How Much to Charge as a Consultant - Value-Based Pricing Strategy

[Music] [Applause] [Music] so when it comes to charging as a consultant and how much you should be really charging your your client is really a game based on value so this is my strategy for kind of pricing a client I never ever really want to be looking at you know how many hours am I gonna be spending and solving this problem or anything like that you really want to start with you know how much is this problem worth to solve for the client how much value are you really going to be providing because a lot of consultants make the fatal mistake of going okay this is gonna take me two hours to do and I think my time is worth $30 an hour or $60 an hour or $100 an hour and nobody yeah like I'm really good like I'm making $100 an hour you know my friends they're making $30 an hour or $50 an hour or my brother-in-law he's a dentist and he only makes $100 an hour and I'm already making $100 an hour so I must be doing good that sounds fair I'll charge this guy $200 to do this project and the reason why that is is to flawed model is one he doesn't factor into any overheads of running a business it doesn't factor into you know how much is it gonna cost you to acquire a lead and then to acquire a client like how much money are you gonna need to put into advertising to even generate a lead and then how many leads are you going to need to get in order to actually land a client right and that's why you don't want to go down that model you want to go down to okay how how big of a problem is this for my client and then you know what do I believe the value of it is to kind of solve that problem you know if it's not directly like a business where it's like okay this is a $10,000 problem or $100,000 problem you know it might be you know you're consulting on wellness and weight loss and this like it's a stress counseling or anything like that you then you want to just think about what like how big of a problem is this and you know how much is kind of the value that I'm gonna be providing by solving this and I'm big on discharging 10% of the value of what you're providing do you know meaning it's a $10,000 problem charge $1,000 it's $100,000 problem charged him a thousand dollars and you really want to factor in to have enough margin in your pricing service to be able to run a business because another thing and it all depends on what your aspirations are is where are you going right what are your goals and what are you shooting for is this like a side hustle where you're just freelancing and you just want to make a couple of hundred extra dollars a month then that's fine then you don't really need to crazy think about the big picture but you know if you if you kind of clear on yeah like I want to build something that's just bigger than myself like I would love to have an office and I'd love to hire people to help me to impact more people and help more people then you're gonna need to be thinking about that right in the way that you actually price this because you're gonna need to be able to create a pricing strategy that's gonna support a much bigger team than just you right because what you might be at square one right now and it might just be you in your bedroom like it was for me you know you're gonna be shooting for a bigger picture and you're gonna need to be thinking about that now how are you gonna charge now to support that end goal of where you want to go so you know I'm really really big on the value-based pricing not hourly rate project fees can work but again the project again should be ascertained by how big the problem and the value that you provide but really kind of that retainer performance really think about that problem and how big of it is to kind of solve for somebody and then assign of value to that and then just charge 10% of what that value is to the client and that way you'll be really Congress when you're selling your services because you'll know that what you're charging is just a pittance because it's actually worth 10 times what you're charging and that will also result in the client getting a really good deal and that's really a win-win and that's what's really gonna fuel your your business and your life as a consultant the founder mission is to help you create an ass-kickin business and help you learn straight from the mouths of world-class founders get your free printed edition of founder magazine featuring Sir Richard Branson just cover shipping and handling at founder comm Ford / Branson you

Channel: Foundr

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Keywords: foundr, foundr magazine, sabri suby, pricing, consulting, consultant, fees, consulting 101, consulting fees, consulting business, high ticket sales, how much to charge, how much, entrepreneurship, business, strategy, charge, clients, money, FREELANCING, how to start freelancing, freelancing tips, make money freelancing, how to start freelancing business, how to start freelancing web development, freelancing for beginners, make money online, freelancing career, how to freelance

Id: UQZqDSKBXms

Length: 4min 57sec (297 seconds)

Published: Thu Feb 28 2019