Bill Your Clients for Every Last Little Nitpickin' Thing

By Jeff Denton Mar 15, 2006

Ok, I’m being a little dramatic I know. But I feel pretty strongly about this topic because I wrestled with it myself for years. A few not-so-subtle experiences ultimately formed my opinion on the matter.

I once had to hire an attorney to settle a dispute and I took keen interest in how she billed me (at $250.00 per hour). While in her office, she started a timer the moment I darkened her doorway and stopped it when my foot was past the threshold on the way out. Her invoices weren’t quite as exact - she rounded up to the nearest 1/4 hour and at $4.17 per MINUTE this adds up. No freebies here.

Sitting in my office one day it occurred to me that I was constantly swamped with work but always seemed way short on cash flow. In passing, I relayed this observation to a close friend, emphasizing that my workload was certainly the result of my obvious skill as a designer. “My clients love my work”, so my thinking went. My friend was almost too quick to point out that “Some people will love you just ’cause you’re cheap.” Ouch!

The pain of a heavy workload coupled with an inability to pay your bills is a quick receipe for throwing in the towel and flippin’ burgers for the rest of your life. So, back to our original premise - bill your clients for everything! Let’s explore this with some mind-games I used to play on myself (and my wife) back in the days of famine.

Clients expect to get free quotes.

This may or may not be true but it was a bedrock assumption I held. Shoot, everyone from Les Schwab to Home Depot gives free estimates or quotes. But large companies have two things going for them that most of us don’t: numbers and systematization. They have their estimation process down to a science - it’s fast and sometimes even accurate. And they have the customer base to justify 5 looser estimates for each one that makes some money.

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Now, what about us? Well, I was spending approximately 3-4 hours on each free quote. That’s time to drive to the clients’ place of business, interview the client for one hour and then draft the quote. One-half day of no billable hours which is fine if you’re playing golf.

It got to the point where only about 1/3 of my free quotes returned as actual projects. The successful quotes averaged around $1,800.00. At the time I was billing out at $65.00 per hour which means that I was spending $520.00 to acquire an $1,800.00 project. Not a very good prognosis for success.

Lesson Learned: Bill for quotes, estimates and other administrative tasks. Most professionals do not give away their time in any capacity and your clients should know this already. If a potential client balks at paying for an estimate, they do not value your service or time. Direct them to your nearest competitor so they can go out of business instead of you.

If I do this one project cheap, the client promised more work down the road.

If I had a dollar for every time I heard this sad come on line. I’ve been approached with these offers no fewer than 10 times in the past five years. The come on generally goes something like this… “I’ve got this market smashing idea - but I don’t have any funding just yet. Do this job cheap and I PROMISE you’ll get all the work you can handle.” Or, the more seductive…”I’ve seen your work and I LIKE IT! I’ve got (insert some number here) potential clients just waiting for your design expertise. I just need to know you and I will work well together before I commit to paying a lot of money. I’m sure you understand.”

Both of these positions are insulting to any honest person - or they should be. But maybe you’re trying to build your portfolio and you need a new client. Or, you’re trying to push your skill set beyond Front Page. Or, you’re just going through a dry spell and any work is beginning to look enticing. Having, at one time or another, faced all of these scenarios I can still say with vigor, RUN don’t walk to the nearest door, fire escape, window, whatever to get away from a offers like these. Folks who propose these offers are on the prowl for the weak and hungry looking to take your dinner.

“Oh, come on man. You’re being dramatic again!” Sure, there are a very, very few scenarios where you might be advantaged by providing some cheap labor. Close and trusted business associates should be able to count on you to share some perks if they’ve stuck their neck out for you at one time or another. And legitimate “investment opportunities” do arise from time to time – but rarely.

Lesson Learned: simply commit to charging what you’re honestly worth all the time. Again, I go back to the fact that a true professional will not give away their work for free and good clients know this.

Clients don’t like being billed every time they call or email.

This may be true of some folks but certainly there are many people who know the costs involved when dealing with professionals and they expect to spend some money. I always felt like I would somehow impose a burden on my clients if I didn’t allow them to freely call at any time with any question that came to their mind.

Billing for communication with the client does two marvelous things: it increases your billable hours and keeps clients from wandering into your office and wasting an afternoon while they suck every last bit of hard-earned expertise right out of your head. When I knew my attorney would bill me $62.50 for every phone call, you bet I thought long and hard about what I wanted to ask and whether I needed to ask at all. Imagine you have 4 active projects - not unrealistic for a single developer. Each of those 4 clients will likely contact you an average of 6 times per week, more if their project is just starting or ready to launch. That’s an average of 24 emails or phone calls per week. Let’s say a phone call lasts an average of 15 minutes and it takes about 5 minutes to thoughtfully reply to an email. To make this east, let’s assume that your 24 points of contact throughout the week are split 50/50 between emails and phone calls. That’s a total of 4.5 hours per week spent communicating with clients. Throw in a few random emails or calls from previous clients and you can see how this quickly becomes a nighmare if you’re not billing for this service. Put yourself in the shoes of your client. Would you rather pay for a thoughtful, prompt and accurate reply or get a hasty, thoughtless, inaccurate reply for free - or no reply at all.

Lesson Learned: find a way to recoup time spent communicating with clients. You can pad your estimates by some percentage to account for this, submit a monthly, detailed invoice, wait until the project is complete and add this expense to the final payment – anything is better than letting this one go unpaid.

I want my clients to LIKE me - and they won’t like me if I charge too much.

Man, oh man this hurts. Some of us just need to be loved so we accommodate the impossible in order to please. What we inadvertently wind up doing is dropping the ball a lot - or maybe I just speak for myself.

Now, relationships in business are extremely important and I value relationships more than anything else. Really, I do. It’s rewarding to get a fat check, but to me it’s more rewarding to hear someone say, “Good job!”. However, without the fat check we won’t be around to get the pat on the back. So a balance must be found.

Again, I go back to my experiences with other good professionals. What is it that made me like THEM? Without fail I have to say it was their competence and attitude that impressed me. How much they charged is almost a non-issue. Our customers want us to do a job and that job is to design a web presence that will make them money. If we’re nice to them, that’s a big bonus. But if we’re nice and DON’T do the job well, we shouldn’t expect our clients to be nice to us.

Lesson Learned: my client doesn’t want to invite me to their summer BBQ, like their dog or marry their daughter. They want me to work on behalf of their company to increase revenue using the web as a medium – simple as that. They demand competence over nice any day of the week.

This is a brief list that I’ve managed to beat almost to death. Look for more items down the road.

Thanks for reading.

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Jamon Holmgren Nov 13, 2008

Wow, you are right on with this one. I have exactly the same tendencies.

I really hesitate to charge for quotes. I guess my conversion rate is somewhere around 75%-85% though, and I'm usually spending only about 1 to 2 hours per estimate, so the payoff is better. I try not to meet with clients unless they specifically ask for it. Also, I charge hourly for most of my work with an estimated range ("This site should cost between $1000 and $1200, but I'll let you know during the process if this will change.") Believe it or not, most of the time my clients trust me on this--and I always try my best to deliver it unless they ask for things that are outside the scope of the original estimate.

I do work too cheaply though, and I don't charge for everything I should. It's something I'm definitely going to address in my annual business self-evaluation. I don't think I can up my rates right now (I'm at $55/hour, which is cheap, but I also get as much work as I can handle which is great). However, I can start charging for phone calls especially and possibly even e-mails. I prefer to be upfront with my customers about it rather than just padding my hours. I think they appreciate that and usually will understand.

I do want my customers to like me. This sounds kind of weird but it's true...I want them to be afraid of losing me. I want them to come to me with everything that they know I can do, because they know they'll get good value and I'll try my darndest to make them happy. I never want a client to feel like they're only going with me because they don't know where else to go and I'm semi-adequate.

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Adam Rowan Mar 22, 2010

Hi there! I just bought your CreativeOffice Pro source code, and I found your blog! I really like this article as my business partner and I just started our business doing web design. I hope to learn from this article on how we handle our customers and our time. I think this article would apply to the same kind of situation where a small business owner tries to do everything him/her self like accounting, taxes, etc... Sometimes it pays to pay someone to do things you are not in the business for. It takes away from your time to make money doing what you do best!

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