4 things to keep in mind when setting your rate as an independent consultant

May 11, 2017 Katy Roberts

Six months ago, we held a live broadcast that provided tips and advice about how to determine your value in pounds and pennies, as an independent consultant. And after recurringly great feedback from so many of our consultants who watched the broadcast, we thought we’d refresh your memories with a quick take-home summary.  

You may be new to consulting, or you may be re-evaluating your rate, but whatever it is – here are a few things to keep in mind, when determining how you charge for your services.  

1.    If they can do it, you can do it

If you’ve taken the leap towards independent consulting, you would have no doubt faced a wide range of insecurities and even fears – but you have faced them, dealt with them (or maybe still are) and here you are.  So how do you assign a value to your services in a world where, historically, you have been used to having that value assigned for you?  Brigitte Herren, an independent consultant herself, tells us to think about consulting rates in 3 rate buckets: 
-    Highest: Strategy and Organisational consultants
-    Medium: Business Consultants  - Typically the "Big 4" consulting organisations
-    Lower: Niche companies and independent consultants. 
Typically, the lower-rate consulting bracket are those independent consultants who may not offer a global brand presence nor the the security and risk management that larger consultancies provide. So, as an independent consultant, leveraging your network and attaching yourself to business networks like Talmix can leverage some of the disadvantages that a typically “freelance” consultant would be faced with. 

2.    When you don’t agree with a client’s budget, it’s not the end of the road. 

The Talmix platform enables clients and consultants to have direct discussions about project requirements and budgets. Charlotte Bohlman, Head of Delivery at Talmix, tells us, "It’s absolutely fine to review the project description, and if you don’t agree with the proposed budget to deliver what the client is expecting, to propose something different - as long as the project context justifies that. We work with clients consultants to help them understand budget restraints and project realities. Don’t feel that you have to necessarily propose the rate on the project itself. At the moment, 80% of Talmix projects close in line, or above the project budget".   
Many clients know exactly what they want - many have worked with contractors before. But many clients may be posting projects in areas where they may not have the expertise and would be willing to discuss project budget adjustments and project subject detail. If you are able to show additional value throughout the process, you may have an argument for negotiating a higher rate. 

3.    Maximum Freedom vs Maximum Insecurity: You don’t need to be alone. 

Life very rarely just comes with the positives. And independent working gives you a lot more freedom – but on the flip side, this also means that you alone are now 100% responsible for your revenue stream. And if you don’t have a couple of clients or projects lined up, it results in maximum insecurity. Your existing network may only be able to take you so far. You need to reduce your insecurity by tapping into the network of others – and creating your own security and realising the power that comes through others. 

4.    Understanding your value means you can start to negotiate

When it comes to negotiating a project budget, remember that it's probably the first real interaction you’re going to have with the client - giving them their first taste of who you are.

That's why it is critical that you know your subject matter well - and if you aren't able to offer alternatives within a negotiation,  you’re not in a good position to negotiate. Brigitte says, "As a guiding principle, it’s not a smart thing to lower your day rate – it will be very difficult to recuperate it.  However, when you find yourself in the negotiation period, why not consider offering some added benefits to the client - for example, a lower rate at the start of a project, or a discounted rate of some sort, until they get to know you better.  Make it part of an interaction that demonstrates you can be flexible and agreeable. Remember that in the end, it’s never a good idea to leave a negotiation if there’s nothing left on the table for both parties."

Do you need help managing a project budget or discussing a project concern? Get in touch with us today. 

 

 

About the Author

Katy Roberts

Katy is an independent marketing consultant and founded Fresh Brew Marketing out of her love for the cuppa. A seasoned marketer, Katy writes for several global publications and provides outsourced marketing services to businesses throughout the UK. She is a keen geocacher and rates running around in city centres dressed in Christmas lights as one of her most successful Social Media campaigns to date.

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