More time-sheet follies

We are not all the same

Hammering home my point about time sheets, remember how much we are selling in terms of our know-how. For those hung up on charging for time spent on each job, if you must think about time, remember how much of that you spent learning to do what you do.

What counts is always what value both in comfort and in money we give to our clients. I remember once upon a time when I was with a large firm we sold a product which saved a particular client £500,000 every year, for which we charged £50,000 just once. The staff time doing it in terms of salary and overheads cost no more than £15,000. The client was happy to pay, still being ahead £450,000 in the first year, and the whole £500,000 per annum for several years afterwards.

Not long before I “left” my last job I was beaten over the head along with the team for having hardly any time down to clients on my time sheet. Those who were upset were stuck in the Dark Ages. Most of my time was spent on research with a little marketing and selling. As I said , selling was not my best attribute, but of the one-in-four (let’s be conservative) products I sold, the price was £6,000 to £10,000, and I had just done one for £30K for a couple of weeks work, because that was what it was worth to the client.

You have worked hard. Your knowledge has cost a great deal of money and a lot of your time. Always remember what you are worth and don’t sell yourself short. You will, won’t you?

Enhanced by Zemanta

Dealing with yesterday’s men and women

 

Harold Wilson, UK Labour leader, at a meeting ...

Harold Wilson, UK Labour leader, (Photo credit: Wikipedia)

Old times

In 1970 the Labour Party published a poster during the General Election describing the Tory opposition as “Yesterday’s Men”. It was a short-lived element of the campaign and was withdrawn very quickly. The Labour Party lost that the election, but we can understand the thrust that the Tory old guard had not moved with the times. Prime Minister Harold Wilson had some years earlier talked about “”burning with the white heat of technology,” which he saw as something in which the country should be involved. He believed in modernity or at least thought it was a good theme for winning elections.

As an aside I hope I can say that Wilson was not a conviction politician. He wanted to be Prime Minister, achieved that objective, and thought that was enough.

Modern times

Perhaps that was not so much of an aside though when we see people in larger businesses promoted beyond their appropriate level in accordance with the Peter Principle. They are often yesterday’s men and women with yesterday’s ideas, just happy to be where they are. In the modern world, we have to adapt in business or our business dies.

Time sheets

Yesterday’s people stick with yesterday’s ideas. I have nothing against time sheets for seeing what directors, partners and employees do with their work time. I do have an issue with charging out clients according to how much work time is spent on them.

  • It ignores the value of the work done for the client; perhaps a lot more than some arbitrary charge-out rate.
  • It gives the client no certainty as to the bill they will receive, and
  • the client might believe that your people will string out the time to charge more than your business deserves.

Because you’re worth it

I believe that as far as practical and especially in professional services, your client deserves a fixed price. That price should reflect the value of what you are doing. The knowledge you are selling is worth a significant sum. It may be saving your client a large amount of money and the value of that is what the client is buying.

After all, how much does an iPhone cost to make? The answer is a small fraction of what it is sold for. The customer is buying the experience, comfort she is in safe hands, and the valuable and probably money-saving service you offer. This means you can pitch your price at a level that makes a good profit.

You deserve it, don’t you?

Enhanced by Zemanta