I thought I’d get your attention first by talking about one of the most common models – the billable hours or prostitute business model.
What is the prostitute business model?
Well, it’s probably not what you think. This is one of the models I use myself and it doesn’t involve selling sex.
The prostitute business model is the one where you sell an hour of your time for a fee. It’s also called the billable hours model.
That time might be for business advice – you can buy a couple of hours of Julia time and I’ll talk to you about your business issues and help you make a decision, or develop some new skills.
The gas engineer I used to fix my boiler, my virtual assistant and many lawyers use this model. You pay an hourly rate, and they do something for you.
What’s good about the billable hours model?
The billable hours business model is great for its simplicity. Someone turns up at my office at 1 pm, we talk about what they need to resolve, and I send them a bill for however long they were here. Less the time I spent putting the kettle on and getting the caramel wafers out
What’s the downfall of the prostitute business model?
The main problem with the prostitute or billable hours business model is that you don’t have any recurring income. You’re just doing a job, and then it’s over. Maybe that client will come back for more, but maybe they won’t. You have to work all the time to get more clients in if the first ones are not going to come back.
It can also be difficult because people tend to go “oh, my god, £60 per hour, for fixing my boiler, I’m not paying that”.
Your clients compare your rates with what they earn in their proper job. Which even for people in good jobs is not £60 per hour, and they forget all about their holidays, sick pay and the fact that they get paid for all the time that they’re at the office, including putting the kettle on.
So you look expensive using the billable hours business model/prostitute model, even if you’re not actually charging that much
What else can I do?
When I get a business advice client using the prostitute business model, I often try to steer them away from it.
Maybe they can move to the recurring income business model. Or start developing products based on all their expertise. Sometimes we start thinking about the productivised services model. All these are coming up next.
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Much more, please
If this has got you thinking “That’s me, I’m a prostitute, with my billable hours model, always searching for the next client”, then maybe you need some help to transform your business into something which brings in more money and more regular money.