Value and Time
“One of the big challenges I find with value based pricing is what happens if a project doesn’t fit a specific timeframe. For example, if you charge daily and a project runs over or the scope expands, you’ll be compensated, but with value based pricing how would you reduce the risk of this happening? And how do you plan multiple projects at the same time, if the time needed on them could shift?”
Mike, you create with the buyer at the outset objectives, metrics, and value, as well as options, time frames, joint accountabilities. All of these should be in the proposal. Hence, the two of you have used your best judgement to frame the time needed for each option. If something causes the project to take longer, you simply spend more time (within reasonable limits) because your profit margin is so high, it doesn’t matter. You’re now equating an extra day with monetary loss which is a fallacy except if you’re actually billing by time units which I’ve established is crazy.
Thus, the risk is reduced by you and the buyer making evaluations and commitments, but even if it happens you’re still making a huge profit, so what difference does it make? As for multiple projects, you should never be working consecutively at any one client, never showing up daily. I’ve handled over 30 clients at a time through a combination of remote work, judicious on-site visits, and transferring a great deal of the work to the client.