April 2004

Questions

I have been a consultant for over 15 years working with HMOs to improve operations. I am now starting to pursue projects involving instructional design and e-learning for small businesses in Western PA. I know how to price my services for the former. What advice do you have for pricing the latter?

Answer

I highly recommend that you price design by the project. You say you are experienced so you should be able to determine how long a project will take to complete. Use this to pinpoint a price that will be enough for you to provide the service required yet be reasonable for your clients. Pair your project price with a clearly defined project plan that specifies deliverables and responsibility. Then be careful to avoid scope creep.

Question

Currently, I work for a large 5,000+ person consulting firm. I have a Ph.D. in Instructional Technology and Organizational Development, and have deep consulting experiences in: Change Management Organization Design & Development (Headquarters, R&D, and Manufacturing) High Performance Organization Design Business Process Reengineering Strategy Formulation Performance Design & Development Human Capital Management (skills assessment, job design, career development, succession planning, skill development, rewards/compensation, team development, recruit/hire/selection.) I am growing tired of large consulting practices and would like to join a small boutique; however, I hear many differences regarding fee ranges, i.e., $600/day to $2,500 day, and billability --average being 100 days/yr. What is a reasonable expectation regarding fee structure and billability. I know it all depends, but there must be some sense of "What boutique consulting life is all about?"

Answer

Joining a small firm means that you will most likely be an employee, unless you intend to start your own firm. 100 billable days per year is a minimum for a small company. Also realize that the fees the companies charge do not equate to your salary. Even if you subcontract with them you can expect to receive 1/3 to 1/2 of what the organization is charging. Why? They own all the liability. They own the research and the materials. They have invested in the marketing. They have bills to pay. As you know, large consulting firms are similar. They will pay you a salary and expect you to bill and generate three times the amount of your salary. After saying all that, every boutique firm will be different. I believe that what is more important than salary and the number of days you work is whether the boutique is a match to your values. If you have not read Geoff Bellman’s A Consultant’s Calling, I highly recommend you do so before making a move. You appear to be very experienced and would most likely add value to many firms. With your experience you might also want to find a partner and start your own small firm. Good luck!

Question

I have been working as a HR manager for over 7 years. I want to venture out into consulting because after time I get bored working for one company. What ’s the best way to get customers? I will do cold calling, but even with that, is there a sure way to get clients? I know once they see what I am capable of, they will be happy with my services. I just don’t know how to get that first contact. What advice can you give me?

Answer

You are right. There are no sure ways of getting clients. Have you read Marketing Your Consulting Services? If not, please write to me at ebb associates inc, Box 8249, Norfolk, VA 23503. Identify yourself, include your mailing address, and request a copy. I will send it to you.

Question

I am an experienced communications educator fairly new to consulting. I'm seeking out speaking opportunities in order to branch out into other professional domains. How can I go about searching for conferences and other opportunities that might welcome my material?

Answer

First determine an industry focus. You might make that decision based on who you work with now, the industry base in your area, or which industry you would like to have as clients. Next identify the associations that support these industries. The associations usually sponsor the conferences. Contact the association and ask for the conference schedule and a submission packet.

Question

I am currently consulting for a fortune 500 company providing L&D services. We have been fairly successful in providing metrics on the viability of the training. However, we are in negotiations for additional services, that they want and need, but they are unwilling to pay a 'fair' rate. Their main concern is price, without respect to quality or time. My question is, how do I convince the manager that the price is reasonable for the tasks to be performed?

Answer

To paraphrase a quote, “Value is in the eye of the beholder.” If you have data that proves the ROI for the services you offer, and the client still refuses your services, you might ask yourself if something else is preventing them from saying yes. If you do not have a relationship that allows you to have this candid discussion, you might question whether you should continue to work for this client.