Clinging to hourly billing in service-based businesses is like choosing a leaky boat because you’re afraid of getting wet—it just doesn’t make sense. This go-to strategy, meant to protect you from scope creep and budget blowouts, often backfires, sucking up your time and money when projects expand or complicate unexpectedly. The headache of renegotiating terms and the annoyance of feeling “nickel-and-dimed” can sour client relationships and stifle your business’s growth.
Opting for paid assessments right from the start clears up the scope and value of what you’re offering, letting you manage client expectations like a pro and sidestep those pesky disputes over time and costs. A key strategy when offering an assessment is to emphasize the ACTION PLAN that they will receive at the end as well.
This savvy move can be your golden ticket to working smarter, preserving both your sanity and your profit margins. As you watch the video, think about how crafting your own paid assessment could just be the game-changer your business needs.
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Video Transcription
What I want to talk about first is why assessments are so important in the first place.
For service-based business, what I’ve heard, and you guys can raise your hands with the reactions, is a lot of you guys default to hourly, because you’re so concerned that the client is going to run over or the scope of project has to shift or it becomes more complicated. And you don’t want to lose money. And most of you have been burned bleeding money in that situation. And so you default to hourly under this hope that you’re going to not get taken advantage of, so that you consistently underbid the flat rate projects.
The challenge that I have with that is, and I’ve consistently heard it from you guys, is that you guys are bleeding time and creating proposals that either aren’t accepted or are so grossly out of alignment with the client’s budget or timeline or perceived value of what you’re offering that you either have to you have to just majorly overhaul the entire proposal to close the deal.
That’s not working smarter, that’s working harder. Not a good idea and that way, incomplete or nonexistent client contributions or assets, resulting in having to write up changes in scope, or adding on build time that leaves the client feeling nickeled and dimed and causing me to bleed even more time.
How many of you … have [experienced], I’ll give you a kind of an example, is what they think is wrong is really what’s wrong? So then you get in, and you’re having to go, “Oh, you kind of said this was handled, it’s not handled, this is a mess. So we need to jump in. ”
And you’re, and I think a lot of female founders fall into this pattern of it’s too much time and energy to rewrite the scope of project. So I’ll just add this on. And you make this assumption that the client understands that you’re subbing one thing out for another, because it’s time and then they get come to you at the end and they get pissy because they’re like, “What happened to this contract?”
And you’re like, “Wait a minute, but I did X, Y and Z for you.”
And they go, “I don’t care. That’s not what’s in the contract.”
So you ended up in this tug of war. Plus, when you guys have to bill, you deal with a pissy client? That’s like, I’ve heard a lot of you come back and say they want an accounting of every minute of my time because I sent them an add-on bill for my hours and they’re mad that it wasn’t put into the mix [during the proposal process.]
