Candy Messer - How I've Simplified my Billing
What I've taken away so far is that there's a lot that I really never thought about, in creating fixed-price agreements. I was always thinking it'd be nice if I could get a monthly price that I would charge, so I wouldn't have to do these invoices by the hour.
One of my questions to Ron was, how would I create a flat rate price for someone who has fluctuating amount of work during the year? If it's a brand new client and I have no idea how much work it's really going to entail, how do I set that flat price?
Ron's recommendation to me was try to get a couple year's worth of information, so that I can determine an annual work load, that would help me better determine what a flat price would be. Based on the customer's cash flow, potentially allowing them to not pay during certain months and then pay during the other months, when they actually have more cash, so it's not every month that they necessarily pay, where it would be a problem for them.
I never thought about not billing someone for a couple of months and then billing them for the other months that they are busier. My thought was flat rate meant every month they're charged the same rate.
He wants me to start quoting price on an annual basis and then offering payment plans. Maybe the lowest plan is a 50 percent down and the rest paid over 12 months. Where another plan might be 25 percent down, but I never thought about quoting on an annual price, or offering different pricing structures, or charging customers based on their cash flow.
I think that I may have to shift even some of the customers that I'm going after now, because it's not going to be necessarily the one who wants a low monthly price. It's someone who's going to see the value in what we offer.
There's a lot that my eyes have been open to. It's just the beginning of a journey, that I know over the next six months I will implement and hopefully have a much more productive business, where we don't waste time on our own invoicing, but can use that time for the work that we need to do.