Your consulting fees should be based on the value of your work. A number of factors influence this, including the scope of their work, their experience and the competitive landscape. Why do you want to increase the rates for your independent consultants? Is it because you want to get rich quickly? Or is it because you think you're actually providing enough financial value to your customer? Well, the first one isn't the right reason because it's just about you. The latter is correct because it's about you and your customer.
It's simple, the value you're offering to your customer, in the short or long term, should be 10 times more than what you're charging. When this happens, even the client will see consulting contracts as an investment, not an expense. The salary of an independent consultant is directly related to the complexity of the problems you're solving. Taking on big challenges is a sure way to increase your rates.
But remember that it's not just about saying yes to challenging projects, it's also about producing results. The more you say your rates out loud (not in your head), the more natural it will be for you and the more confident you will be when it comes to telling a potential customer. While we'll look at average consultant salaries and consulting rates by industry later on, these are just averages. I myself plan to set up an IT consulting business, at first it'll just be me, but my long-term goal is to scale up and eventually hire employees.
To increase your management consulting fees, you'll have to say, “No, much more than you think.” Your client wants a consultant they can trust, and that trust is established through negotiations and working together. Many consultants and freelancers make the mistake of confusing average consultant rates with standard prices; that's not the case. Because your fees are an expression of value, low consulting fees don't necessarily generate work or respect. While there's no right or wrong answer when it comes to how much consultants charge, consider the following tips to help you continue winning new clients and growing your business.
I have found these types of arguments in favor of focusing on the value that consulting work creates to justify the increase in rates; however, I don't think it applies to all avenues of consulting. This method is best if you're transitioning from a similar position at an agency or if you're consulting as a secondary activity. It's natural that you don't like the process of setting consulting fees, but you shouldn't have to lose money or sleep because of it. Regardless of the type of consulting business you operate, deciding how much to charge clients can be a difficult balance.
Keep in mind that your pricing structure needs to be constantly reviewed, especially as you develop your skills and try to expand your consulting. Multiply that by your hourly rate and then add a profit margin of 10 to 20% for unexpected contingencies, and voila, you have a rough estimate of a consultant's fee per project. Before embarking on an independent management consulting project, you might want to close your bedroom door, sit alone behind your desk and come up with the best strategy for setting the best maximum management consulting rate.