Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.

By Alyssa Royse

As someone who is both looking for consulting gigs andlooking to hire consultants, I’ve found myself thinking about price a lot. Notin terms of the number itself, but in terms of how it relates to what is beingpurchased. I recently put together a very informal proposal for someone thatmight be great to work with. When I ran it by friends before sending it off, Iwas told, “yah, it looks great, but nowhere in there does it say how many hoursyou’ll be spending.” Conversely, I put a gig out to bid to a few consultantsand they responded with their hourly rate.
 
I’m neither buying nor selling time. I am buying and sellinga product.
 
Imagine walking down to your local bakery and buying a loafof bread on Monday, for $3. Then you go back on Tuesday and buy the exact sameloaf of bread for $7, because the baker had a bad day, wasn’t on the ball andit took him twice as long to make the bread. Wednesday that loaf costs $4, justbecause the yeast took longer to rise because it was colder outside. Mostpeople would think that is ridiculous, after all, the product is the same.
 
Yet, consultants routinely charge by the hour. The sameproduct could take one person 10 hours to do and another one 25 hours.Suddenly, hourly rates don’t make much sense.
 
Regardless of which side of the equation you are on, it isimportant to be very clear about what is being purchased.
 
Are you renting brain time?
Part of what I was proposing to do with this potentialclient was “simply” assess their communications needs based on current andfuture growth. This would involve a lot of discovery and digging and meetingand thinking. That really boils down to renting my brain, and in that case, anhourly rate makes sense.
 
In such a scenario, it is vital to be as clear as possibleabout both the starting point and the end point. However, it is fairly openended, and would be fair to say, “I’d expect anywhere between X and X2 hours.”Or, “We can really only allocate a maximum of X budget dollars to this process.”
 
Are you buying a deliverable product?
Conversely, I am looking for someone to do basic design of abeta, consumer facing content site. We have a logo, detailed specs, and clearexpectations. I am looking to have a site designed and built, I know exactlywhat the product is that I am buying. Yet, when put out to bid, peopleresponded with their hourly rates.
 
That means nothing to me because I neither know nor care howfast you work, I’m buying a product – a loaf of bread.  I want a price for the finished product, not for the process. (Which is also how I bid those. If I’m writing a press release for someone, I charge for the release, not by the hour.)
 
In this scenario, it is vitally important that both partiesare absolutely explicit in the expectations and requirements of the product.Both parties, in turn, are held to those specs. So if the client suddenly addsto it, the consultant can say, “sure, but that will cost you X extra.”Likewise, the client can say, “this looks great, but X was in the spec that youagreed to, and I don’t see it here.”
 
As a consultant, you are responsible for how you manage yourtime. When you look at the scope of a project, it is up to you to bid realisticallybased on how you work, and how that relates to the market value of yourdeliverable product. As a client, you are responsible for being very clear about what you expect so that you don’t suffocate a consultant in scope-creep.
 
Some of us are fast, and some of us are slow.But the freedom and responsibility to know what you need, what you can do andwhat it is worth is what makes this work. Consultants are a vital resource inthe startup world, but at the end of the day, it is their work product that we are purchasing, not the consultant themselves.
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Alyssa Royse communicates. It’s better when she does it for other people, so that her friends don’t get overly-communicated-with. Explore the inner workings of her mind on her blog, which will also tell you how to find her if you want to work with her, hourly or otherwise. (It takes about 6 hours to make soft-pretzels, in case you were wondering, but a lot of that is rising time, and is very dependent on the mood of the sourdough starter.)

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