Setting consulting fees can be tough to navigate when you’re becoming a consultant. There are so many parameters to consider–far more than just what others are charging.
Here are six reasons why you never want to compete on price:
1. Value – Regardless of the quality of your work, many clients will base your worth upon your rate.
2. Clients – In general, clients who choose to work with the lowest bidder are not the kind of clients you want. They’ll be more likely to want work for free and less likely to value the work that you do.
3. The Bottom Line - It’s one thing to donate your time and skills to a cause that you’re passionate about. It’s another thing to work for less than you’re worth on an ongoing basis. As a consultant, you’ve got less job security, fewer benefits, and a variety of adminstrative and other costs. You cannot afford to compete based on price.
4. Quality of Work – If you’re a consultant, odds are you’re passionate about what you do. Wouldn’t you like to work with clients who share that passion and are willing to compensate you for a job well done?
5. Available Hours – There are only so many billable hours in a week. Can you afford to compete based on price? Calculate your rate and consider the financial ramifications over the long term.
6. Lowest bidders – If competing on lowest price, the lowest bidders wins. What would happen if someone outbids you? Competing based on price is a race to the bottom.
Think you could benefit from tips and tricks regarding setting your consulting fees? Want to know how to avoid competing based on price? Consider purchasing my book, “Consulting Fees : A Guide for Independent Consultants.”
Have you ever competed based on price? How did you break the cycle?
- Setting consulting fee rates.
- Consulting Fees: A Guide for Independent Consultants
- Discover Your Inner Consultant
- Discover Your Inner Entrepreneur (for moms)