I don’t often write about the business of freelancing or self-employment, but was encouraged recently after positive feedback for a recent piece on the topic of staying in business and realizing premium wages:
Experienced Freelancers: Differentiate by Thinking Long-Term and Telling Clients You’re Doing So
The year 2019 marks my 10th year of self-employment as a web designer / developer. Statistically, they say that most…
So, I’d like to pass along another nugget I wish I’d understood much sooner than I did, because it has a profound effect on earnings. And it’s this:
When a client comes to you with for help— via emails, phone calls, or meetings — you need to pay attention to the time spent on it before you actually do the work. And, often, that time should be billable back to your client, just as much as the actual work itself that they required.
Whether you work 4 hours per day or 20, your time is precious, and it’s easy to see a clock move as though it’s in fast-forward while working on things that many freelancers do not capture as billable.
For example, say you’re a writer, and you’re writing articles at $50/hour. Normally, you would press GO on a clock and start writing. Maybe you write for 10 hours over a few days, and now a client owes you $500. Fair enough.
But then a few days go by, and you get a call (or an email) with them wanting to review a couple of things. Ideas are exchanged in those emails, and maybe you come up with an agenda for a future meeting and/or jot down some comments you want to bring up later. Seems innocent enough.
If you’re like me, you might not have billed for the time spent doing that, even though, when you think about it, you were in fact working for that client by reading their email, thinking about it, writing a response, maybe doing a bit of planning in there as well.
Freelancers can easily overlook this work because they were actively engaged in the administrative side of things — not necessarily writing more articles, as in this example, and not even really meeting yet to review the articles written. In this case, the time was spent doing something else — just plain old communicating and/or working out what any issues are that need further work.
So, I’m speaking simply of any time that can slip through the cracks in a client relationship.
Can You Spot the Insanity?
Hopefully this explains my title, by the way (“Understanding the Problem Is Part of Fixing the Problem”). Clients used to call me, and I’d read their email about a problem, think about it for 20 minutes, and figure out an approach to fix it, and only THEN would I start the clock!
I used to do this a lot, and found that my 8-hour day only had like 5 hours of billing once 5pm came around. Yet, I didn’t feel like I’d had 3 hours to myself for my own business; I’d actually spent the full 8 hours working. So, where did those 3 hours go?!
Hopefully, you’re way savvier than I was, of course. But, I did finally realize that I wasn’t getting paid for working. And it bothered me!
The Simple Fix
So, when you’re setting up client relationships, my advice is to acknowledge this head-on. Make sure to write into your contract, and talk to them about this, that administrative time and meeting time that relates to the client is billable time. You are clearly working for them during this time, and so it should be billed. Simple as that.
But, don’t be a jerk about it, of course. To this day, even though I’m offering this specific advice, I don’t bill for every single thing or every single minute of my day. So, here are some examples of when I would not bill clients:
- If their question is something I can easily answer in a couple of minutes. I do feel, for the record, that nickle-and-diming clients is very bad form, and do not want to imply that I do this! Also, if you’re realizing premium rates (see this article for a take on that), you should want to provide top-quality service and create a relationship through which clients can reach out for quick matters without getting billed for it. So, that’s an important distinction! If it’s a 15-minute thing, I’ll bill them and write something like “Responded to inquiry about XYZ.” If it’s a deeper matter, I’ll usually say something like, “Good question! Let me put some research time toward that and get back to you.” And then I’ll go out and research the answer properly, which is clearly something the client wants me to do.
- Also… sometimes, if the nature of their inquiry has to do with further work or a new project, I won’t always bill for that. For example, if they say, “Hey Jim, we need a super-small web site with like 5 pages, and it’ll use a template and we just need a ballpark figure from you for our budget.” Depending on the client, I’ll probably know enough to respond, perhaps immediately or after a few exchanges, with a figure for them. For small jobs where I can do estimating quickly, I’ll provide them an estimate without charge. Same for prospective clients. I see that as (1) a value-added benefit for clients, and (2) a show of good-will for prospective ones. Same for quick calls from time to time, as periodic communications foster good relations, and that’s equally important!
- One exception I’ve learned to the above bullet, though, is for complex bids. While I love being asked to do major projects, for clients and prospective clients alike, complex bids can take a LOT of time. As such, the bidding process (estimating, planning, etc.) alone constitutes significant work, and I do bill for those. (Don’t forget that a complex project plan / bid is something of significant value to the client, too!) What constitutes small versus complex is a matter of personal discretion, so you need to decide that for yourself. (Truly, this is a much more complex topic, and I may devote an entire article to just this.) But, I’m warning freelancers: Pursue large / complex project bids at your peril if you’re not charging clients to do so. I know a lot of people go by the mantra that “a shot on goal is always a good play,” but it’s simply not true. You can (and will) get burned often if you go down that road!
- And, of course, if it’s not work-related, but is nonetheless interaction with a client, of course that should not be billable. Yes, take your clients to lunch, etc. That’s good business development, and it’s just being a decent human being.
Since paying more attention to this starting a few years ago, I haven’t lost a single client over these practices, or even experienced any of them ever bringing it up as even a remote concern. So, there were zero effects from a client standpoint. Financially, my income increased, though. It was like giving myself a 20% raise! And, more importantly, I felt like I was getting paid for my time.
✍🏻 Jim Dee maintains his personal blog, “Hawthorne Crow,” and a web design blog, “Web Designer | Web Developer Magazine.” He also contributes to various Medium.com publications. Find him at JPDbooks.com, his Amazon Author page, Facebook, Twitter, Instagram, LinkedIn, Medium, or via email at Jim [at] ArrayWebDevelopment.com. His latest novel, CHROO, is available on Amazon.com. If you enjoy humorous literary tales, please grab a copy!