Step · Reveal
The Hourly Trap
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Every hour you save by getting better at your work is an hour you no longer bill for. Hourly pricing penalizes the expertise you built.
What this reveals. One number: the annual revenue your hourly work costs you at your current rate and volume, given how much faster you deliver today than three years ago.
What it does not do. It does not tell you to switch pricing models. It documents the annual penalty on the expertise you already built.
What is your current hourly rate?
The rate you invoice clients for hourly work today. If you charge different rates for different clients, use your typical rate. Enter the number, not the range.
How many billable hours does a typical engagement take today?
The hours you actually invoice for a comparable engagement. Not the hours the client thought it would take.
How many hourly engagements do you deliver in a year?
Comparable engagements over the last twelve months. Round to the closest bucket.
How much faster do you deliver comparable work today than three years ago?
The efficiency gain that comes from experience, sharper judgment, better tools, and reused frameworks. If a job that used to take you 20 hours now takes 10, that is 50 percent faster.
What share of your work is billed hourly?
The rest is fixed-fee, retainer, or outcome-priced. The trap only applies to the hourly portion.
the annual revenue your efficiency has been giving back to the buyer
The number above is the annual penalty on the expertise you built. It compares your current hourly revenue against the revenue you would have collected at the same rate if you were still working at your three-years-ago pace.
The buyer received the same outcome. You delivered it faster. Your invoice measured the time. It did not measure the velocity.
Three scenarios from the same inputs:
Assumptions used: current hourly rate, hours per engagement, engagements per year, efficiency gain over three years, and share of work billed hourly, all inputs you selected. The penalty is a scenario built from those inputs. It is not a forecast, a valuation, or a compensation benchmark. It does not account for rate increases you have already made or changes in the mix of your work.
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This estimate compares what you bill by the hour today with what the same engagements would bill at the hours they took before the efficiency gain you entered, at the same rate. It assumes the same number of engagements and no change in rate. Faster delivery does not by itself mean revenue was lost.
If a statement of work is about to be signed, decide the billing structure before it is. Where the engagement is consequential and the fee basis is unsettled, Decision Desk™ can examine the evidence and prepare a documented position.
Bring one date to the Review: the signing date for the next statement of work. If it is not set, say so.
Discuss my next pricing decision
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Decision Guide
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