One of the hardest parts of being your own boss is calculating how to set consulting fees. It’s a delicate balance. If you set your prices too low you may not be taken seriously. If the price is too high you can price yourself out of business.
Research your industry before you set consulting fees
It is important to see what the going rate is for your service before you set consulting fees. Your potential clients will probably do the same thing if they don’t know a fair price to pay. There are three options for calculating consulting fees. You can set them by the hour, project or retainer. This article can help you determine which pricing structure will work best for your business.
Proof of performance justifies how you set consulting fees
It is important to use proof of performance as a solid foundation to set consulting fees. You should provide customer testimonials, work samples or case studies in your marketing materials. This is why it is so important for college students to seek internships before they graduate. This experience enables students to produce work samples and earn references. Another option is to do work for a non-profit. The organization gets the value of your work. Consequently you get a reference, earn invaluable experience and help a worthwhile cause in the process.
Check with your mentor before setting your rates
Your mentor can help you. I had a mentee with appallingly low rates. She had been in business for more than a decade. Her product was excellent yet she was charging half the market rate. As a result this forced her to work twice as hard just to eke out a living. She finally took my advice raising her fees slightly below the industry average. Much to her surprise she didn’t lose a single customer.