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Unlock the secret to growing your business beyond hourly billing. Learn how to multiply your earnings and free up time. [[{“value”:”
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According to the U.S. Chamber of Commerce, there are about 33 million businesses in the United States and 99.9% of them are small businesses. And, of those, the vast majority are one-person businesses.
Typically, solopreneurs bill by the hour. Lots of small businesses do the same — plumbing outfits, law firms, dentists, you name it. The problem with billing by the hour is that it limits how big your business (and bank account balance) can grow. There are only so many hours in a day and you only have two hands. Entrepreneurs have a maxim:
You will never get rich billing by the hour.
Let’s break it down: If your goal is to earn $300,000 next year, you’ll need to bring in $25,000 per month, or $6,250 a week. And let’s say you can bill for about six hours each day (which actually requires working at least eight hours). To hit $6,250 a week, you’d need to charge around $208 per hour.
But here’s the catch: Not everyone can charge $208 an hour. And even if you can, you probably had to work incredibly hard to get there. Is it possible? Yes. But for most small folks, it’s not sustainable.
Better options: Project-based billing and gig entrepreneurship
Consider these moves to grow your business.
Project billing (with help)
Switching to project-based billing can be a game-changer. Larger projects that require gig workers help often lead to bigger paydays, better work-life balance, and happier clients. Managing a few big projects is also easier than juggling numerous smaller, lower-paying jobs.
Financially, it’s smarter too. If you can complete a project faster than expected, the difference between the project fee and the time spent is pure profit.
And this is key: Project-based billing allows you to bring in extra help, and that’s where the magic happens. You can hire gig workers, pay them, say, $50 per hour, and charge your client $75 per hour for their services (all built into the project price). This creates two key benefits:
You earn $25 per hour for each contractor without lifting a finger.You work less but make more.
Now, that’s a sweet deal.
Become an entrepreneur
Successful entrepreneurs find ways to make money even when they’re not working. How? By having a team that earns money for them.
Take a law firm, for example. It operates like a legal pyramid scheme (and I say this as a former lawyer). Young associates are billed out at a lower hourly rate than the partners. This setup is beneficial for both clients, who pay less, and partners, who profit more (but maybe not for the overworked associates!).
Let’s do some math again: If a law firm bills out associates at $300 an hour but pays them the equivalent of $150 an hour, with $50 an hour in overhead, the firm makes $100 an hour in profit for every hour an associate works. Multiply that by 10 associates billing five hours a day, and the firm earns $5,000 in profit daily, $25,000 weekly, or $100,000 monthly. Over a year, those 10 associates generate more than $1 million in profits for the partnership.
Those associates are profit centers — just like your subcontractors can be.
The secret to small business riches
To truly elevate your small business, aim to become an entrepreneur in the fullest sense. Bid on larger projects and take on more than one at a time. Whether you bill by the hour or the project, the goal is the same: build a team of gig subcontractors who can generate income for you, even while you sleep.
By doing so, you multiply your earnings and free up your time, leading to exponential growth in your business and income.
That’s the secret: Become a rainmaker and let others do the work.
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