How Billing by the Hour Is KILLING Your Business

When your income is tied to how many hours you can sell, you automatically limit your earning potential because there are only so many hours in the day. This is exactly what you’re doing by charging by the hour in your business.

What I bet you didn’t know is that the hourly billing model is a relatively new artifice. In fact, there was a time in the not too distant past when everyone charged for their services based on value, not by the time it took.

Administrative Consultants and virtual assistants are giving all this wonderful support and expertise to clients and helping them succeed, while they are just barely scraping by in their own businesses.

I know how little people are earning in this industry and how much they struggle to stay afloat because of it, and it’s evidenced every year since 2006 in our annual industry survey.

This is when we start to see them grasping onto straws or making a mass exodus into another business entirely. They think, “I just need to turn the work into a factory and hire all these subcontractors to do the work. Then I’ll make more money.”

But they soon find out that that is a much bigger, more complicated and involved business to run than the one they had, one they might not have bargained for or enjoy. It’s also not necessarily one that earns any better because the profit margins have decreased further while overhead, administrative time and expenses have doubled or tripled.

This new video explains all the many ways that billing by the hour is keeping you from earning well and serving clients better and what to do about it.

I am here to tell you that it is ABSOLUTELY possible to create a beautiful, well-earning (even into six figures) solo or boutique administrative support business that doesn’t have you killing yourself or feeling icky in any way.

If you’re ready to get out of the hourly billing trap so you can stop trading hours for dollars and start making the kind of money you can actually live on and sustain your business, be sure and check out my Value-Based Pricing & Packaging Toolkit. I can show you how to change all of it around in your business AND create a simpler, easier business to run on top of it!

6 Responses

  1. Kerry Keyes says:

    Hi Danielle,

    I just wanted to let you know this video really captured my attention. I’m in the start up phase of my new adventure and I most definitely will investigate your toolkit now…before I get caught in a “hourly rut”. Isn’t that why we all are in business for ourselves? ๐Ÿ˜‰

    Thank you for sharing!

  2. You are very welcome, Kerry! Thanks for letting me know that.

    This is a topic I am really, really passionate about because I see so many women struggling with earning enough, much less well in this industry–particularly single moms with kids who want to build a better life for their family and be able to provide well for them, and charging by the hour is keeping them from achieving those dreams. You’ll definitely be ahead of the long, painful learning curve by learning how to do this now.

    All my best and keep in touch!

    ~ Danielle

  3. Diana W. says:

    Danielle, I was introduced to you by a FB buddy, and I am so enjoying the practical tips that your offering. I am just beginning on my Administrative journey and have a couple of clients I’m working with now, to gain some experience. I come from a self-employed background with my own business, that charged by the hourly rate. And in my business they charge either by the job, or by the hour. I stuck to the hourly rate because when I did it by the job, I would have people taking advantage of that flat rate, adding too many responsibilities to my day, and I would walk away feeling exhausted and used. Then there are those in my service business who were charging by the hour, but were not putting in the work, and walking away from a typical 5 hr. job, in 2 hrs. Customers would often have such complaints about their previous worker, when they hired me. I don’t want to end up down the road in a hourly rate cycle, or in a flat rate cycle of giving entirely more than I bargained for. I can see already how either path can be a dead end. I am sure you have those bases covered, and I will look forward to reading what your solutions are for such matters. It sure would be nice to not watch the clock all the time or be over-worked! Thank You!

  4. Hi Diana ๐Ÿ™‚

    Great to have you here.

    You don’t mention whether you are referring to project work or support (they are two different things) or more details about the circumstances Either way, even without the rest of the story, I can tell that this is most likely a case of a) not using the right paramaters to set scope and b) not having proper standards, policies and procedures in place. These are things that also inherently set limits and scope to your working relationships with clents. It wasn’t the method, rather it was “operator error” lol. These are all things that I teach in this guide.

  5. Heather says:

    I’m the only one of my associate friends that does not charge by the hour. One, I never understood how it worked and see how complicated it is going up and down and rounding minutes. Two, it was too much admin work and I didn’t even know how to track everything.

    Now, some clients don’t want to work with me because of it and that is OK, but I never understood why me being effective and prompt at my work should make me less money. The faster I would go, the less I would make. I also couldn’t tell someone how long something would take because I don’t know. What if something goes wrong? Computer malfunctions? Too many variables.

    This spoke so powerfully to me and I’m sticking to my guns and staying with value. If a client does not want my services because I won’t go hourly, then obviously they are not my ideal client. ๐Ÿ™‚

  6. Hi Heather ๐Ÿ™‚

    As promised, I wanted to share the reasons that clients find value-based pricing so much more attractive and beneficial (and these are some of the talking points you would use when you consult with your potential clients):

    1. It’s easier for them to budget because they know exactly how much they will pay every month.

    2. There’s less headache because they don’t have to worry about every transaction exceeding their hours and budget or causing work to stop right in the middle of things.

    3. It’s easier to do business and work together. And “easy” is a HUGELY appealing sales factor.

    4. There’s more focus on what is important. You can both be more fully present in the work and accomplishing the client’s goals and objectives when they don’t have to worry about every second putting them over-budget and you aren’t focused on transactions and watching the clock.

    5. They get a relationship and service experience because the attention is on accomplishing objectives, not monitoring tasks and watching the clock.

    6. They don’t feel they’re being nickeled and dimed at every turn.

    7. There’s more flexibility. You have more ability to work with clients to create just the right support plan with value-based pricing than you do with selling hours and transactions.

    So the problem here isn’t that those clients who won’t work with you are necessarily unideal. It’s more a problem with how you’re pricing and presenting your plans to clients. And there’s a language to learn all its own when it comes to value-based pricing. It’s not quite as simple as deciding to not sell hours.

    To do it properly (that is, in a way that clients understand and better see the value and benefit to them), there aren’t any shortcuts. You have to learn the entire methodology not just that one tiny characteristic of it. Do you know what I mean? You are so close to making it work entirely smoothly for you. I would really encourage you to check out my Value-Based Pricing & Packaging guide so you can learn the whole methodology completely.

    Hope that helps!

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