ASK George GPT – Should I charge by the hour?

homeless guy in front of ferrari trying to sell it

Last Thursday we held a live event where I introduced the Beta Version of George Business Advisor GPT. 

 

George Business Advisor GPT is based upon my Book Roadblocks You Can’t Ignore (see PS below for details) as well as my consulting notes, discussions and presentations.

 

One of the attendees asked whether he should charge by the hour.. Read below to see what George GPT had to say about it.

 

Question: Should I Charge by the Hour?

 

George Business Advisor GPT Response:

 

Deciding whether to charge by the hour or use an alternative pricing model depends on several factors related to your business, the nature of your services or products, and your market. Here are some considerations to help you decide:

 

Advantages of Hourly Pricing:

  1. Simplicity: It’s straightforward for both you and the client to understand.
  2. Fair Compensation for Time: You are paid for all the time you work, which can be beneficial for projects where the scope is not well-defined.
  3. Flexibility: Easier to adjust rates based on the complexity or demand of the work.

 

Disadvantages of Hourly Pricing:

  1. Limits Earning Potential: Your income is tied to the number of hours you can work. It doesn’t scale well as your experience or efficiency increases.
  2. Less Incentive for Efficiency: If you become faster and more efficient, you might earn less for the same job.
  3. Uncertainty for Clients: Clients may prefer a fixed cost for budgeting purposes. Hourly rates can make project costs unpredictable.
  4. Can Discourage Value-Focused Relationships: Clients might focus more on the hours spent rather than the value or quality of the work delivered.

 

Alternatives to Hourly Pricing:

  1. Project-Based Pricing: Charging a flat fee per project. This is beneficial when you can accurately estimate the time and resources needed.
  2. Value-Based Pricing: Charging based on the value or outcome of your work to the client, rather than the time spent.
  3. Retainer Model: A regular, fixed fee for ongoing services. This provides predictable income and simplifies billing.
  4. Package Deals: Offering bundled services or products for a set price.

 

Considerations for Your Business:

  • Nature of Your Work: If your work involves highly variable tasks or uncertain time commitments, hourly billing might be more appropriate. For predictable, standardized services, consider flat-rate or value-based pricing.
  • Client Preferences and Industry Standards: Some industries or clients might have a preference or expectation for hourly billing.
  • Efficiency and Experience: If you’re highly efficient or have specialized skills, value-based or project-based pricing might better reflect your worth.
  • Transparency and Trust: Clients often appreciate knowing the total cost upfront, which can be more challenging with hourly pricing.

 

Ultimately, the best pricing model is the one that aligns with your business goals, reflects the value you provide, and meets your clients’ needs and expectations. It’s also possible to use a combination of pricing strategies for different clients or projects.

 

 

What do you think?  Want to ask George Business Advisor GPT a question?

 

Personally I have some additional thoughts but will share them later including the alternative I didn’t mention here – Impact Based Pricing which is the topic of our 5 December Advisory Mastermind.

 

To Your Success and Sanity,

 

George

 

P.S.

Register for Our upcoming Pricing Mastery and Business Acceleration Advisory Mastermind on 5 December at 11 am EST / 4 PM UK / 8 PM GST.

 

Our mastermind is the guide you’ve been searching for. 

 

No more leaving money at the table when you use our guide and tools for powerful and effective pricing. 

 

Practical tools that you can implement immediately to change your business and your life.

 

Join us and step boldly onto the path of pricing mastery.

 

Click here to reserve a spot.

 

P.P.S.

My Book Roadblocks You Can’t Ignore: 10 Roadblocks Holding You Back From The Freedom You Deserve From Your Business is now available in paperback and Kindle on Amazon.com and other Amazon stores. 

In the UAE, you can order the paperback directly from my by clicking this link.