It was so incredibly helpful to have a practical example for how you set up the price - so many of these youtube videos stress how important it is to price by value, and I agree, but never show how int he end they practically decide on a price!
Value pricing in my mind is largely BS. Clients are not stupid. I've hired a lot of consultants over the years, and only once did I pay based on 'value pricing'. This guy was literally the one person in the country that could do what I needed. Like an industry icon. And his work would guarantee me a saving of $180,000. Cash in hand. So $20,000 for one hour work was a good deal. 99.999999% of consultants are not in that league but many try to act like they are 🙂
@@ConsultingBusinessSchool I agree - I think you do need to look at what sort of value you bring to the client, but it needs to be priced reasonably and rooted by practical parameters.
@@ConsultingBusinessSchool Thanks rob for the message. You have already provided much value in this channel that helps budding consultants like me. Maybe you can do a monthly Webinar to share your experiences that will be really helpful.
A few things (and I speak as an old hand at consulting): - The holiday allowance at 10 days looks very lean! In the UK we'd allow 8 stat holidays + 25 additional days = 33. - What about illness? You need to be realistic on this. Most people are out of action about 5 days / year for colds, coughs etc. - What about professional development? You need to allow some time for keeping your skills and knowledge base up to speed, say 10 days. - Finally, and most importantly, he doesn't say where he's got his $1,600 day rate from!
Thanks for the feedback, I''ll explain. This is just a guide on the process of working out fees, you numbers will vary. In Australia for example (as I mention) we allow at least 20 days leave. In other countries it is 10. Build in whatever days you like. I usually add 10 sick days for example. You'll notice I only work on 65% billable days out of the total available. This is key and allows a bit of slack for other things. The $1,600 is an example of a day rate. It's an old table. You can also use a table like this, to work backwards, to establish that day rate. For example, I want to earn $200,000 / year. I have 260 available days, take out 20 for holidays,, 10 sick days, 20 professional develop etc etc. Maybe you are left with 160 days available for billing. Assume only 65% will be billable days. = 96 billable days. You need to charge a day rate of $2,083.
Hi Mr, Thanks for your education. May you kindly think about making the videos about introduction and overview of the industry and everything which is related to how to launch the consulting firm, how to compete in the marketplace, how to charge clients in so many different ways, how to know what's the right fee based on the value... I mean the basics are very important so just give us an amazing tour in the industry in every aspect Thank you so much All the best Mr,
I use an hourly rate when working offsite from my home, then a daily rate when onsite at customer. My monthly invoice is broken out into weeks and I show the major activities and outputs with associated hours for each week - just short bullet points. I charge for travel expenses but not for my time while travelling to the client - 10+ hours - but wonder if i should be?
Hey Rob! Thank you so much for taking the time to share your knowledge, finding it very beneficial (have just gone out on my own!). Bit a specific question in terms of what to charge. I am currently doing compliance consulting with Disability Services Providers - ensuring that their services are within NDIS (disability funding body) guidelines, regulations, etc. I'm finding it to be a regular occurrence that heartstrings are often pulled on due to the field I consult in. I often get statements such as "we are not for profit, what discounts can you offer us" (as an example). What would be your advice in negotiating rates in these circumstances? Should rates be negotiable or should I set clear boundaries early on? I am currently demonstrating the cost variance of how much it would cost them to employ someone in-house to do this work and showing how much more affordable it is to have a consultant complete ad hoc work - This is hit and miss and the cost is hyper focused on, while the value of what I offer is often put to the side. Any advice?
This is very common. My view is that there are non profits, and there are non profits. Many are huge organisations, with massive marketing budgets and nice salaries, where only about 30% of their income is used for whatever worthy cause they pursue. At the other end of the scale, are organisations that are run mainly by volunteers. You can't be discounting all your work, if this is your core sector. But maybe you can discount a bit for the ones that are obviously short on funds. I do that. I also discount fees sometimes for smaller businesses based in developing economies.
Just another thought...........Offer a benefit guarantee! Not many consultants do it. I wonder why? Maybe they are not confident about the results they deliver?
Sure, I've consulted to quite a few non-profits. I suppose there are 'degrees' of non profits. Some of the very large ones have big teams on salaries, huge marketing budgets and the like. I would tend to treat these just the same as any other client. Smaller ones, who might not be able to afford regular consulting fees, I might help at a discount if it was a worthy cause that resonated with me.
It's a super worth information I have one doubt how do big consulting clients charge 2m and 1m for fixed fees in project? and what is the cost of 6 members involved with an consulting project? can u explain me
We've had consulting projects over $1millon. It depends on the size of the team, the experience level, the duration of the project. Many factors. With that size of project you need to make sure you deliver outstanding results!
Hey Rob, I just want to know that is consultant as a middleman service to construction companies like I help them to win government contracts ? I can be a middleman for government contracts, get a precentage?
Maybe try a different browser? I just tested it and it works fine. Some countries might be blocked by our site security. What country are you trying to access from?
Hello , I want to know for someone who's consulting for one of the 15 biggest companies in the world on a call of tenders in his country , and providing Infos from highly ranked personel thanks to his connections , what is the daily 'rate' that he puts on his contract ?
Sorry, I'm not sure I fully understand the question. You are helping this Top 15 company with the tendering process? Or you are participating in the tender? Regardless, the daily rate comes down to a few things. (1) The value you deliver. (2) Your reputation and track record in delivering results specific to the client need. (3) To a degree, your 'recognised' standing in the industry as a person who can deliver. Don't fall into the trap of thinking that a Top 15 company will just pay much higher fees. They know how to hire consultants and what the market rates are. It's about your ability to deliver something that others can't. As an example, about 20 years ago I paid a consultant $20,000 for one day of work. It might have taken him a half day. But that consultant was market the leader in a very specific field, had decades of experience solving this specific problem, and was likely the only one in the country who could do it. His work saved me at least 10 x his fee. My point? High fees come with an outstanding ability to get a very hard result, time and time again.
Gosh! I came across your content a week ago! This is gold! Please never, ever take this content down! 😅 (at least for the next 12 months 😉😅)
Glad you enjoy it!
It was so incredibly helpful to have a practical example for how you set up the price - so many of these youtube videos stress how important it is to price by value, and I agree, but never show how int he end they practically decide on a price!
Value pricing in my mind is largely BS. Clients are not stupid. I've hired a lot of consultants over the years, and only once did I pay based on 'value pricing'. This guy was literally the one person in the country that could do what I needed. Like an industry icon. And his work would guarantee me a saving of $180,000. Cash in hand. So $20,000 for one hour work was a good deal. 99.999999% of consultants are not in that league but many try to act like they are 🙂
@@ConsultingBusinessSchool I agree - I think you do need to look at what sort of value you bring to the client, but it needs to be priced reasonably and rooted by practical parameters.
Best video on youtube about the pricing. Love your work, as it is really helping the new consultants in the market.
Glad you find the videos useful. Sadly my 'day job' means I can't add new ones very often.
@@ConsultingBusinessSchool Thanks rob for the message. You have already provided much value in this channel that helps budding consultants like me. Maybe you can do a monthly Webinar to share your experiences that will be really helpful.
I like the cost recovery tool! This was what I was thinking I needed to do, but this hits it in the head and fully defines it!
Glad it was helpful.
A few things (and I speak as an old hand at consulting):
- The holiday allowance at 10 days looks very lean! In the UK we'd allow 8 stat holidays + 25 additional days = 33.
- What about illness? You need to be realistic on this. Most people are out of action about 5 days / year for colds, coughs etc.
- What about professional development? You need to allow some time for keeping your skills and knowledge base up to speed, say 10 days.
- Finally, and most importantly, he doesn't say where he's got his $1,600 day rate from!
Thanks for the feedback, I''ll explain.
This is just a guide on the process of working out fees, you numbers will vary. In Australia for example (as I mention) we allow at least 20 days leave. In other countries it is 10.
Build in whatever days you like. I usually add 10 sick days for example.
You'll notice I only work on 65% billable days out of the total available. This is key and allows a bit of slack for other things.
The $1,600 is an example of a day rate. It's an old table.
You can also use a table like this, to work backwards, to establish that day rate. For example, I want to earn $200,000 / year. I have 260 available days, take out 20 for holidays,, 10 sick days, 20 professional develop etc etc. Maybe you are left with 160 days available for billing. Assume only 65% will be billable days. = 96 billable days. You need to charge a day rate of $2,083.
Great Video Rob! Thanks!!
My pleasure
Hi Rob! Thank you for all the tips! Big fan and follower. Quick question, where can I download the 7 steps guide? Thank you.
You can grab the Guide here: www.consultingbusinessschool.com/
I thank you so much for this channel! I'm in the development stage and would love to download that printout but couldn't find it
You should find it here: www.consultingbusinessschool.com/
thank you! @@ConsultingBusinessSchool
Hi Mr,
Thanks for your education.
May you kindly think about making the videos about introduction and overview of the industry and everything which is related to how to launch the consulting firm, how to compete in the marketplace, how to charge clients in so many different ways, how to know what's the right fee based on the value...
I mean the basics are very important so just give us an amazing tour in the industry in every aspect
Thank you so much
All the best Mr,
you should find all that covered on other videos on this channel.
I use an hourly rate when working offsite from my home, then a daily rate when onsite at customer.
My monthly invoice is broken out into weeks and I show the major activities and outputs with associated hours for each week - just short bullet points.
I charge for travel expenses but not for my time while travelling to the client - 10+ hours - but wonder if i should be?
Personally I don't charge for travel time, even for Overseas travel.
Hey Rob! Thank you so much for taking the time to share your knowledge, finding it very beneficial (have just gone out on my own!).
Bit a specific question in terms of what to charge. I am currently doing compliance consulting with Disability Services Providers - ensuring that their services are within NDIS (disability funding body) guidelines, regulations, etc. I'm finding it to be a regular occurrence that heartstrings are often pulled on due to the field I consult in. I often get statements such as "we are not for profit, what discounts can you offer us" (as an example). What would be your advice in negotiating rates in these circumstances? Should rates be negotiable or should I set clear boundaries early on?
I am currently demonstrating the cost variance of how much it would cost them to employ someone in-house to do this work and showing how much more affordable it is to have a consultant complete ad hoc work - This is hit and miss and the cost is hyper focused on, while the value of what I offer is often put to the side.
Any advice?
This is very common. My view is that there are non profits, and there are non profits. Many are huge organisations, with massive marketing budgets and nice salaries, where only about 30% of their income is used for whatever worthy cause they pursue. At the other end of the scale, are organisations that are run mainly by volunteers. You can't be discounting all your work, if this is your core sector. But maybe you can discount a bit for the ones that are obviously short on funds. I do that. I also discount fees sometimes for smaller businesses based in developing economies.
Just another thought...........Offer a benefit guarantee! Not many consultants do it. I wonder why? Maybe they are not confident about the results they deliver?
Good video.
Glad you enjoyed it
How about consulting for non-profit organizations? Any advice?
Sure, I've consulted to quite a few non-profits. I suppose there are 'degrees' of non profits. Some of the very large ones have big teams on salaries, huge marketing budgets and the like. I would tend to treat these just the same as any other client. Smaller ones, who might not be able to afford regular consulting fees, I might help at a discount if it was a worthy cause that resonated with me.
Hi Rob can I get the link to get the e document? I am unable to find it in the comments below
download it here: www.consultingbusinessschool.com/
It's a super worth information I have one doubt how do big consulting clients charge 2m and 1m for fixed fees in project? and what is the cost of 6 members involved with an consulting project? can u explain me
We've had consulting projects over $1millon. It depends on the size of the team, the experience level, the duration of the project. Many factors. With that size of project you need to make sure you deliver outstanding results!
Hey Rob, I just want to know that is consultant as a middleman service to construction companies like I help them to win government contracts ? I can be a middleman for government contracts, get a precentage?
I would call that an 'agent' rather than a consultant...
I couldnt download 7 Essential Steps to Consulting to start your own consulting business from your website.
Maybe try a different browser? I just tested it and it works fine. Some countries might be blocked by our site security. What country are you trying to access from?
@@ConsultingBusinessSchool will try again.. from united arab emirates
Hello , I want to know for someone who's consulting for one of the 15 biggest companies in the world on a call of tenders in his country , and providing Infos from highly ranked personel thanks to his connections , what is the daily 'rate' that he puts on his contract ?
Sorry, I'm not sure I fully understand the question. You are helping this Top 15 company with the tendering process? Or you are participating in the tender? Regardless, the daily rate comes down to a few things. (1) The value you deliver. (2) Your reputation and track record in delivering results specific to the client need. (3) To a degree, your 'recognised' standing in the industry as a person who can deliver. Don't fall into the trap of thinking that a Top 15 company will just pay much higher fees. They know how to hire consultants and what the market rates are.
It's about your ability to deliver something that others can't.
As an example, about 20 years ago I paid a consultant $20,000 for one day of work. It might have taken him a half day. But that consultant was market the leader in a very specific field, had decades of experience solving this specific problem, and was likely the only one in the country who could do it.
His work saved me at least 10 x his fee.
My point? High fees come with an outstanding ability to get a very hard result, time and time again.
Thanks alot , I'll consider what you said , now I have more awarness of the situation.
Consultant