Stop Renting Your Expertise, Start Providing Results

Building a more valuable company isn’t about selling your time – it’s about offering the results your clients crave. For businesses striving for growth, the constraints of hourly billing can feel like shackles. Does that mean you should completely abandon time-tracking? Not quite. But, as one might say, it’s high time to rethink this model! (Pun intended, but the topic is as serious as a Monday morning meeting.)

1. Why Selling Time Limits Your Growth

Hourly or daily billing means customers are essentially renting your time rather than purchasing a solution, a scenario that’s about as efficient as trying to fit an elephant in an elevator. Here’s why:

Lack of Leverage: To grow, your only options are working more hours or hiring more people. Fast growth becomes as mythical as a creature from a Tolkien novel.
Diminished Growth Potential: This is one of the eight factors investors and acquirers care about. They want a racehorse, not a plodding mule.

Case Study: The Slow Burn of Growth

According to Forbes, growth is often impeded by selling time, and it can be seen in many service-based businesses. A study from Bain & Company shows a correlation between alternative billing models and growth acceleration.

2. Customer Dissatisfaction and Competition Risks

Unhappy Customers: Hourly billing can lead to dissatisfaction – it’s like inviting your customers to a banquet and then serving them TV dinners.
Commoditization: You become just another time-seller. That’s like being a snowflake in a blizzard – no one notices you.

Case Study: Unhappy Customers in the Consulting Industry

The dissatisfaction stemming from hourly billing has been documented in the consulting industry. A Harvard Business Review article illustrates how alternative pricing strategies can align with customer needs.

3. The Transformation of Likeable Media

Carrie and Dave Kerpen discovered the same challenges in their social media agency, Likeable Media, back in 2006.

Realization of Limitations: Selling time was as effective as a screen door on a submarine. The solution? A Content Credit System.

The Content Credit System

Transparency: It’s as clear as a window cleaned by a professional squeegee artist. Credits for content, simple as that.
Recurring Revenue and Improved Cash Flow: Like finding a perpetual motion machine in the world of business.
Team Growth: This enabled the Kerpens to build a team without selling their time.

Case Study: Likeable Media’s Success

By 2020, Likeable was flourishing, with over 50 full-time employees, and it was acquired by 10Pearls for a premium of 8.5 times EBITDA. Full details can be found in this Business Wire report.

Conclusion: Start Selling Results

Let’s be honest: Selling time is so 2006. If your goal is to cultivate a valuable company, sow the seeds of results. It might take time and hard work, but as they say, Rome wasn’t built in a day (even though they probably charged by the hour).