There is one very simple, straightforward and easy way to make more money from consulting. You only need to raise your rates.
Some find the idea horrific. “Won’t I scare my client away if I ask them for more money?” is the most common concern. It’s this mental block that holds back most individual from increasing their consulting fees. And yet it shouldn’t.
You may lose a few clients by charging more. But you’ll make so much more with your other clients and the new ones you take on that in the end you’re bank account will sit fatter.
If you take it one step further you can find creative ways to keep your clients from jumping ship when you raise your fees.
If your client can’t afford your new rate you can offer to spend an hour or two less a week (for example) at your new fee. That way they still get to keep you and you keep them. It’s a compromise that often works.
When increasing your fees the key is to be prepared. You don’t just want to show up and say “Just so you know, next week my hourly rate is $150 an hour and not the old $95 an hour.” Be sure to explain why you are raising your fees.
Consultants usually use one of the following reasons:
- You’ve completed a new certification
- You know more than you did last year
- You’ve added an employee
- Fees you are charged have increased
- Demand for your services has gone through the roof.
Personally, I feel the last one blows the rest out of the water. Whatever you’re saying, it all really comes down to increasing your skills and knowledge and by de facto you’re services are more attractive to more people. And in order to keep working with your client and grow your business you have had to raise fees for all clients.
You should be raising your fees every year or two at the minimum. If this idea is hard for you to swallow, take some time to think it through. After all, you have to be comfortable initiating it. If you ask any successful individual about raising their consulting rates they’ll all agree that they do it and that it’s a must if you want to increase revenues and the profitability of your business model.