{
  "$type": "site.standard.document",
  "description": "Raise your minimum billing unit from hourly to half-day, then daily, then weekly — and you’ll attract larger projects and put the value decision in the client’s hands.",
  "path": "/articles/minimum-billing-units/",
  "publishedAt": "2017-11-30T21:12:55.000Z",
  "site": "at://did:plc:jznynyzgerlqmdbbj33o7wfs/site.standard.publication/3mnll3icujb2z",
  "tags": [
    "Positioning and Pricing"
  ],
  "textContent": "How do you bill your clients?\n\nHourly? $X/hr for each hour you’ve worked?\nDaily? $X/day.\nWeekly? $X/week.\nPer-project?\n\nOne question that freelancers often ask is “How can I attract better clients with bigger projects.”\n\nWhat I’ve discovered is that by increasing your minimum billing unit (the smallest unit you bill in), you’re able to better pre-qualify prospects and projects and work on better, higher paying projects.\n\nWhat does this look like in practice?\n\nGo from billing hourly to billing in half-days or full-days or weeks.\n\nLet’s talk about making the jump from billing hourly to billing half-days.\n\nIf you’re billing hourly, you can start quoting a half-day rate to your prospects. Just take your hourly rate and multiply it by 4!\n\nThat’s now your minimum project size and minimum billing unit.\n\nWhen someone asks what your rate is for a project, you can say that the minimum project size you accept is a half-day project and you bill in half-day increments.\n\nThis small adjustment to the minimum project size that you’ll accept has a range of positive effects:\n\nFirst, you’re pricing yourself for the larger projects that you want.\n\nBy positioning yourself as accepting half-day (or day, week, etc.) projects, you’re positioning yourself for larger projects.\n\nIf someone needs, say, a logo uploaded on their site, great! You can help with that. You have a new rate for this work and the client gets to decide if they want to work together.\n\nWhich brings us to the second point….\n\nSecond, you’re leaving the value decision in the hands of a client.\n\nLet’s say that someone approaches you with a small task. In all honesty, it will take you 30 minutes to do.\n\nIf you’re billing hourly, you’d quote this as an hour project, do it, bill it, and be done with it.\n\nBut if you’ve followed Kai’s advice, you’ve raised your minimum project size (your minimum billing unit) to, say, a half-day or day.\n\nNow when this prospect comes, if you’re interested in the project, you can say that you’d love to work on the project.\n\nYour minimum project size is a half-day and this will be a half-day project. A half-day is $X.\n\nNow the client is able to make a value based decision.\n\nThe client has two factors known to them:\n\nThe price, which you’ve quoted\nThe value (quantifiable and qualitative) to them in having this project completed\n\nIf Value exceeds Price, then it makes sense for them to work with you.\n\n“But,” you might be thinking, “Isn’t this just a 30-minute project?”\n\nYes!\n\nAnd your minimum project size is a half-day.\n\nSo if the client thinks “Excellent, we need this taken care of, we can afford this price, and the value in getting this completed is very high.” then they have determined that value > price and should move ahead with the project.\n\nWhere it can feel confusing for us, as freelancers and consultants, is balancing the fact that this is a 30-minute project with charging a half-day rate.\n\nAnd that, dear friend, is because you have confused the cost, price, and *value.*\n\nThe cost of a project is the cost, to us, in doing the work.\n\nThe price of the project is what we quote the client to do the work (price > cost).\n\nThe value of a project is the value to the client in having the project completed (value > price > cost).\n\nAs a freelancer, it is very easy for us to understand the costs and prices associated with the project. 30-minutes of work. A half-day of our time.\n\nBut what we lack is an understanding of the value of the project to the client.\n\nThis small 30-minute project? While it may look small and tiny to us, perhaps it’s something the client has struggled to do themselves.\n\nMaybe they have a high amount of quantifiable or qualitative value attached to this project being completed.\n\nPerhaps they’ve spent hundreds or thousands of dollars already working with other providers and they’re struggling to get it finished.\n\nWho knows?\n\nThe client knows.\n\nWhich is way the decision on working together is in the client’s hands. They’re the party best equipped to compare value and price and make the decision:\n\n“Is there enough value in this project for us to invest in it?”\n\nWhen you raise your minimum billing unit and project size, you’re optimizing for larger projects. You’re charging more by optimizing your pricing and billing for larger projects.\n\nIf someone comes with a small project and you say “Great, it’ll be a half-day, that’s $X.” Now they can decide if the value exceeds the price. If it does, great! You just sold a half-day project.\n\nIf the client decides that the value is less than the price, then they will pass. Great! You just avoided a smaller project!\n\nAnd that’s what you want.\n\nYou want to be optimizing for better, larger projects.\n\nAnd one of the easiest ways to do that is to increase your minimum billing unit / minimum project size.\n\nSo, what should you do now?\n\nIf you want to work on larger projects, better projects, or higher paying projects, raise your minimum billing unit.\n\nIf you’ve been charging hourly, start charging by the day or half-day. When a prospect comes to work with you, say “Great! My minimum project size is a half-day and I bill in half-day increments.”\n\nIf you bill in half-days already, try moving your minimum billing unit to a full day.\n\nIf you bill daily, try switching your minimum billing unit to a week.\n\nWhat will be the effect be?\n\nWhen a prospect comes to you with a project, you can — early in the conversation — let them know that you don’t bill hourly, your minimum project size is half-days/days/weeks. That’s the smallest amount you bill by.\n\nIf the project doesn’t have enough value for the prospect, then the prospect will be able to recognize — early on — that this isn’t the right fit, and go with another freelancer.\n\nAnd if the prospect sees the value in the project, they’ll be saying ‘Sure, we need this done, let’s get started!’\n\nRaising your minimum billing unit makes it easier for you to attract larger, better paying projects.\n\nSo, go and do it today. If you bill hourly, quote a half-day rate on your next project.",
  "title": "Charge More: \"Minimum Billing Units\""
}