Value-Based Fees: How to Charge—and Get—What You're Worth: A Guide for Consultants, Second Edition

2.3. LIMITING PROFITS, OR WHY NOT JUST FORGET DOMANI?

The very worst aspect of billing based on time is the limitation it places on profitability. I've never believed in business plans, for myself or for my clients, because the danger with a plan is that you might achieve it.^[]

^[] Of course, major organizations need business plans to show the shareholders that management is fiscally responsible, but they also put out beautiful annual reports that have nothing whatsoever to do with the actual business. No one should manage against a business plan for fear of hitting it and missing untold opportunities.

Consultants—and this applies particularly aptly to solo practitioners—take extraordinary business risks. Why shouldn't they reap the commensurate rewards? The only intelligent business proposition is to attempt to maximize profitability. Note that I'm not saying "maximize business," because that might lead to harder work, longer hours, and an infringement on one's life balance. But I am saying "maximize profits" because we wouldn't be very good businesspeople or consultants if we didn't.

Therefore, why create a straw man of an artificial business plan that delimits growth? (Have you ever really seen managers in October still managing against a plan created the prior June?) The mantra-like focus on "increasing business by 20 percent" or "gaining five new coaching clients" or "gaining 5 percent in the Canadian marketplace" is rather pointless if, in fact, the conditions were such that ...