As I start the transition to weekly pricing I thought it would be a great time to explain why I think weekly pricing is a good idea for both clients and businesses.
Less Lock In
I know that I’ve been involved in projects that are going south, at some point it’s just going to happen in business. I’ve even had a client tell me that the only reason we are finishing the project together is that I have a deposit for the work.
I never want someone to stay working with me because of a deposit! We should only be working together because you get value out of my time.
When we move to weekly pricing, you’re only paying for the next week coming up. You don’t pay 50% of the total, just for the next week. That means on a 10 week project, you only have a 10% output of cash in week one. When we get to the second week, I’ve done a week’s worth of work and been paid so you pay for the next upcoming week, and again you’re only paying 10% upfront since I’ve already done 10% of the work.
Since we’re talking about much less cash, there is no lock in. If after a couple weeks you’re not happy with how things are going, we stop working together. I’ve been paid for my weeks of work, and you aren’ left trying to decide how to get some of the unused deposit back.
You only stay because I provided value last week.
Weekly pricing also reduces my exposure. Sure I get a deposit of 50%, but when we’re 90% done the project I’m waiting on 40% of the money. I’m exposed 40%, and that is a bit scary.
When I’m paid weekly I’m not hoping that you’ll pay me in a timely manner. I was already paid for the week I’m working. So I’m not sweating cash-flow. I’m not trying to dig deep to get other clients and get them to pay deposits (while working for you) to keep that 40% I’m out flowing. I’m simply focused on providing you with value this week.
It Wasn’t in Scope
I hate saying ‘no’. If we come up with a great idea that will increase the usability of your site, or make you more money – I WANT TO DO IT!
Unfortunately with fixed bid/fixed feature projects I can’t. See we decided what we were doing, and that is what I estimated on. Since I run a business I can’t work for free, I need to stick to the ‘scope’.
Not only do I have to stick to the scope, we both have to waste time looking back at the scope and deciding if things are in/out. If I’m looking at scope I’m not building stuff to make your business better, and if you’re killing time looking at it you’re not adding content or serving your customers.
Nobody wins when we have to argue about scope and we both waste time and money.
When we’re billing weekly we don’t have to have big discussions about scope, at least when it comes to what was in/out in our original agreement. See I’m yours for the week so I can do whatever we want. If we decide that a feature is a ‘must have’ then we decide if we can fit it in this week or if we have to move it to next week.
We don’t have to agrue about assumptions we each made at the beginning of the project, we just have to look at what can reasonably be done in a week of time.
When we bill weekly, I get to say ‘okay’ to extra items. True we may have to extend the number of weeks we work together, but we’re free to pursue the best thing for the business as we see it now. Not as we saw it 2 weeks ago before we started working on the project.
Programming is an insanely expensive task mentally. You have to sit down and hold most of the project in your head while you work.
You need to know what you’re supposed to be accomplishing and what you’ve already done. You need to remember that you already wrote a function that gets the number of calls a user has left, so you don’t need to write it again.
You need to decide whether the code you’re currently writing goes best in Class A or Class B.
Changing which project your working on has a huge time cost.
Dedicating yourself to a project weekly means you don’t have to switch contexts. I wake up in the morning, get myself ready and then I start on the tasks for a weekly project. I don’t have to decide what clients gets my priority today, I just work on the project for the week.
Context switching costs clients money. It’s always going to take 30 – 60 minutes to really get in the flow of a project again. During that time, I’m not working as fast as I could. That means I’m not as productive as I could be. You want be to be at maximum productivity when I’m billing you.
There are a few questions though.
- What about taking work that is only 1/2 week?
- What about when a former client has a site crash emergency?
- Business Development time?
- What if we get more stuff done in a week than we thought?
When I have an interesting 1/2 week project, I just bill for 1/2 a week. I try not to do that often, but it does happen and I don’t sweat it.
I save every Friday for dealing with any emergencies with clients. If something really has to be addressed in the middle of the week, I make up the time in the evening or on Friday so my weekly clients don’t loose the time they paid for.
Business development and general email checking (emails not with the weekly client) are dealt with after 4pm. So I sit down and from 8am – 4pm I’m working for my weekly client. Yes I take lunch, but otherwise I’ve got a bunch of time where I can focus totally on weekly work.
Once 4 rolls around, I deal with the rest of my email before 5pm and call it at day.
6 responses to “Weekly Pricing for Web Development”
I really like the ideas you are putting forward here … several of which I will be revisiting in the near future to implement in my own projects.
It even makes it easy to hire subcontractor when you sell a bunch of weeks. Just negotiate a weekly rate that’s less than your charging.
This does sound great for those who like that structure in their schedule. I rarely work exactly the same hours so I don’t think I could do it exactly as you do.
Recently I did change from fixed bid to bundles of prepaid hours though, for similar reasons. It saves so much time agreeing on a scope which is inevitably going to change anyway.
I’m certainly still working with the specifics, but you’re right no one wins with endless scope discussion.
I like the idea in general, it just won’t work for some classes of clients – smaller departments in larger organizations, for example. One of my absolute best clients is the PR/Marketing department of a large, regional medical center. The people are awesome, and I’ve been working with them for about 6 years, so no one’s going anywhere.
But it’s a different department that pays the bills.
The organization has a policy that they only pay on invoices after 30 days. So weekly pricing, while nice for smaller clients, would mean a lot of smaller checks coming much farther down the road. As much as I like the client, working on those kinds of credit terms as a small vendor is difficult.
You can still bill them weekly for the work, but you’re right you would have to wait 30 days. For the right client I’d take that, but I’ve never found the right client. The ones offering me 30 days have been agencies who want to pay me 30 days after their clients pay them. That is never going to fly with me, I’m not a bank.