Should you always charge by the hour?
This is part of our ongoing Q&A series.
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Q: Should you always charge by the hour, charge per job and then by the hour if need more time to complete the task, or just a flat rate per job? From Rainservices in Alpharetta, GA
A: Always is a very strong word that I rarely use because there’s always a case that disproves it. Ha, I just used it.
Most home/residential organizers do charge by the hour. The benefit is that it allows a residential client to start for a small price and thus, take a smaller financial risk.
It also allows some clients to budget their time and money.
But the main reason people charge by the hour is because when you throw out a big number to a residential client, they might freak out and wonder if it’s worth the value you bring. They tend to do better when you can show then your value over time. Give an estimate but parcel it out over a series of appointments.
The reason is that for a residential client, they often are not losing money so there is no bottom line. They’re often just frustrated and stressed out, but there is not an obvious link to loss of money unless they are over-shopping.
This is discussed in one of the last chapters of Alan Weiss’s book, Million Dollar Consulting, that teaches how and why pricing by the project, or value pricing is a better way to go for most businesses. I read the whole book, hoping to apply his methods to residential organizing… but then got to the chapter on residential which basically said, forget everything I just said.
When you can price by the project, the buyer knows the bottom line right from the outset and can budget for it and see the value it brings. Business owners need this so they know the bottom line for their operations.
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