Consulting rate – Are you wondering how to set your rates as a new consultant? It’s extremely important to set an appropriate rate for your consulting services. Why? Because not only does your rate reflect your qualifications and expertise, but it’s also your bread and butter! Use a strategy when setting your consulting rate so that you are confident in your pricing structure. Rates should also take into consideration competitors’ rates, physical location (think urban cities versus small towns) and the exclusivity of your services.
Don’t under-value your consulting services
If you set your consulting rates too low, you are underselling yourself, and clients will think so, too. They will wonder why your services are so inexpensive, and they may even question your ability to deliver based on your consulting rate!
Another drawback to setting your fees too low is that it will be difficult to raise your rate later for existing clients. If you undersell yourself from the beginning, you may find yourself working for less than you deserve for some of your initial clients.
An obvious but nevertheless crucial drawback for setting a too-low rate is that you won’t make enough money! You’ll find that you are working long hours for minimum profit, and this is not how you want to run your consulting business.
Do your homework when it comes to setting your consulting rate
In order to get it right you need to take the time to research setting your consulting rate. Some factors to consider are:
• What are your competitors charging?
• Are you offering a unique service that will bear a higher rate?
• Are you highly qualified and experienced or are you just starting out in your career?
• Do you live in a large city or a small town?
It’s worth it
You might be tempted just to name a price and get on with becoming a consultant. However, setting the correct consulting rate is key to the success of your consultancy. Setting the wrong consulting rate can negatively impact the number of potential clients, decrease your revenues, reduce the profit you make and may not be easy to undo.
Take the time to set the correct consulting rate for yourself.
So how do you set a consulting rate?
Coming up with your consulting fee for the first time may seem daunting. However, once you’ve found a strategy in which you really believe, you’ll be good to go. You may want to revisit your decision from time to time, taking into account your experience, client feedback and even your competitor/rs’ activities.
Like this article? Get practical tips and 124 pages on making money as a consultant! Check out my Consulting Fees: A Guide for Independent Consultants.
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