Just FYI: Retainers and “packages” are the same thing.
If you sell hours, a retainer is a package of hours.
That said, I’m not an advocate of selling hours because it limits your income potential. (Video: Why Selling Hours Is Killing Your Business)
I am a proponent of a methodology called Value-Based Billing, which I’ve adapted for those in the administrative support business.
In the case of this billing method, a retainer is a package of administrative support with clearly defined parameters that you determine based on your consultation with a new retainer client.
What’s more useful for you to understand instead is the difference between project work and ongoing support because those in fact are two different animals.
Retainers are used for ongoing support relationships with clients paying an upfront fee every month, whereas a project is a one-time “event” that ends upon completion of the project (designing a website is an example of a project).
There are all kinds of methods people use to bill for project work. Some people think they are only allowed to bill at the end of a project.
First of all, being “allowed” has nothing to do with it. YOU make the rules in your business.
Also, it’s not true that you can only bill after the fact. You can decide to charge clients for the entire fee upfront if you are so inclined. That is a perfectly legitimate and standard business practice.
Or, you could choose to charge an upfront deposit to be applied to the final invoice.
Or, depending on the size and kind of the project, you could break it up into stages/phases and charge the client either upfront or upon completion of each stage/phase and only continue to the next stage once the prior stage’s invoice is paid in full.
The reason it’s important to understand the distinctions between the two is because an ongoing support relationship creates actual, consistent cashflow whereas project work and the money you make from it is more sporadic and incidental.
Understanding these distinctions, you can more intentionally decide which kind of business you want to be in and plan and prepare accordingly.
For example, let’s say you’ve gone the project-based business route (the correct term for these is “secretarial service”) and find it difficult and exhausting to market and keep enough of a constant flow of work and clients to earn a living.
Recognizing that you can earn a more consistent monthly income in advance each month (and potentially more money when you learn how to do it right), you might decide you’d like to be in the admin support business instead and can focus your attention on building that kind of practice.
The nice thing about an admin support business is that you can make an extremely comfortable income with just a handful of clients.
It’s also a much easier business to run because there isn’t that constant churn of clients and projects and administration over and over that you have in a project-based business.
Plus, when you have a base of dependable retainer income, any project work that comes your way becomes gravy.
When you aren’t dependent on project work to survive (and the feast and famine cycle that comes with it), you have more freedom to be selective about the projects you take on that interest you.
You might even be doing as well as you please financially with your retainer clients that you find you have no interest or need to take on extra project work (other than that which you might do occasionally above and beyond your monthly admin support retainer for current clients).
Either way, you always have the choice to decide what kind of business you want to be in. You’ll be more successful at either of them by being aware of the differences.
What Is a Retainer?