3 Steps to Double Your Consulting Fees

triple-consulting-fees

How would you like to increase your consulting income by 50%, 100% even 200% and more…interested?

There’s a very simple way to achieve this and I’m going to tell you how…

Increase your fees.

If you’re currently making an average of $15000 per consulting project, increase your fee to $25000, $40000 or even $80000.

Here are three guidelines for you to make this happen:

1. Charging too little. Many consultants I speak with in my coaching program are charging too little for the results they provide. If you are helping your clients improve sales by $250,000 annually, charging $5000 is too little. If you know you’re providing huge results for you clients and not charging enough – increase your fees right away. That will have a huge impact.

2. Provide greater value. Let’s say you’re currently providing a service to your clients for $20000 and it includes A and B. If you add more value by providing A, B, C and D, you can increase your price to $50000. The key here is that you can charge more if you’re creating more value. This is a very powerful approach. Continue Reading

Get Paid More

Get-Paid-More

Here’s a thought…

You get paid for the value you produce and deliver to the market.

Companies need to constantly improve their products because buyers are always looking for more value.

Have you looked at yourself as a product? You should.

Whether you’re actually selling a product or providing a service, YOU are a product.

The more valuable you make yourself the more you’ll get paid.

Your Best Investment

When you invest in yourself, sharpen your skills, hone your marketing – you become more value and can charge and earn more.

Ever seen a 20 year old outperform an ‘experienced’ 40 year old salesperson? It happens all the time when the 20 year old is hungrier for success and decides to invest in themselves.

The 40 year old thinks they know everything. Makes some cold calls and grumbles about how things have changed. Inside they’re starting to doubt their abilities. But they don’t do anything about it. Continue Reading

Why a 10% Drop in Consulting Fees Leaves You With 33% Less

Percentage-Drop-Consulting

Imagine offering a client a 10% discount to win the project only to find out you actually took a 33% hit. Ouch!

If you’re engaged in time based consulting work you may be surprised to learn that offering your buyer a modest discount can actually reduce your gross profit by a much greater margin.

I was reading Ori Weiner‘s book on Advanced Fee Negotiation the other day. And I found a great example that clearly illustrates how dangerous discounts can be.

This is an adapted summary of Ori’s explanation on page 26:

At first glance, this makes sense…

  • You’re a consultant that has just offering your client a 10% discount on your rate for the project.
  • You expect the project to be about 1000 hours at your rate of $500/hr.
  • If your costs on the project are $350, that leaves you with $150/hr profit (that’s a 30% gross margin).
  • Your total profit from this project would be $150,000.

Here comes the pain…

  • Your 10% discount would equal $50 off your regular rate.
  • That means your hourly rate drops to $450.
  • Your costs will remain the same ($350) unless you’ve negotiated otherwise (key point!).
  • That means your profit falls to $100/hr.
  • Your total profit is now down to $100,000 from $150,000.
  • That’s a decline of 33%, not the 10% you first bargained for! Continue Reading

5 Insights Into the Role of a Consultant

5-insights-into-consultants

A colleague and client, Andreas Dittrich in Germany attended an event where two professors and a typical client of his industry got to together to discuss the role of a consultant. Below I’ve adapted the key lessons Andreas shared with me in an email:

1. The three most important characteristics constituting a consultant’s brand are: first of all the value created for his client, followed by his visibility and reputation. Creating value is the central momentum from which everything else emanates.

You can strategically position your fees to remove or eliminate any doubt or hesitation a buyer may have in working with you.

2. Specialization is the essence of proper positioning. When asked why she (HR Manager) contracted a consultant the answer was a) the guy had good references b) he had stayed persistently “close to the ball” over a considerable period of time and – that above all – he was in a position deliver the “tailor-made suit” needed at that time.

3. How to find the right consultant? “Whenever we need a consultant for our business or a project, I call a colleague in the same industry and ask how he/she solved that problem and who supported them”. Referrals through a network are the most important source for consultancy contracts since they may minimize the risk of grabbing the wrong one, enhancing the chances of getting things done and solved. Continue Reading

What to Do When Your Client Asks You to Lower Your Consulting Fee?

Consulting-Fees-Down

First I should say that this request is rarer than you may think.

This may be the type of client that is unsure of herself and will look for any excuse to get out of a project, delay things and make your life unpleasant in general.

If you’ve done a good job of educating your ideal consulting client and have given them plenty of reasons to see the value that you can provide to solve their problem they’ll have few reasons to worry about your fee.

In many cases, but not all, the type of client that asks for a discount on your fee is the type of client you have to worry about for two reasons:

1) That you haven’t done a good enough job of demonstrating what value your client will receive – and that means that they won’t be fully committed to the project if they don’t believe their ROI will be significant.

2) This may be the type of client that is unsure of herself and will look for any excuse to get out of a project, delay things and make your life unpleasant in general.

That aside, if a genuine prospect asks you to lower your consulting fee, what should you do? Continue Reading

8 Online Accounting Softwares for Consultants

Online-Accounting-Software-Consultants-1

If you’re like most independent professionals and consultants, doing your accounting and preparing for tax time is about as exciting as watching grass grow.

Which means you’d rather be doing almost anything else because not only is it time consuming it’s also tedious.

In the Consulting Success System I share my approach to managing all of this and stress the importance of working with an accountant.

Yet even with an accountant, you still need to have a strong grasp of your own financials throughout the year…rather than waiting until the year has ended and trying to play catch up.

Luckily there are several software programs that make this process more pleasant. Including some that practically automate it for you.

Xero

Xerox

Xero offers accounting in the cloud so you can access all of your financial information from anywhere. They also provide a mobile app and loads of features. Pricing starts at $19/mo

FreshBooks

FreshBooks

FreshBooks made it’s name as an online invoicing tool. Since its start it’s made its system more robust so that it can practically function as your total accounting solution. It’s also cloud based, offers a small free package and paid plans start from $20/mo Continue Reading

Consulting Fees Positioning Play

Service businesses tend to send an invoice for their services after they’ve put in the time and work.

Would you rather get paid up front or have to wait 15, 30 or 90 days to see the cash in your bank?

This is what your average client has come to expect. They pay their electrician, plumber and real estate agent in the same way.

That same client, however, has no problem paying up front for their bread, detergent or washing machine.

Ask yourself: Would you rather get paid upfront or have to wait 15, 30 or 90 days to see the cash in your bank?

Consultants that get paid before their work begins enjoy better cash flow, less stress…and as a result, typically perform better work.

There are few situations where your client can’t pay you upfront. They simply don’t because you haven’t approached the subject in the right way.

So my friend, what will it be? Where do you stand? Do you currently get paid upfront or wait to see the money?

Some food for thought…

If you want the ultimate guide to Consulting Fees check out our Consulting Fees & Pricing Guide.

 

10 Accounting Tips for Consultants, Things You Need to Know

If you’re going into business as a consultant, you’re going to be responsible for managing your own cash flow and keeping your business afloat.  In a way this is like having two jobs at once, unless you contract your accounting out to a professional (in other words, hire a consultant for your consulting firm!).

Repeat clients and long-term clients are going to be your bread and butter, but never come to rely too much on any one client.

Keeping track of your budget is absolutely critical if you’re going to be profitable, which in a way makes accounting just as important as whatever it is you actually do to make money.  If you protect your earnings and do your job, your profits should take care of themselves.  Here are some tips to get you going on the right path

  1. Before you start your consultancy business, make sure you have a basic budget planned.  You should know exactly what your monthly expenses are going to be both for your business and for your personal needs.  If you’re a sole proprietor, the IRS will not treat your grocery bill as a business expense, but you can’t work if you can’t eat, so you need to treat it as one.  You will need to make enough money each month to compensate for all business and personal expenses to come out profitably.
  2. Learn about taxes starting from Day 1.  Many business owners are surprised come tax day when they owe a lot more than they thought they would.  Figure out how to calculate your quarterly taxes before you start your business, and consider taxes yet another business expense to calculate into your budget.
  3. Don’t wait to do your taxes.  You are going to owe quarterly installments to the IRS and if you pay them late you will pay a penalty.  If your income varies a great deal throughout the year, calculate your taxes each month so that you can pay the appropriate amount when it is due each quarter—and be prepared to do extra paperwork at the end of the year.
  4. If you have employees, remit your payroll taxes when they are due as well in order to avoid more penalties—or worse.
  5. Don’t put all your eggs in one basket.  Repeat clients and long-term clients are going to be your bread and butter, but never come to rely too much on any one client.  All good things can fall through eventually and things change constantly, so diversify your investments, including your client accounts. Continue Reading

Daily Rates for Consultants And What You Need To Know

I spoke with a consultant the other day, we’ll call him Terry. He had a question for me, “what should my daily consulting rate be? I’m a manufacturing consultant.”

My answer, “I can’t tell you.”

Terry: “Why not?!”

Me: “Because I don’t know.”

Terry: “What? Really? Why don’t you know? Isn’t there a standard rate?”

Me: Well Terry, there is a standard rate. A standard rate for people that don’t know what they are doing. And a standard consulting fee for those that do know what they are doing. Which one are you? Tell me more about you and your business and then we can get into more details…”

When the problem you are solving is causing a lot of problems for the client, and if your solution is valuable you can and should be setting your rate using value-based fees.

Terry went on to tell me how he’d been in the manufacturing industry for 20 years. He had worked with some of the top companies. And now, he was going out on his own and wanted to know what to charge.

From what Terry told me it was clear he could definitely help the companies he was going after.

So there wasn’t a question of whether a need existed…

…Whether he was solving a problem that existed…

There definitely was.

But I still couldn’t tell Terry what he wanted to know.

Actually, I should clarify. I could offer him a range of what consultants charge and go on with my day, but I didn’t feel comfortable doing that.

Here’s why… Continue Reading

Consulting Proposal & Agreement Guide: Updated

In addition to the Consulting Proposal templates provided in the Consulting Proposal and Agreement Guide, many people asked if I could also include a more standard Consulting Agreement.

You know I value your feedback. So I gave this some thought and decided to include a template for a Traditional Consulting Agreement.

This is a 3 page agreement template that you can quickly and easily update in Microsoft Word or other word processing program…and start using right away.

I still recommend using one of the other 2 proposal and agreement templates – as I’ve found they add more value to the consulting project and often lead to higher paid engagements.

However, I think many of you will find having this new agreement as another option to be helpful.

Starting today, each purchase of the Consulting Proposal & Agreement Guide will automatically include the new agreement template.

You can get your copy here: Consulting Proposal & Agreement Guide

PS. These proposal templates have been used to generate millions of dollars of consulting sales. If you’re new to consulting or are looking to improve on your current proposal process to win more business, I think you’ll find a great deal of value in this. Details here…

Close Download your FREE Consulting Resources

Get our Consultants Toolkit with marketing template and calendar, consulting strategies, productivity tips and more for FREE.

WHERE SHOULD WE EMAIL YOUR CONSULTANTS TOOLKIT?

* We respect privacy and never send junk mail