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Every now and then, something that seems like it should have been blindingly obvious forever hits me like a an uppercut to the jaw. Today’s bolt from the blue:

A $1500 consulting project requires as much client management and administrative time as a $5000 project.

I’ve been aware of this for a long time, but I’ve always thought of it as a problem rather than an axiom. I’ve frequently attributed it to my failure to accurately estimate the scope of a piece of work (I’ve certainly failed at that plenty of times) or to “difficult” clients. All of a sudden, I see that it’s just the way things are. When I start a project with a new client, time is required to build mutual trust and establish lines of communication, and attempts to short-circuit that process lead to frustration and dissatisfied clients.

(Perversely, it may even take slightly less time to gear up bigger contracts, because clients who have a larger financial committment may start with a higher valuation of my skills and judgment.)

I’ve always been uncomfortable billing for time that doesn’t directly advance project goals. That makes it tricky to account for time that indirectly advances project goals. Talking about the Red Sox or the weather doesn’t get web pages built, even though it makes web page building go more smoothly. And to the extent it stops me from billing directly, it’s a real business cost.

So it seems to me that there are two viable choices: one is to adopt a policy of strictly billing actual time, even for a ten minute email or phone call (which I suspect people would balk at), and the other is to use a higher base labor rate for smaller pieces of work. Either approach would effectively eliminate the $1500 project.

This is a painful realization, because the core focus of my web consulting practice was supposed to be small businesses and non profit organizations. I still think this market is underserved. Small organizations often can’t afford either a person on staff or the services of a big design firm. But they need a more professional presence than a one-size-fits-none template. I also think they can benefit from more information architecture and user experience guidance than the stereotypical graphic design grad student brings to the table.

The point is moot for the moment — I’m happily full-time employed and not accepting new freelance projects. But should circumstances change, I need to fundamentally rethink my entire business model.

(Incidentally: I think this argument is fairly scalable. I think I put as much work into the care and feeding of 30- and 50-thousand dollar projects as my more experienced peers put into quarter million dollar contracts. Of course, my EVP was fond of recounting how she grew a couple of 20-thousand dollar projects into one of the company’s biggest revenue streams — contracts that are small by the standards of a big company are more likely to lead to substantial follow-on work than a one-off web site redesign.)

(Less incidentally: Some folks have tried to gently lead me toward this epiphany in the past, and I’ve been resistant. I can be a stubborn cuss sometimes. So if you think you’re in a position to say “I told you so,” you’re probably right. Go for it.)

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