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The demand for consulting is up, way up! 

The US consulting marketplace has grown consistently over the past decade.  In the last three years, 2015-2018, consulting services have increased upwards of 25% bringing it to an estimated $68.5 billion U.S. dollars.

Demand is up and so is the desire from the US workforce to provide the service. 

Whether you’re new to consulting hoping to dive in to get a piece of the current demand for consulting services, or you’ve been consulting for years, you’ve inevitably been challenged with the thought…

“How should I charge for my services?”

Here we’ll give into a quick and straightforward guide for establishing your consulting fees and the things which need to be taken into consideration before settling on your pricing approach.

#1: Research the local marketplace – it is imperative you understand what the marketplace yields for the consulting services you plan to offer this way you have an understanding of how you fit in with your competitors and their respective offerings. Best way to obtain this information is to ask others in the business, attend events and get quotes from others in similar lines of work.  While you always want to make sure you’re getting paid for what you’re worth, you also need to be cognizant of pricing yourself out of the game.

For example, in Irvine, CA there is a large supply of people offering mechanical engineering design services. Baring any unique or niche expertise the average mechanical engineer consultant charges anywhere from $50-80/hr.  If you’re charging $125/hr for similar services you may find yourself missing out on projects with potential clients because the end user, or client, has too many other reliable and capable consultant options to choose from at rates cheaper than your offering.

#2: Fixed cost vs. time & materials – you’ll need to decide up front what type of pricing strategy you’re going to use.  Fixed cost is when you charge a flat fee or a ‘not to exceed’ fee for work you’re performing regardless of the amount of hours it takes you to get the job done.  Time & materials pricing structures price based on the amount of hours it takes to complete the job.  Read more HERE.

#3: Long game mindset – your pricing should reflect both your experience, capabilities but also your willingness to get repeat business from your clients.  If your rate is higher than the average marketplace rate for similar service you may still be able to get work, however you may find the client doesn’t pick you for additional work or longer projects.  Remember, the higher your rate the higher the clients expectations will be on your performance and the further scrutiny you will receive on your work output. 

#4: Know your profit margin – it’s important you understand what potential profit you stand to make for each project.  Profit is what keeps you growing and stable long term.  If you’re constantly breaking even you leave yourself at risk for unexpected downturns and other things out of your control.  Establish an ideal profit margin per project you want to achieve and incorporate that into your pricing.  Learn how to establish a profit margin HERE.

#5: Flexibility is key – clients like working with consultants that are flexible; if you’re too rigid with your pricing you may find you’ll lose out on opportunities in the long run.  Try pricing your work based on the difficulty of completing the task.  Perhaps you have a minimum threshold you’re going to charge per hour (say $100/hr) and then based on the work you’re potentially taking on you will scale your price upwards by 25%.  It’s not uncommon for consultants to have a pricing menu based on the range of their capabilities and difficulty to perform the work at hand.  We suggest not using a ‘one size fits all approach’ for pricing your services.

#6: Know what you need – while you should never price your consulting practice based on your personal lifestyle (clients don’t care how big your house is, what car you drive or what your bills are so they certainly aren’t going to pay you more just because your lifestyle requires it) it is important to know what you need to be charging in order to meet your personal financial obligations.  Once you know this number go back to step #1 in this article to see if your pricing number is in line with the general market.  Don’t charge more just because you need more to live.  Clients can smell that from a mile away and it’s a big turn off. 

Key Takeaway:
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Pricing should be based solely on the value you provide.  Your consulting price should have flexibility built into it while keeping in mind the difficulty of the work being performed.  Ensure you know how the marketplace is operating and what others are charging for similar services so you can be competitive with your offering.

Action Item:

Meet 3-5 people in the consulting space which is similar in nature to yours.  Learn about their offerings, how they go about pricing their service and what challenges they’ve had with clients specific to pricing.  The more you can learn from them ahead of your own efforts the better off you’ll be when it comes time to present your price in front of a potential customer.
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​The gig economy is growing.  Growing rapidly!
 
I recently stumbled upon a publication put out by MBO Partners on an annual basis which compares the state of our economy to the rise and decline of independent workers.  It’s a fascinating read, especially with the growth of the gig economy rapidly changing the face of the employment landscape as we know it.  MBO indicates 52% of the U.S. adult workforce within 5 years of 2019 will either be working or will have worked as an independent consultant or contractor.
 
That’s huge!  Literally half of those employed in the US in one form or another operates as an independent ‘gig’.  Furthermore, it’s estimated that 90% of the US workforce says they would be open to the idea of freelancing or consulting.
 
In one way or another that just about includes everyone in the workforce, or close to it.
 
If almost everyone you and I know are, or are interested in being, a gig [consultant] it will only lead to one inevitable outcome.  The gig space is going to start to getting highly competitive.
 
Being a freelancer or consultant isn’t uncommon anymore.  Long gone are the days where an individual branding themselves as such makes a unique statement which in turn gives that person a competitive advantage.
 
We may not be there yet however rest assure that in the coming years the consulting, gig and freelance field will become much more congested with new players trying to take a piece of the pie.  As such, it will be paramount for gigs to learn how to brand themselves accordingly to ensure they remain at the top of the pecking order.  
 
Branding is crucial! 
 
It’s more than adding a tagline to your business card which creatively says in a couple words what you do.  It’s more than building a LinkedIn profile hoping it does the work for you with a serene picture of a bamboo forest behind your mug shot.
 
Branding, a crucial part to any business, is indeed the next wave of importance for the consulting and gig community.
 
What does branding do?
 
Branding does a lot of things.  For starters, it helps to build an identify, one people begin to learn over time is synonymous with you.  Branding is all about strategic messaging to an audience about who you are, what you’re all about, and how you make a difference.  When branding is done right, it can take on a life of its own, far beyond the company, product and original intent.
 
Take for example the Q-Tip.  The handy little cotton based product invented in 1923 by Leo Gerstenzang allows us the delightful pleasure to clean the crap out of our ears, keeping them nice and tidy to prevent health related issues and even perhaps hear better.  What’s fascinating about Leo’s Q-Tip is that the word itself, ‘Q-Tip’, is a brand specific to one product now made by Unilever Corporation.  The branding for this product has been done so well over the years that we all refer to every cotton swab based product as a Q-Tip, regardless of the manufacturer.  This my friends is called an eponym.  
 
In fact, Unilever even has on their website “Q-TIPS® is a registered trademark of Unilever and is NOT a name for just any cotton swabs. The Q-TIPS® trademark can only be used to refer to the specific cotton swab products manufactured and sold by Unilever and should not be used to refer to cotton swab products of other companies or to cotton swabs generally.”
 
Even Unilever is aware of how well their branding has done in the marketplace, giving credence to their competitors similar products.  There are plenty of other products that fall into this category like Kleenex, Post-It Notes and Xerox.
 
Branding creates buzz while giving recognition to a person, company or thing that people can recognize and associate with.  It’s powerful stuff these marketing genius’ have dreamed up and we as consumers just love to eat it up.
 
So here’s the rub and what this means you for, my wonderful Mrs./ Mr. Gig.  It means you need to learn how to brand yourself asap, before the girl or guy next to you beats you to the punch causing you to become second fiddle in your own back yard. 
 
Don’t have experience marketing and or branding yourself?  Want to learn?  Here are the seven (7) steps to successfully brand yourself as a consultant (freelancer, gig, independent consultant, etc.) in no particular order:
 
1.Tell Your Story
People work with people they like.  This has been proven time and time again and I’ve seen it myself many times over throughout career.  People also naturally gravitate towards a good story, especially if that story gives them a reason to ‘act’.  Spend the time to think through and write out your story.  This is the ‘WHY’ you’re a consultant in the first place.  WHY you do what you do.  What propels you to be you, the inner workings.  Once you learn what this is write it down and develop a narrative that shares a story about who you are and why you do what you do.  Once you have that done the next step is to share it with the world.
 
2.Know What Problems You Solve
Customers don’t want benefits or values.  They don’t want long winded sales presentations that promise them everything under the sun.  Customers want solutions!  Once you understand what your customers problems are, you can then create information which talks about your ‘WHY’, mentioned above, along with your ability to solve your customers problems.  As you start to brand yourself via social media, print, publications, website, etc. make sure this is one of the first things your customers see.  It’s all they care about – how you can solve their problems.
 
3.Consistency
When you begin to brand yourself through the various avenues of social media, web, print, etc. it’s vital all of your information communicates the same message, look and feel.  This consistency gets viewers accustom to your approach, look and feel.  If every time you put something out in the world it looks completely different from one to the other you’ll never get people to connect to your product, service or company. They’re to busy being confused and lost in the process.  Keep your message and content simple, yet highly directed to your intended audience. 
 
Consistency also refers to the amount you brand yourself.  If you only do it once a month you’ll never get anywhere building a brand, however if you do one post, one article or one activity every day the results you’ll see are dramatically different.  Just remember, it takes time, so invest in branding yourself now.
 
4.Speak Like Your Customers
When you’re putting together content to put out in the world make sure you put yourself in your customers shoes.  Think like them, act like them, be them.  If you don’t know how to do that simply ask them.  The more you communicate and speak like your customer the better chance you will have in getting their attention.  If you’re trying to catch a whale, don’t pretend to be a shark.  Instead, be plankton, that’s what whales eat. (I think)
 
5.Focus on the Solution
When branding yourself and or your consulting practice focus on what results you create, provide or give.  The journey along the way is of course important however in the consulting/ gig world its all about execution.  If you can’t execute and successfully complete a project it doesn’t matter what you may have done along the way.  Results are all that matter, brand yourself accordingly.
 
6.Create a Website
I suppose this suggestion falls equally into the general marketing category however in this day and age if you want people to take you seriously having a website is a bare minimum.  There are plenty of tools available to create cheap, or even free, template based websites that give any size business or person the ability to compete with the big girls and boys. Check out Weebly or Wiix. That said, keep the website simple and in line with your customers needs.  Focus on your story and the problems you solve on behalf of your customers.  Also, make sure you buy the online domain names of your consulting practice and any taglines you plan to use for branding purposes.
 
7.Create Visual Content
No one’s saying you need to turn into a graphic designer, but it would help greatly if you could quickly edit and adjust images with your logo and brand to reflect your consulting work.  This can be easily accomplished via Microsoft PowerPoint and Paint programs.  One can buy stock photos online from dozens of pre-approved imagery galleries and edit them to your hearts content.  PowerPoint is a relatively easy to use program to do basic image editing with text, enough to at least get some content out to the masses that is custom and specific to your target audience.  Paint is a dumbed down version of PowerPoint, yet effective for small projects.
 
Key Take Away:
Don’t wait until your field gets over saturated before you start thinking about branding yourself and or consulting practice.  The best way to brand yourself is to start with you, your reason for being a consultant in the first place, and then the problems you solve on behalf of your customers.  Your branding should reflect all of this and be consistent across any platform you put it on - your website, social media, print media, publications, etc.
 
Action Item:
Does this sound like a lot of work you aren’t interested in getting involved in?  If so, don’t feel bad, branding yourself is no easy task.  Find a local marketing and branding expert and get help.  Ask them to work with you to develop your brand, your approach and customer facing appearance.  The money you spend upfront for this help will be well worth it down the road.  If you aren’t in a position to pay for help, set aside 3 hours a week to dedicate to your branding efforts.  It won’t be much in the beginning but at least it will get you on the road to ingraining this practice in your weekly operating rhythm.