100 Thoughts on Pricing: #80
Optimizing for T&Ms: a common reason hourly contracting is chosen over fixed price is heavy use of hourly based subcontractors*. Ensure:
caps on your budget are passed through to your subcontractors
their hourly rates are fixed in place for the duration of the contract
they are paid monthly after the end of the month
a healthy margin sits between their rate to you and your rate to your client.
Remember, YOU did the hard business development work of landing the project with the client, so YOU- not your subs- should reap the vast majority of the reward.
*Note- hourly based subcontracting does 𝒏𝒐𝒕 mean you must in turn charge your client on an hourly basis, but I'll save that for separate discussion.