9. What Albert Einstein can teach us about billing
2December 13, 2013 by Joel_Hughes
Apparently Albert Einstein once said:
If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask, for once I know the proper question, I could solve the problem in less than five minutes.
We, as people who solve problems using web technology, need to bear that in mind.
The act of ‘building‘ is only one element of what we bring to the table. In reality (and this surprises many people) it may not be this element which adds the most value.
Experience
For many of us; it is our experience which the client is buying in to. It is our experience which guides us to elect the best path for client to take. Our experience allows us to plan on the client’s behalf. Once the planning is done; the actual execution can almost become a secondary task. Almost.
Let’s try and give this some context. Yesterday, Ruby/Sinatra smarty Tim Millwood tweeted this:
…aint that the truth!
As designers/developers our natural instinct is to think:
How long coding or in Photoshop [INSERT TOOL OF YOUR CHOICE] will this task take me?
And that “coal face’ element of the job is indeed a factor in how much we bill. But you must also focus on all the other bits which need to be accounted for as well (e.g.)
- Scoping the problem with the client
- Negotiating with the client
- Meeting/emails
- Preparing documentation
- Setting up the client in your workflow
- Organising your workflow/team
- Invoicing
…that list goes on and on
All of those elements need to be billable; because someone has to pay for them. And you’re in business to service clients. And if these expenses are incurred in the pursuit of you executing work on behalf of clients; then you need to remunerated.
And we haven’t even mentioned bills, computer kit, training etc.
All of this stuff has to be paid for. And, when you recognise that fact it helps you work out your pricing; because your pricing needs to be high enough to cover all of the elements required for you to perform the duties of your work. If it does not, you are losing money. And that is bad business.
Invoice line item 34 : Yoga for my Wellbeing
Now I’m not saying that you need always to be explicit with your invoice line items (nor am I saying ‘be devious‘). If you think your client will query the time spent answering their emails or general project management then either work hard to educate them or, as a short cut, include those costs into your dev time. It doesn’t bother me how you do it – just make sure that you get paid for your work (and all of it).
The planning of work and the handling of the client can ended up taking as much time (if not more) than the actual ‘work‘. But it is a crucial pre-cursor to getting the dev work done in the first place. So don’t be ashamed or reticent about billing for it.
Hopefully that has given you some food for thought: let Einstein help you earn more money.
Joel
I’ve always thought this way:
Your hourly rate should be set according to your knowledge level (I refuse to use the term experience level here because experience != age and age != experience, and your pay shouldn’t directly correlate to your age, rather the value you bring to a project).
Your “billable hours” are the amount of time you spend doing things that, if the project and client didn’t exist, you wouldn’t otherwise choose to do.
The time you spend on the phone, writing e-mails, doing nothing but think about how to respond or react to a problem, even the time you spend choosing how to itemise the invoice, is all billable time for that project. “If this project/client didn’t exist, would I be doing what I’m doing right now?”.
Like you suggest, the challenge is getting paid for that time without appearing to be petty. “I got charged £35 for one phone call” feels petty. I’m not sure I’d like to be remembered as the guy who makes sure he charges for every second (doesn’t that feel a little solicitor like?) I’d prefer to be remembered as the guy who gave the very best solution for a decent price. So I favour broad-brush invoices over itemised ones.
For me, less itemised invoices but more focus on the value and experise you bring to the table right from the beginning to the end of the project is what works well in solving this problem. Working transparently and exposing your thought processes and decision making routes is a great way to show that nothing is a 5 minute job, and that they’re paying for more than a photoshop/text editor jockey.
Hey Ed,
thanks for stopping by the thoughtful response:
Yeah – you don’t want to nickle and dime people but, at the same time, there needs to be a level of expectation and an agreement to match. Ultimately you have to account for your time you expend to ensure you earning the amount of money your business needs to bring in to achieve the lifestyle choices you’ve made.
Agree. And I always make it clear to the client that that expertise is billable. At the start of many of my projects there is a ‘Discovery’ phase – this is when we really get to roll our sleeves up and to dig into the client’s* problem domain to see what else we can uncover. They may have asked for a simple WordPress blog but perhaps we’ll find other needs which need to be addressed by other tools – my expertise here can not only save them a lot of time & money but it will also bring a lot of value to the company. That is billable time.
Joel
(*and they are a client at that point, not a prospect or lead)
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