Setting the right fee for your consultancy service is as hard as getting into the market itself. There are many loops to jump as you reel into the world of consultancy. Setting the right fee for consultancy service has since proven difficult to many people. Do it to carefully as you may price yourself out of the market. The following are tips for setting the right price for your consulting services.
It is vital to note that pricing should be the last thing to be executed in your business plan. Reason being, without initial trial, it would be difficult to know the reaction of customers in the market. First, know whether the clients love or abhor your services and thereafter, set the fee according to reactions of the clientele.
There are many ways of billing clients. Some of them may include hourly rates, contingency settlements, by- the- job fixed rates, flat fee plus expenses rate, daily fee plus expenses rates and so on. Each of them has pros and cons. What you choose therefore depends on the kind of services you offer and the crop of clients you are dealing with.
Which of these is the best way?
Value based fee are justifiable according to the value of what you are offering to the clients. For example, if you help a client earn millions of dollars, the charges may be higher compared to if you helped another one earn below 10,000 dollars.
Consultants charging on hourly rates base their pricing on the number of billable hours in a year. This fee covers overhead expenses and still provides room for profit making. Consultants that offer express services or those that need quick attention charge such billings. The pricing will definitely be affected by competition emanating from other similar consultancy firms.
Contingency or performance arrangements are done when a firm is based on offering partnerships to clients. Some clients value partnerships. Many consultancy firms enter into such arrangements only when they are sure they will contribute positively increasing the profit of their partner. They will then price according to their worthy contribution to the well being of the company.
As you bill customers, be sure that whatever you bill is the right fee and a good value for the client. The above-discussed tips for setting the right price for your consulting services may help you settle on a better marketing price that will not scare customers away.
