If you charge an hourly rate, even if it sounds like a lot, it's likely that you are not providing your client with everything they need. You are also short-changing your bottom line since it precludes you from scaling your business. There is a limit to the hours you can work, but no limit to the value you can provide to clients. Basically, hourly rates work great for low-wage jobs, but not for your service-based business model.
Why don't you charge enough?
Examine your belief about what you and your services are worth. Even at 250 dollars an hour, you are leaving money on the table. Often, people who charge an hourly rate have doubts about their value. Placing an hourly value on yourself can add to low self-esteem. Examine any such limiting beliefs and work with a professional to recognize the pricelessness of your value.
Here's a perspective on the hourly rate model that you may not have explored. If you find yourself saying, "yes, but" as you read these points, it probably means that you are the perfect candidate to make this change. The people who strongly object to this concept are usually resisting out of fear of failure.
What is the value of your service?
Instead of comparing yourself to the competition, look into the life and business of your ideal client. What problem do you solve, and how does it make their life better? For instance, if a leads expert sends 200 additional qualified leads to their clients' websites each month, there is the potential of increasing the client's income exponentially. And, it goes even deeper than that. The client can now spend their time focusing on money-making activities rather than the stressful task of finding new business. Can you put a price tag on that?
Your customers will question everything you do.
If you have the hourly wage mentality, so will your customers. They will stick to the bare minimum on the deliverables, therefore, they are are not getting everything they need from you. Customers often nitpick and ask many questions about your time log because they cannot understand why creating a logo or fixing a coding issue could take so many hours.
A constant barrage of questioning only adds to the doubt you may have about your value. The truth is, the customer is only protecting their investment. An hourly wage creates a lack mentality on both sides of the table.
Invoicing for hourly wages is a full-time job.
Tracking every minute is stressful and time-consuming. Consultants also tend to err on the client's side, short-changing themselves significantly. Those who charge by the hour rarely document their time and income thoroughly, leaving them with no idea of what they have earned or lost on any given job.
You will attract your ideal client by packaging your services.
When I began my coaching practice, I charged clients by the month with three sessions each month. It was messy, did not serve my clients well, and provided me with a very unpredictable income--one that did not support my family well. Clients did not prioritize their coaching, even when the results were astounding. If I did not value my services, how could they? Charging monthly fees attracted clients who would drop out or not show up for their sessions.
My current model is based on engagement rather than a number of sessions or hours. Now the majority of my clients commit to a one-year engagement, and most go well beyond that. There is a limit to the number of sessions provided, and whether the client achieves their goals in twelve sessions or the full allotment of sessions, the fee is the same. My clients pay for my history of success and expertise, not for a pre-determined set of hours. Such a model attracts clients who are serious and committed to their goals. In other words, my ideal client.
What to do instead of charging an hourly fee.
Base your services on a flat, or per-project fee. Another option is performance-based compensation. In many cases, I consider the latter risky because the definition of success, as well as who is responsible for it, can be subjective.
When you layout the prospect's purchase options in a good, better, best format, most will select the option that falls in the middle. When you lay it out based on hours of work the prospect's brain automatically kicks into the "he or she may not be honest and rip me off".
Examine your offerings. Are you servicing your clients to the fullest extent? Are there services you could add? If you broaden the scope of your deliverables it allows you to hire contractors to perform some of the work at a lower wage. This leaves you with a more considerable profit margin. Just be careful not to dilute your services with too many options or things that don't fit in well.
Provide a clear, concise scope of services and an engagement contract.
Think of everything that can go wrong with the job and the relationship. Hire a lawyer to write your contract based on this data, in addition to the deliverables. Be very clear about what you provide, as well as the exceptions.
An hourly wage sends a message, and it's not a good one. Price for value, not hours. It is a learning curve for both, you and your prospects, but one that pays off.