How to price your consulting services - John B. Wilson
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This document provides tips for consultants on how to price their services. It recommends first looking at how similar consultants price their services to understand the market. Next, it advises taking into account overhead expenses like rent, utilities, and administrative costs to determine the minimum daily revenue target needed. Finally, it suggests establishing annual income goals and dividing by the estimated number of working days to arrive at a daily rate that covers costs and provides desired profit. The overall aim is for consultants to use a value-based approach that considers their unique offerings and allows for both expenses and profitability.
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How to price your consulting services - John B. Wilson
- 1. How to Price Your Consulting Services Presented by John B. Wilson J O H N B W I L S O N . N E T
- 2. JOHNBWILSON.NET INTRODUCTION Consulting can be a very lucrative field. However, it’s also a fairly lonely one. Consultants work for hire, and try to keep overhead low. Though there are consulting firms, most consultants work solo. Sometimes it can be difficult for consultants to land on a price point for their services.
- 3. LOOK AT HOW SIMILAR CONSULTANTS PRICE THEIR SERVICES That’s never a bad idea. It’s always great to know what price point the market can sustain. There are other strategies, though, that can help consultants or aspiring consultants to price out their services.
- 4. EFFECTIVE VALUE- BASED PRICING First, it’s important to figure out what costs are. Next, it’s a good idea to look around and see what competitors are charging. To finally set a value- based price, you need to figure out what intangibles set your product apart from the ones sold by competitors.
- 5. That’s right, start with the overhead. Remember, in the formula for revenue, there has to be room for both profit and expenses. Covering both is the only way consultants are able to make it in the long run. TAKE OVERHEAD EXPENSES INTO ACCOUNT JOHNBWILSON.NET
- 6. JOHNBWILSON.NET START WITH THE OVERHEAD How much is office rent monthly? Administrative assistance? Utilities like phone, internet, water and heat? All of this must be taken into account. Figure out the total business overhead expenses for the month.
- 7. JOHNBWILSON.NET Next, think about goals. What’s the goal for annual take- home income? $100,000? $200,000? Whatever it is, it’s important to price services accordingly. Divide the total goal number by the number of working days per year. Now add daily overhead. This is the target daily revenue. Remember, consultants are essentially freelancers. They may not be called on to work every day. Frankly, many might not want to. Those consultants transitioning from corporate life to consulting, may want more free time on their hands. So don’t just take the strict number of Mondays to Fridays into account. Figure in holidays, days off for personal reasons. Estimate work for 60-65% of actual working days.
- 8. For more information, please visit JOHNBWILSON.NET Thank You! JOHNBWILSON.NET