Getting Started in Consulting, 4th Edition

Chapter 8 Paying the Mortgage

We’re going to step back into the proposal at this point to understand how to create value-based fees. If you don’t do this and you charge like an amateur—by the hour or day—you’ll leave six figures on the table every year, which you’ll never, ever be able to recapture.

Why do that?

Alanism

My fee basis is to provide you with a dramatic ROI based on my contribution to your success, while providing me with equitable compensation in so doing.

How to Establish Value-Based Fees

I pioneered value-based fees for consultants in the late 1980s and popularized them in 1992 in the first edition of Million Dollar Consulting (McGraw-Hill, 1992). For those of you who acquired the book you’re now reading and turned directly to this section, welcome. May I suggest that, when you’re done here, you go back and cover the first seven chapters, which, I’m told, have some important information for success.

Let me repeat this admonition and make it clear: anyone charging for their services in time units is an amateur in consulting. In fact, any professionals doing this may be adept at their profession, but they are lousy businesspeople. (Yes, I know lawyers charge in six-minute intervals, and therein is my point. You want legal advice from an attorney, not business advice, believe me.)

Alanism

Since a client is always best served with a speedy resolution to an ...