simply too much communication overhead in preparing weekly estimates for the same client. I don't share the perspective on hourly making someone a commodity. Fixed outcomes can also be commodities. Clients can and do shop around estimates for the best price. The race to the bottom exists whether you're…
A large organization might prefer billable hours because they already have thousands of employees on a recurring accounting schedule
Re: What’s wrong with billable hours
#20I hear what he is saying, but he stops half way where he says 'take responsibility for outcomes'. You see. In business this is translated into fixed price projects.
But in contrast to the name there is nothing fixed price about it. As a provider of such project deliveries, unless you truly are an 'amateur', you still are acounting cost plus if the project goes into overruns. The way you do this through 'change requests'.
You see, you can't nail down a contract taking into account every possible interpretation of details on a bespoke software project. So the customer will always need to clarify and adapt. This will be translated by your sales team into additional costs until a margin is met.
The only way out is using of the shelf product, and even then you will probably have an 'integration project'.