Hourly Rates and Hours Proposed
My hourly rate is very reasonable. I do business coaching as a sideline business so I can afford to keep my rates affordable for small business owners. My “day job” covers my day-to-day expenses. I don’t publish my rates on the website to avoid the temptation to price-shop. It’s important to me that my clients select me to work with because I’m a good fit for them.
The number of hours required to do the job is just as important as the hourly rate. The success of my business (remember, I’m a small business owner, too) is dependent on my reputation so I am committed to working efficiently to get the job done to your expectations. If you feel that I’m estimating too many hours, let’s talk about it so we can both agree on how much work is really involved.
Word of Warning: As you compare consultants, coaches and other service providers, remember that there are two aspects of cost – hourly rate and hours quoted to do the job. Just because an hourly rate is very low doesn’t mean that the total proposal cost will be low. Some less-reputable service providers will loudly promote a very low hourly rate to get you in the door and committed before you learn that the total time quoted to do the job is much higher than it should be. Be sure to ask about hours and hourly rate when you are doing your comparison shopping. Don’t be afraid to ask about how estimates are generated.
“Time & Materials” vs “Firm Fixed Price”
I understand that everyone prefers to have a firm fixed price proposal – in other words a set price to do a specific task or project. If we can adequately define that work that needs to be done so I can accurately estimate the time necessary to do the work, I will be happy to propose a firm fixed price. An example might be doing a SWOT Analysis. It’s a straight forward task that is easily estimated. However, if at some point you decide you would like additional support, I will generate an updated proposal including the additional effort and ask for your approval before starting work on the new part of the project.
In some cases, it is just not possible to accurately estimate how much time will be necessary to do the work. An example might be writing a strategic business plan for an owner who doesn’t have a clear and detailed vision of where they want to go. It could take five hours or it could take 15 hours, depending on how the conversations go – we won’t know until we get into it. In the case where an accurate estimate isn’t possible, I will generate a “time and materials” proposal. The proposal will still have an estimated number of hours to do the work, but you will agree to pay for the hours (and any materials, hence the name) necessary to do the work. It could be more or it could be less than the original estimate. I will keep you updated on the budget status as work progresses (in the status reports) so there aren’t any surprises at the end. Again, my business success is dependent on my reputation, so I will work as efficiently as possible for you.
I recognize that start-ups and small businesses are strapped for cash. If you are able to pay our agreed upon fee in one lump sum – great! It makes life easier for both of us. I will issue an invoice with payment due in 15 days.
If that type of arrangement doesn’t work for your cash flow situation, I offer payment plans where you can spread the payments out up to one year with an automatic recurring credit card payment. I use PayPal so your data is safe and I can accept all major credit cards. Please understand that I am taking a risk by offering a payment plan so the hourly rate will be higher than if you pay in one lump sum. The details will be spelled out in the proposal so you can choose the option that works best for you.