I guess the title is a bit misleading, a consulting retainer agreement with your client may or may not be the best way to go. It depends on many factors. But that’s what I’m going to explain…
One of the biggest challenges you’ll face as a consultant, especially in the early days, is making your income stable.
Now, I don’t mean that you get a check every 2 weeks as a typical employer would provide, but rather that you have a continuous flow of work.
When you do hourly or project work, it often really is just that. You go to work, tackle whatever issue it is you’re helping with, and once you’re finished, it’s over. You send the invoice, you get paid, and you don’t hear from that client again until they need more work. Sounds good, right? Sure, it’s standard practice.
The big problem with this is…
That you need to have an ever increasing pool of clients so that when one project is over you can go right to the next one. Some clients will only have a one time project or they’ll drop off for whatever reason – so you need to be continuously adding to your client base.
Why a consulting retainer makes this better
When you set up a retainer agreement with your client, essentially you work with them for x amount of hours each month and bill them monthly. It really is as straightforward as that.
Here’s what you need to do to make this all work:
1. You must have a plan for what will be accomplished each month. Or a clearly defined set of deliverables that both you and the client have agreed on.
2. Each week or at minimum at each meeting with the client you should show them what has been achieved or completed prior to the meeting. That way they can see the progress and feel the momentum.
3. Always plan ahead. Again at each meeting, don’t just review what you’ve completed. Review with your client what you plan to accomplish next.
Depending on your client how formal these plans should be will vary. I’ve had some clients that require a status of the project every two weeks to one month with figures and data. Others just want to talk about it.
4. Deliver. This one’s critical. I know it sounds stupid but the whole reason consulting retainers work are because you can make things happen and your client is willing to pay you on an ongoing basis to continue the work.
The next time you’re showing your client your fees or sending a proposal or bid for a project, be sure to build in an option for monthly retainer work.
The consulting retainer set up works better for both you and your client. You get the stability of having a few clients that provide you with steady work and income. And because you don’t have to manage and chase down as many clients you can focus in better on your clients business, give them more of your time and deliver better results.
So there you have it. The consulting retainer. It does work, I’ve used it for many years and it’s my preferred way to work. Have any thoughts or questions? Enter them in the comments area below or contact us through our contact page.