Going from Hourly Rate to Project-Based Billing

Many designers start out charging an hourly rate. This can raise some challenges.
Clients often have a difficult time perceiving the value they receive for the rate per hour they are charged.
  • How do you justify an increase in your rates?
  • Tracking time takes time that clients don't want to pay for.
Another option is to move clients away from an hourly rate to a project fee. The benefits of charging a flat fee for a project include:
  • Clients perceive a higher value received for their money
  • An increased project fee is easier for clients to accept
  • No more time tracking means you have more time to work for clients = more pay
How can you move a client from an hourly rate to a project rate? What if they object? Is it really better?
Let's use a real-life example to show how this can be done to the mutual benefit of both you and your client. For the sake of the example, I'll call this client "Cindy."
Cindy and her designer have been working together for nearly five years. Cindy had her designer do a variety of small projects [i.e. holiday design, seasonal redesign, room refresh]. Originally, her designer charged an hourly rate for all these tasks. The designer had to track her time, down to the minute, and send in a monthly accounting showing how she used the time. She'd then bill Cindy for the hours.
After some time, the designer realized she could get more done if she didn't have to track every minute of her time. Through experience on previous projects, she had also come to realize the time it took to get each task done and that she could get them done more efficiently if she charged by project rather than by the hour.
She then proposed a change to Cindy in how she would bill for services. Instead of hourly, she would now charge a flat rate for each small project. This would free up the designer's time since she no longer had to track her hours. Cindy, the client, would know exactly what it would cost her to get these projects done and she'd know exactly what she was getting in return. It allowed Cindy to create a budget and never wonder if her designer was running over hours.
This worked well for both Cindy and her designer. About a year later the designer proposed a rate increase for smaller services. She gave Cindy 60-days notice so there were no surprises.
Tips for moving a client from an hourly rate to a project fee:
  • Create an addendum to your existing contract outlining your proposed change
  • Give your client 60-days notice so there are no surprises
  • Be reasonable and flexible
Caveat: Never execute a rate change in the middle of a project.

By Sue Canfield
Image from StockSource
For nearly 30 years Sue Canfield, Chief Virtual Officer, has helped small business owners with administrative tasks. She co-authored the book, The Commonsense Virtual Assistant - Becoming an Entrepreneur, Not an Employee, to help virtual assistants understand what it takes to be a business owner. Learn more about their book and coaching services at http://chiefvirtualofficer.com/.


10 Tips For Managing Your Interior Design Career

10 Tips For Managing Your Career

If you have been in the industry for a while, these tips may be helpful in revitalizing your career or in focusing your attention on the need to make a change.

1. Take responsibility for building your own career
In today's work environment managing your career is your responsibility. Even if you are lucky enough to have a mentor you are the one that needs to take charge of building your career. Mentors make suggestions but you decide if the suggestions fit or if they will work for you and then act on them. You must have a vision of where you are headed and then find your own path!

2. Define career satisfaction for yourself
Notice what gives you the most satisfaction and where your passion is. Know your life purpose and use it to guide your design career. Once you know what you love [your niche] and what is most satisfying to you, find ways to do meaningful work either on your current jor future projects.

3. Have a detailed career plan which you update regularly
Make a career plan and follow it. Watch for opportunities that meet your career goals and go for them. If you miss a goal in your career plan, update the plan and create an action plan to attain the missed goal. Use your weekly career time (see #8) to call people (see #6) who can help you to reach your goal.

4. Build your own brand
Find a facet of your work that interests you and that is useful to others. Develop an expertise [a niche] so that you are the "go to" person for this expertise. This gives you a competitive edge and you become known for your knowledge (the expert).

5. Track your accomplishments 
You can not rely on others to remember and credit you with your accomplishments. Keep a list that gives your accomplishments in the format that states the problem, the solution and the result. You can use this document as a reminder for yourself during your annual review and also as a basis for updating your resume.

6. Build relationships
It is all about your network. Building and maintaining relationships with people in your field and people who are in a position to help you move forward in your career is imperative. Start with your college professors! Find other mentors, advisors and coaches along the way to help you expand your network. Stay connected to colleagues from past jobs who may be able to help you in the future.

7. Communicate frequently 
To become known as an expert in your field you will need to write and speak frequently. Work with the leading professional organization in your field to speak at meetings and write for their publications. Find other places to speak and write on your expertise. This will help you to build your brand, become an expert in your field, and meet other people who can help you to move forward.

8. Set a regular time each week to work on your career and brand building 
It is easy to get caught up in the activities of the job and to convince yourself that there is no time for working on your career. Doing that may be good for the company you work for but it is not good for your career. Setting time aside weekly to add accomplishments to your list, to identify people to network with and to find meetings to go to is an investment in yourself and your career.

9. Know your value to your clients & industry
Why would others want you on their team? Be very clear on the value you bring to the project and be able to say it simply and clearly. Take credit for this value and let others know about it. It is part of gaining credit for being an expert and branding yourself.

10. Be proactive
Don't wait for others to do this. Get started today! In this case the early bird gets the client, the best projects and the bigger jobs.

By Alvah Parker
Photography by Francois Etienne Du Plessis

Alvah Parker is a Practice Advisor (The Attorneys' Coach) and a Career Changers' Coach as well as publisher of Parker's Points, an email tip list and Road to Success, an ezine. Subscribe now to these free monthly publications at her website: http://www.asparker.com/samples.html