I run a consulting company for early stage startups. We help them build the foundation of their recruiting & HR functions, then guide them through hiring internal specialists and phase out. We typically take on long engagements (up to or over 12 months), so it's necessary to account for time off.
So far we've been squeezing in extra hours before and after time off to make it up, but it's not a sustainable approach. We need to rework it.
How do established firms to do this? Please share specific examples.
The most similar business model to ours is RPO (recruitment process outsourcing). We sit on each team and largely act as internal team members.
We work on retainer and bill monthly in advance for a pre-determined number of hours. For example, I'll send an invoice at the end of December for 160 hours to be completed in January. I do this each month for the duration of the contract.
If we get ahead or behind on hours we adjust the following the month's workload. Either way, monthly revenue remains the same.
This provides predictable cashflow, which is important for a small firm. We were okay with it in our startup phase, but it's not healthy for the longterm.
Is it common to say that within a multi-month contract, the total number of hours worked will be (let's say) = 35 hours per week x # of weeks - some predetermined, reasonable # of vacation days?
I'd like to avoid the scenario where someone takes a week off and we lose 10+% of that month's revenue.