Being a small but profitable company, Planetary has the luxury of experimenting with some of the basics of what we sell and how we sell it. Simply put, we sell our team’s ability to develop products; other agencies and studios do this, and most measure their output in hours. We don’t.
We measure in units of weeks, not hours. When we partner with a client on a new project, we assess how many weeks it will take us to accomplish the goal, and set start and end dates. The number of weeks multiplied by our weekly rate (the same rate for each client) gives us the project’s cost.
Our industry often deals in hourly rates, line items, overage, retainers — for new clients, there’s no good frame of reference for weekly billing. So we’d like to provide that context, to show that it really is simpler, less stressful, and a better value for everyone.
Advantages of a weekly billing model
Transparency: A set weekly rate eliminates inscrutable formulas and makes predicting costs simple.
Consistency: Because our weekly rate is standard, clients don’t need to worry about whether someone else might be getting a better price from us. No negotiation required: every client gets the same rate.
Respect: When both parties commit to a start date and an end date, everyone has an incentive to keep things moving. If clients hold the project up, they get less for their money; if Planetary holds the project up, we’re less productive, and less profitable.
Reliability: At Planetary, the project end date is not a moving target. It is fixed. This might seem impossible, given the unpredictable nature of software development, but we manage uncertainty through smaller, faster iterations and flexible resources, not shifting timelines.
Focus: Instead of dividing our days and our teams between hour-long compartments, we spend however much time is necessary to solve a given problem. Less context switching means higher productivity.
Flexibility: A weekly project rhythm allows us to put the right combination of people on the job at the right time. A partner can jump in on a project when needed without added cost to the client. We can experiment and explore when we’re ahead, or we can focus and crunch if we’re behind.
Rhythm: Every week, there’s a checkpoint to assess and realign before moving forward. This means reliable updates to our team and to our clients, without the management overhead.
Problems with weekly billing
There are certainly some tradeoffs to billing by week. Partnering with Planetary comes with a mental shift, and our estimates require a high degree of collaboration with our clients. To keep the work continuous, we ask for feedback often and test with stakeholders regularly.
Sometimes, projects are slowed down for reasons outside of anyone’s control: we need feedback from someone who is on vacation, organizational priorities change, or our partner’s team changes, to name a few. Weekly billing doesn’t “pause” as well as hourly billing does; that’s by design.
Scope can change too: most projects naturally evolve in scope in small, manageable ways over time. To account for unexpected changes, we’ll sometimes add a week to the engagement. With hourly billing, this might seem like a big addition — 40 more time units, at least! Weekly billing makes it easier to understand, predict, and plan for well in advance.
Room for improvement
Of course, there are no silver bullets. We are constantly experimenting with the way we structure our work, and are always finding ways to align our goals with our partners’. If you run an agency, you’re likely doing the same. How do you structure your estimates and costs?
We’d love to hear your thoughts.
Editor’s Note: this article was originally drafted by Azy Groth.