Getting Started in Consulting, Third Edition

Chapter 8. Establishing Fees: If You Bill By The Hour, You Cheat Your Client and Yourself

Those of you who have turned immediately to this chapter are welcome to my book. May I suggest that the prior chapters have some important information, and you should go back and read them before going on to Chapter 9. For those of you who have had the discipline to tackle this in sequence, let's continue along!

fees

those payments, usually in cash but sometimes in equity, bartered services, or other forms, which compensate the consultant for the value delivered to the client.

A fee is compensation that is paid to you in return for the value you are delivering to the client. That compensation may be in the form of equity, bartered services, chicken dinners, or future consideration, but 99 percent of the time it is (and had better be) in the form of hard currency. That value may be in the form of your talent, expertise, background, experience, contacts, or other attributes.

Consequently, value delivered that improves the client's condition should be rewarded with a fee. If we can agree on that, we can start down the road to preventing you from doing a lot of business for a little money.

Here is how I explain my fee basis to clients:

"My fee represents my contribution to the results of this project with a dramatic return on that investment for you and equitable compensation for me."

If you have a trusting, partnering relationship with a true buyer, you will receive zero resistance to that position, ...