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Comment by quietriot | Hacker News Reader

Consider working in the future on a pre-paid basis. I have had great success by charging clients [especially new ones] for "blocks" of hours. If your rate per hour is $100, consider selling your client a 5 hour block for, say, $450 - or 10h for $925. When you receive the check and it clears then get to work and keep going at your own pace till their "hours balance" goes to zero. Then ask for another check if they want you to continue on the project. They can buy more at any time. I keep track of time to the 1/10 hour. Tell them they can direct your efforts however they desire within the scope of what you are offering for a given rate. Offer greater discounts for larger block sizes. Unused hours expire or are fractionally reduced after 18 months... progress reports generated every 10 days or 10 hours used... generate your own policies.

Start with the cash. Saves many a headache billing/invoicing/etc.

I have sold weeks at a time. Accept credit cards.

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Example:

"""

I offer my services in blocks of prepaid hours.

Hours are utilized out of a block as they are applied to your business. All time is exclusive and timekeeping resolution is 0.1h. You may add additional hours to your account at any time or take your balance to zero. I offer blocks of other types as well (IT/Telephony, Media Production) and each is accounted for independently and may be used in any order you please. There is no charge for miles. I can be as self-contained or as interactive as your team desires. You, or anyone from your team, can dictate specific tasks at any time. You can file with the IRS as a simple 1099-MISC if we end up over $600.

Progress updates are generated at a minimum of every 10 hours used or 20 days passed as long as you maintain a positive balance > 1.0h and have utilization. Hours unused, after 10 months, decay by half each quarter year thereafter for four quarters then age out completely.

     Social/SEO Blocks
    Qty. (h) 	Rate ($)
      5           400
     10 	  725
     15 	  980
     20 	1,225
     25 	1,425
     30 	1,625
     35 	1,825
     40 	2,000
     45 	2,150
     50 	2,250
    à la carte 	   85

If you would like to proceed [direct them how to send a check or pay via CC or other method].

"""

I like this approach. Thanks for putting such a detailed methodology up here.

Glad to do it.

Use a spreadsheet to grow the discount of your hourly rates as the block sizes increase. Analyse mine. Encourage the purchase of larger blocks with larger savings per hour for your client and larger upfront checks for you. Build a range of what is acceptable to you from highest to lowest then spread them proportionally to the block size and manually round off the numbers to make them easy for humans to process.

À la carte hourly rate is your typical billable invoice rate plus an incremental premium. Set this higher to allow for, yet discourage, purchase of only one hour at a time for small projects or to allow them to buy enough time to finish off a project without buying time they don't want or need.

Yes these rates are very low. Make a different set and quote different block sizes for each type of job/skill/service.

Here's the thing, a client who doesn't intend to pay won't care about the discount, and discounting rates is a tell that the client doesn't need to pay you your full rates regardless. The problem isn't affordable rates, it's non-payment. In my experience, lower rates tend to correlate with non-payment because it allows the rationalization "He didn't expect to be paid everything he asked for anyway."

Not discounting and retainers as standard terms of service are filters for bad clients.

This is what we do, clients purchase blocks upfront, pay upfront. Any work we do is knocked off the block. It's a good system for adhoc work.

Do you use this for "from scratch" development or only for ongoing development?

I like to start with this for new [read: untrusted] clients or small one-off projects. It can work for ongoing projects or longer-term development as well. For your customer, buying custom software/web development, SEO, network security configuration, or server admin time becomes more like buying printer ink - a simple purchase. It is easy for a secretary or project manager to "buy" a project, administrator time, or just someone to call when something comes up that might otherwise not be funded or have payment denied if fiscal officer authorization to write a check is required. If the arrangement seems to be a deal-breaker for them I can make a traditional invoice scheme work (with rates in-line for the hassle of invoicing, payment delay of 15 days or more, and the chance of not getting paid at all).

("You may request a modification of the terms I provided or inquire how to best build an arrangement to suit your specific business process. More traditional billing schemes are also available.")

I've had a few blocks of setting up office phones and network storage for a client turn into a permanent part-time IT administrator employment offer. They decided to bring my services in-house rather than paying my block rates after they saw my work ethic and how well the system I developed fit into their organization.

I don't frame blocks as a "discount" but let potential and existing customers determine on their own that the prepaid and larger blocks are a better bang for their buck.

(Linux, {Free,Open}BSD, pfSense admin, and data recovery service inquiries --> cyrus ta cyrusyunker tod com)

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