How much are startup consultants paid
Prices for consulting services: what can I ask for as a consultant?
There is no other topic where consultants work up a sweat as they do when calculating and selling their prices - mainly because they usually have no solid purchase arguments and cannot justify their prices.
“If there were such a fee schedule for my services as for lawyers, architects and tax consultants. Then I would at least have an orientation for my pricing. "
Many have this wish Independent IT and business consultants, coaches and management trainers* secretly when you formulate an offer again. Because the following applies to their services: They are offered on the market at completely different prices. Many consultants are accordingly unsure when it comes to fixing their prices. Especially since they often register with colleagues: While consultant Müller has full order books, although he charges 1,600 euros / day, consultant Mayer finds no customers, although he offers the (apparently) same service for half the price.
* The members of the aforementioned professions are generally referred to below as consultants.
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Another reason many consultants are unsure about pricing
Many consultants never have their prices economically calculated, but based on the maxim “Let's see what the market has to offer”. If you calculated your prices soberly, you would quickly come to the result:
- My daily fee must be at least 800 euros.
Why your daily fee has to be at least 800 euros
This is illustrated by a calculation example: Suppose you want to be a "lone fighter" a taxable income of 4,000 euros per month achieve. Then yours should monthly turnover approx. 8,000 euros be.
Because you also have to rent an office and finance your car - as a self-employed person you also have to take care of your old-age and health insurance. Marketing also costs money - for example maintaining your website, printing brochures, sending advertising letters. And as a real professional, you want to attend a specialist seminar at least two or three times a year so that your skills don't dry up. You quickly come to an amount of 8,000 euros that you have to achieve per month.
Daily rate of at least 800 euros
However, a month only has 18 working days on average. And another eight of these are spent on administrative activities, product development, and marketing and acquisition tasks. So there are ten days left on which you can work as a consultant and generate the total monthly turnover of 8,000 euros. Consequently, your daily fee should be at least 800 euros.
Many (employees of your) customers are not aware that you have to calculate this as a self-employed person. As employees, they simply extrapolate:
“It charges 800 euros per day, and the month has 22 working days. So he earns over 17,000 euros a month. "
And of course they set sales with that Net income equal. You shouldn't even try to explain to them that this is not the case: They don't believe you anyway. In addition, you then voluntarily put yourself on the defensive. Better to work on conveying to your customers that you are worth their money.
What is “expensive” is relative
The general rule: What is “expensive” is relative. Because different prices are common for the various training and consulting topics. For example, companies usually pay less for seminars that teach work techniques than they do for management seminars. They also vary from branch to branch Price levels different. For example, lower daily rates are common in retail than in industry and service providers such as banks. And companies usually spend less money on training their production staff than on training their salespeople.
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What consultants should pay attention to when making a calculation
Therefore, no generally valid statements can be made about which prices a trainer or consultant can charge and enforce on the market. However, statements such as those made by an advisory association some time ago should be treated with caution: From a daily rate of 1,500 euros, it is difficult to enforce the desired fee. Because for some market segments the following applies: Already one Daily fee of 800 euros requires a very convincing sales argument.
For other market segments, however, applies
If you “only” ask for a daily rate of 1,500 euros, your target customers will not take you seriously. For example, if you want to coach the top executives of corporations. Or if your target customers are auditing firms that have high daily rates themselves.
You can ask for any price if ...
The above statements show: The price you charge for your services is always a relative value from the customer's point of view. Or to put it another way:
You can ask for any price - as long as there is demand for your service and you can sell the price argumentatively.
An example calculation for this
A presentation trainer from Baden-Württemberg demands a daily fee of 3,200 euros for his presentation seminars - and receives it. But that's not all: his customers also pay him for the preparation and follow-up work for each seminar with half a daily rate, i.e. 1,600 euros. And that although seminars on the subject of presentation tend to be paid poorly.
The argument for this daily fee
The trainer is an electrical engineer by nature and has specialized in the employees of research and development departments, who often have to present new technical solutions to colleagues from outside the field or even to the board of directors. Another target group of his are the sales engineers of manufacturers of complex technical capital goods. He teaches you how to explain (and sell) your company's problem solutions to customers in an easy-to-understand way.
Another example calculation
Another provider advises suppliers to industrial companies on how to get their industrial customers through higher prices. He charges 5,200 euros for a consultation day. In addition, he has the preparation of the consultations remunerated at a flat rate of 2,600 euros. And he gets this fee.
The argument for this daily fee
Many industrial companies have pushed their suppliers' prices down so hard that the latter simply have to raise their prices if they want to work profitably because of the increased raw material prices. The consultant has caught a burning issue with his target customers. That's why they almost don't care what the consultant costs. The main thing is that he solves your problem.
Develop buying arguments for your customers
The prices you can achieve also depend on the extent to which you can create the feeling in your target customers:
"This is exactly the consultant I want / need to have."
And this in turn depends on yours competence and of the extent to which these are reflected in your self-statements and yours Self-marketing reflects. And this is where the problem begins. Every consultant considers himself competent. However, many cannot convincingly demonstrate their competence to their potential customers - because they have not derived any verifiable arguments from their biography as to why companies should hire them and not a competitor.
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This is what a consultant's price argument looks like
This is different with a management trainer and consultant from Munich who specialize in the financial sector. He writes on his website under the heading "8 reasons why you should contact me":
“There are a lot of management trainers and consultants. That's why I'll give you a few reasons why you should contact me:
- As a trained banker and graduate in business administration, I know that everything has to pay off - including training and advice.
- As a long-time employee of a well-known private bank, I have experienced how much competence, passion and attention to detail are necessary to inspire discerning customers.
- Due to my 12 years of management experience, I know the fine structures of financial institutions and know where things often get stuck in their day-to-day management.
- I only work for banks, insurance companies and investment companies. My industry expertise is correspondingly great.
Do you want to find out more reasons? Then call me."
The consultant gives his (not yet) customer very clear reasons, derived from his biography and thus verifiable reasons, why they should hire him. And with them he also justifies his price - 2,500 euros per training day and 3,000 euros per consulting or coaching day.
This is characteristic of consultants who have clear purchase and price arguments
You have your Analysis of strengths and your Clearly define target groupst. For example, in almost every industry there are trainer and consultant gurus who “nobody knows” outside the industry. They are also largely unknown among their professional colleagues, as they do not appear in trade journals, for example. These providers, who usually work very profitably, are also not interested in this. Because their target group is not their professional colleagues, but, for example, logistics companies, printing companies, auditing companies or engineering offices.
That is why you should build up a reputation for yourself as an "expert on ..."
Above a certain price level, fees can no longer be rationally justified. They are just an expression of the fact that the consultant in question is "the expert" for a topic in the eyes of his target group, which is why many customers decide for themselves: "If we can bring a consultant into the house, then this one."
To become "the recognized expert on ..." should be one of your goalsSelf-marketing be. You don't have to become a globally recognized "guru" right away. In every city there is a baker who is known to bake the best bread or cakes. So your goal could also be:
"I want to become the recognized best consultant for small and medium-sized companies in Buxtehude and the surrounding area."
And wouldn't it be worthwhile to build a name for yourself in your target group so that instead of 160 consulting days per year for 800 euros you can possibly sell 80 consulting days for 1,600 euros? Then your sales and probably also your bottom line profit will be largely the same. But you gain more time.
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The advantages of this self-marketing strategy
The less time you spend in trainings or consultations, the more time you have for:
- yours further education
- the Further development of your "products"
- the Maintain relationships with your customers
You will also have more time to write articles or books and give lectures that will cement your reputation. So you can keep expanding your competence lead over your competitors. You can also work to ensure that a topic becomes more and more associated with you. This has the advantage that potential customers call you more often on their own initiative. In addition, if you speak to (not yet) customers yourself, you have a different entrance than a "no-name".
Important: Be in demand in bad times
If your market collapses once, you can still slightly lower your prices and force colleagues who work in the lower price segment out of the market. It is difficult for them to defend themselves against this. Because they don't have your competence. And since they are already in the "Low wage sector“Work, they cannot lower their prices any further.
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