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I’m a big fan of value billing.  This is where I bill for a project.  You know what you’re going to pay and I know what you’re going to pay.  My incentive with value billing is to produce the best work I can in the least amount of time. 

You get to decide whether the price I’m proposing is fair and if you’re going to get an adequate return on your investment.  Value billing allows you know the price up front.  You won’t have to wonder how many hours I’m spending or whether I’m learning at your expense.

Why value billing works

Value billing works best for both parties when your provider is an expert in what they’re providing.  I know that when I’ve done a similar project several times, I know approximately how long it’s going to take.  I know how much time I’ve invested learning and I know how pro-rate my learning time in my fixed price bill.

If your project happens to be something I haven’t done before I have two choices: I can decide to learn what you want and not charge you the full cost of my learning or I can refer you to an expert.  In most cases I’ll refer you to an expert. 

When I first starting developing my expertise in the niches I serve I spent a lot of time learning on my dime.  This was an advantage to those I worked with.  They weren’t paying me to learn.  They were paying me to produce a result.

Niches and value billing, a match made in heaven

When your provider provides you value billing and is a niche specialist you get the best of both worlds.  You aren’t being charged to learn because your provider already is an expert.  You are getting a result that’s produced quickly because your niche expert already has spent time and effort to learn what you want.

You might end up paying a little bit more, but isn’t your outcome what you’re after?  The niche expert provides you with years of experience and in many cases years of education on your issue as well. 

As a provider being a niche provider means you understand the issues your client is having.  As a client, using a niche provider allows you to get expertise from someone who sees your problem on a regular basis. 

Would you rather have a surgeon who’s done an operation hundreds of times or someone who’s just learning?

This is where niche expertise is most appreciated.  I know that if I’m getting a surgical procedure I don’t want someone just learning.  I want the surgeon who has successfully done the procedure hundreds of times. 

That surgeon is likely to charge a higher fee.  He or she will likely spend less time than a newbie doing the same procedure.  They’ll get a higher hourly fee.  If the surgery is successful and you get the outcome you want, do you really care?  I know I wouldn’t.

I recommend that you look for that provider who is a niche expert and charges a value based project fee.  At the end of the day you’re likely to be happier and get the outcome that you really want.

We have written a case study on the 3 Stages of Your Business.  You’ll find that in Stage 1 you have to concentrate very hard on what you do.  Stage 2 businesses are those that develop and take advantage of the niche they serve.  To learn how you can move the 3 stages of a business, click on the button below.

Securities and Investment Advisory Services offered through NFP Securities, Inc. (NFPSI), Member FINRA/SIPC. Stage 2 Planning Partners and NFPSI are not affiliated.

This article is published for residents of the United States only.  Registered Representatives and Investment Adviser Representatives of NFP Securities, Inc. may only conduct business with residents of the states and jurisdictions in which they are properly registered.  Therefore, a response to a request for information may be delayed.  Not all of the products and services referenced on this site are available in every state and through every representative or advisor listed.

Topics: business coaching, value, niche

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