Why You Should NEVER Charge Hourly

In my brand consultancy, I always charge a flat fee for my service. Clients never have to guess what they’re paying vs. what they’re getting. I’ve structured my business this way for several reasons. If you’re charging by the hour or even paying other specialists by the hour, I’m here to help you see why you’re sabotaging your own success.

I haven’t hired a service on an hourly basis in years, but recently, I tried it again, and it only reaffirmed my decision NOT to make a habit of it:

I hired someone to help us with marketing strategy and implementation. She was going to be a sounding board for us, helping to ask the big questions, but she was also willing and able to get in the thick of things and give feedback on copy and ads, or even deploy some herself.

She sounded like a unicorn, and she very well might be. But she charged hourly, which has become a red flag for me. She said she charges a flat rate on a monthly retainer, which includes 8 hours of work. Do the math—it’s an hourly rate. But she works fast, she said! And I liked her thinking, so I gave it a try.

Here’s how that worked out:

The clock became my central focus. We got on a strategy call, and she spent the first 15 minutes explaining a new marketing strategy she had just learned about. Before she was done explaining it, I realized she was explaining a strategy we had already deployed ourselves last year.

There were other times when she explained something that I could sum up in a couple of sentences. I realized she could have covered it in a few minutes, but her way of speaking and explaining included a lot of unnecessary back story. Which is totally fine!

She likes to put things into perspective, use examples, make connections—I get that. I know I’m better than most at cutting to the chase and being concise. But when I’m paying you by the hour, and that 15 minutes cost me 60-something dollars? Now I’m just annoyed. And that’s not a good way to work with someone.

Know How to Charge for Your Value

I get it—some work for clients is hard to anticipate.

In certain circumstances, it feels impossible to charge per project instead of hourly, but put it into perspective: Would you rather be paid for the value of your work, even if it doesn’t take you very long? Or would you rather be paid for your time, since some things can take you longer than you think?

If you’re being paid by the hour, it means you haven’t cracked the code on your value.

You don’t know how long things take (although you do get better at estimating with experience), and you’re worried you will spend more time than you’re paid for because you don’t actually know what it takes to deliver the goods. Experts charge based on value and understand that, the better they get and the more value they have to offer, the more they get paid for less and less of their time.

It’s okay if you charge by the hour right now. But if your goal isn’t to move into the status of experts and charge based on value, you’ll be destined to stay under an income ceiling you will never break through.

In my FREE Price To Freedom mini-course
I will share with you:

• Why your current pricing strategy— charging as much as you think people will pay, or basing your prices on what your competition is charging—is your biggest downfall.
• How to achieve your key price as quickly as possible.
• And how, once you achieve your key price, how you can keep using this formula tool to achieve more and more financial success, while freeing up more and more free time.

Get the FREE Price To Freedom mini-course where I will walk you through finding your key price to getting paid for value, instead of your time.

Click to get immediate access