Do you have these Problems with your Hourly Rate?

You can't live with and you can't live without it. This is what I have to say about my hourly rate.

I don't need it, in the first place, but my clients obviously do. I mean, every client and project are specific and unique in their own way. The best way is to determine a price from case to case, strictly individually.

However, I noticed, the clients want to have some kind of a warning sign, so to speak. How much is going to cost me? This is what they all want to know. They're obviously making rough estimates. Your hourly rate is like this. I estimate it's going to be like 5 or 10 hours. Something like that. This is the lovely theory. Now, let me show you what's happening in the real business life.

What's the best way to track working hours?

Software or no software? So far, I have always had only two options. Either I agree with the client to use some tracking software or to create a simple excel table and just put the working hours in it. At the end of the week or month, we draw a line, evaluate the work and working hours. I get paid we move on.

So, what's the problem? Well, these tick-tock-clocks are getting on my nerves. It's just like someone is watching me over my shoulder. It's not natural and if you asking me, it's humiliating. The software monitors the time I spend working, how many times I move my mouse or click on a keyboard. The worst part, let's say you work eight hours, but you have only 5 effective hours you can get paid for. I know, you put the hourly rate you think is fair and problem solved.

When I'm using a simple excel sheet for the same purpose, the things are much more relaxed. I am a fair player. I say in advance, how many hours it usually takes me to do some job, so the client can see for himself whether or not the excel time tracking table it true. Here it is all about the trust. You can trick me once, but you can't trick me twice. I am really fair in using it. I don't put every single second I work on project or every Skype talk, that's for sure. Yet, for some reasons, clients prefer the software option.

What's a fair hourly rate?

How to determine an hourly rate that's fair for both parties? Maybe, $100 per hour is fair for me, but I'm sure my potential clients aren't going to be thrilled about it. On the other hand, you want to be fair, but what do you get in return. You put $40. Then, I talk to a potential client. After 15 minutes or so, I realize this isn't going to work. He was like, let me pay you for your time. You may say, this is fair, I will say, I don't need ten bucks. Yet, do you know how many conversations such as this I have on a daily basis? Hours and hours of unpaid time slipping through my fingers. It's a business risk? Please!

So, if it's too high, you are going to scare off your clients. If it's too low, you are always going to feel bad about it.

When does the clock start ticking?

What about this problem? Before we begin with the work. We need to negotiate. We need to clarify things. OK, these are reasonable things to do. Call me stupid, but again, I'm the one to pay all the bills.

So, I like to start a friendly way. Like I'm not in a hurry. I don't rush things. I'm patient. I take time to discuss all the project details. You need to sacrifice an hour or two to get work for 10 or 20 hours. Right? Negotiations fail. We need to discuss many things before every phase of the project begins. What then?

On the other side, if I begin our working relation like I'm so maniacally obsessed with the time, it's not going to end up well. Right? How I'm going to present myself? It's just like a job interview. You think about the salary, but all you do is talk about the job you're applying for.

After all the trouble, I applied a 45-minutes rule. If we can't figure out what needs to be done in 45 minutes, then I'm not going to accept the job. Right or wrong, I'm not sure, but I need something to protect me. It seems like this is an unavoidable lose-lose scenario for me. Either I will lose money, if I'm in my friendly mode, or I will spoil the positive working atmosphere, if I'm obsessed with the time. Like there's no way to turn this one into a fair win-win situation.

Do you think more about the clock than the work?

When I work on a project based price, all I worry is the project itself. I can focus completely. When it comes to hourly based projects, my first and my last thought is the time. I am fully aware that the same job can actually cost you more time as a fixed price based project. You get less money than you would get, if you were to do it as an hourly based one. Yet, if I don't have the pressure of time related thoughts, I don't notice this problem and honestly I don't care. So, in a way, it is a matter of personal perception. OK, I get it, but that fact doesn't solve my problem with the time.

Also, if your goal is to hit 8 hours of work on your hourly project, then you should be aware that these 8 hours can easily stretch into 10 or even 12 hours of total time. At least this is what happens to me. So, 4 to 5 hours of effective or let's say net time turns into 6 to 8 hours of gross time.

Finding a solution for my hourly rate problems would be great. I can't say, I don't work on hourly projects. I can't go on like this. Something needs to be done. Let me hear, how you handle your time.

Thx.
T