Guide To Pricing Your Consulting Services

As a consultant, you are providing a business with invaluable insight that will help them grow their bottom line, solve an important problem, or take things to the next level. Putting a price on your time, and your knowledge can be a bit tricky, compared to something tangible, like a meal in a restaurant, or consumer goods. Over time, you will be able to more effectively tweak your pricing strategy, but when just starting out, you need some solid information to get the ball rolling. Here are just a few helpful hints for figuring out what to charge people for your services. And, if you are in need of a template, no worries. You can download this professional estimate for free.

Get Your Potential Client’s Budget

Knowing how much money your client has to work with can be very helpful in setting your pricing. But, a business may be reluctant to reveal this information for worry it will lead to a higher charge than you might have given without knowing this information. But, you simply need to explain to them that knowing their resources can help you set the scope of your services, and what you can specifically provide for them.

It is possible they are not being totally forthcoming, but the more you know the better; and, once discussions go further, you can talk about price increases if they are requesting you do more for them than what is covered in your initial fee proposal.

Reduce Scope Along with Price

Negotiation is to be expected in many business transactions, and it can be uncomfortable to say the least. Unless you are particularly skilled, it could be a losing proposition for the one getting the money, not the one giving it out. This can happen for a couple of reasons, namely being afraid of losing the deal altogether, and caving into price increases that are really not justified.  There is nothing wrong with lowering the price—if it is still profitable and worth your time, you are fine. Getting a particular job may open the doors for other opportunities, and lead to making more money in the future.

But, when it comes to negotiating, you should consider reducing the scope of your work as the price drops. This can help in many ways. First off, this will typically lead to a greater profit on average. Second, it may motivate the client to fork over the extra cash so they get all the services they want from you, and third, it will drive home the point that the work you do is valuable, and if they can perceive the value in your offerings, they are usually willing to pay more for it.

Be Clear about First-Time Discounts

Whether or not you should offer a discount for a first project can be a matter of debate. Ultimately, there is no right or wrong answer. It really depends on the situation, and you have to evaluate for yourself whether you think this will be advantageous in the long-run. But, it is crucial you are very clear that this pricing is a one-time deal, or clients may try to get this same pricing on future projects. When putting together your estimate, very clearly state the ‘list price’ and the exact discount you are giving for this first project.