how do I charge my clients I get this
question a lot from my readers and it’s
really important when you’re starting a
service-based business you have to
figure out how much you’re gonna charge
and how you’re gonna actually get paid
by your clients a lot of the question
again came in from a mal one of my
facebook readers he wrote in hi Evan as
a consultant how do I charge my clients
is it an hourly rate per project
percentage of the total project cost
thank you for this question I’d really
look at what phase you’re at in your
business okay let me let me explain for
the customers they want cost certainty
okay this the biggest fear for a
customer is that you’re gonna do an
hourly project you’re gonna run way over
your time and they’re gonna be way over
budget on the flip side the challenge
for you is if you do a fixed fee then
you may not be able to factor in all of
the costs that are gonna come right you
may end up working for minimum wage
because you’ve done so much extra work
above and beyond what you thought the
project was gonna entail my preferred
model if you’re just starting up if you
are just in the startup phase if you are
not at the point of survival yet you’re
not at the point where you’re making
enough money to pay your bills put food
on the table we’ll have to worry about
going in and get another job right if
you’re not there yet
then my preferred option would be to do
a fixed fee rate so whatever the
projects gonna be you estimate how long
it’s going to take you and you give your
clients certainty the reason why is
important is because you want to build a
relationship with your clients and it’s
easier to get them to say yes to a deal
when they have certainty the more risks
you take away from them the easier it is
to say yes so do a fixed fee say it’s
gonna cost you $2,000 $100 10,000
whatever it is you make an estimate
you’re gonna be wrong but you’re gonna
try to be close it’ll teach you to make
your estimates better and as you develop
in your business you’ll get better and
better at making estimates and the one
thing I would put in there is really
defining what the project is gonna be
about because almost always the project
changes the longer the project
for there are things that will change in
what they want you to do some things
will now become important that weren’t
in there in the beginning
some things that they wanted before now
aren’t important anymore they’re gonna
throw away some of the project it always
happens and that’s a big risk on your
part as being a consultant so you wanna
you want to watch out for project scope
creep and that’s where your clients are
changing the deals on you anytime
something comes up where they want to
change something then you have to make a
decision and talk to the client and let
them know okay if we’re gonna do this it
wasn’t part of our initial deal but if
you want to do this then it’s either
them a costume or or we have to take
something out and keeping those lines of
communication open always because it
builds a relationship with you in the
client and it also prevents bad feelings
you know if the client keeps saying add
this add this add this and suddenly
you’re working so many extra hours are
not able to deliver it on a budget that
you’re happy with then it’s not going to
be a good relationship with you and the
client and it’s gonna probably end up
and in some kind of fight and the
project not finish it so be conscious of
that be consider the project scope creep
but at the start to make it easy for
your clients I would say start on a
fixed fee base so they have cost
certainty okay this is only to get to
the phase of survival to get to the
point where you’re making enough money
that you don’t have to worry about going
back into the job I’m not talking about
living a life of luxury here this is
basics the challenge of the service
based business is it’s hard to scale
it’s hard to really scale up a service
because you’re always trading your time
for money
and your time is limited you could bring
on other people to work under you that’s
the best way to do it if you need to
scale but it’s still so much harder to
scale a service based business than a
product if you look at the businesses
that venture capitals invest in if you
look at the businesses that are throwing
off huge returns they’re not service
based companies because it’s too hard to
scale so if you want to have a major
impact if you want to make a lot more
money if you want to really reach your
community then you want to start
thinking about how you
can either as a consultant take a piece
of the company that you’re working with
or start to productize your knowledge
and information because that’s going to
help you have that bigger impact okay
but I don’t want you to do that from the
beginning because that takes more time
is riskier and you’re gonna run out of
money before those things come through
most likely so at the start get to know
your clients more closely with them do
fixed fee projects get to the point of
survival to the point where you are not
worried about having to go back and get
another job and then from there you can
afford small risks and thinking about
taking a piece of the companies you’re
working with starting to productize your
information and starting to have a
bigger impact that will help you scale
up your knowledge and expertise believe
those you watching liked the video
please give it a thumbs up below it
makes me to do more for you and I’d love
to hear what you have to think leave a
comment under this video and I will make
a video response if you have a question
thank you so much guys and I’ll see you
soon
question a lot from my readers and it’s
really important when you’re starting a
service-based business you have to
figure out how much you’re gonna charge
and how you’re gonna actually get paid
by your clients a lot of the question
again came in from a mal one of my
facebook readers he wrote in hi Evan as
a consultant how do I charge my clients
is it an hourly rate per project
percentage of the total project cost
thank you for this question I’d really
look at what phase you’re at in your
business okay let me let me explain for
the customers they want cost certainty
okay this the biggest fear for a
customer is that you’re gonna do an
hourly project you’re gonna run way over
your time and they’re gonna be way over
budget on the flip side the challenge
for you is if you do a fixed fee then
you may not be able to factor in all of
the costs that are gonna come right you
may end up working for minimum wage
because you’ve done so much extra work
above and beyond what you thought the
project was gonna entail my preferred
model if you’re just starting up if you
are just in the startup phase if you are
not at the point of survival yet you’re
not at the point where you’re making
enough money to pay your bills put food
on the table we’ll have to worry about
going in and get another job right if
you’re not there yet
then my preferred option would be to do
a fixed fee rate so whatever the
projects gonna be you estimate how long
it’s going to take you and you give your
clients certainty the reason why is
important is because you want to build a
relationship with your clients and it’s
easier to get them to say yes to a deal
when they have certainty the more risks
you take away from them the easier it is
to say yes so do a fixed fee say it’s
gonna cost you $2,000 $100 10,000
whatever it is you make an estimate
you’re gonna be wrong but you’re gonna
try to be close it’ll teach you to make
your estimates better and as you develop
in your business you’ll get better and
better at making estimates and the one
thing I would put in there is really
defining what the project is gonna be
about because almost always the project
changes the longer the project
for there are things that will change in
what they want you to do some things
will now become important that weren’t
in there in the beginning
some things that they wanted before now
aren’t important anymore they’re gonna
throw away some of the project it always
happens and that’s a big risk on your
part as being a consultant so you wanna
you want to watch out for project scope
creep and that’s where your clients are
changing the deals on you anytime
something comes up where they want to
change something then you have to make a
decision and talk to the client and let
them know okay if we’re gonna do this it
wasn’t part of our initial deal but if
you want to do this then it’s either
them a costume or or we have to take
something out and keeping those lines of
communication open always because it
builds a relationship with you in the
client and it also prevents bad feelings
you know if the client keeps saying add
this add this add this and suddenly
you’re working so many extra hours are
not able to deliver it on a budget that
you’re happy with then it’s not going to
be a good relationship with you and the
client and it’s gonna probably end up
and in some kind of fight and the
project not finish it so be conscious of
that be consider the project scope creep
but at the start to make it easy for
your clients I would say start on a
fixed fee base so they have cost
certainty okay this is only to get to
the phase of survival to get to the
point where you’re making enough money
that you don’t have to worry about going
back into the job I’m not talking about
living a life of luxury here this is
basics the challenge of the service
based business is it’s hard to scale
it’s hard to really scale up a service
because you’re always trading your time
for money
and your time is limited you could bring
on other people to work under you that’s
the best way to do it if you need to
scale but it’s still so much harder to
scale a service based business than a
product if you look at the businesses
that venture capitals invest in if you
look at the businesses that are throwing
off huge returns they’re not service
based companies because it’s too hard to
scale so if you want to have a major
impact if you want to make a lot more
money if you want to really reach your
community then you want to start
thinking about how you
can either as a consultant take a piece
of the company that you’re working with
or start to productize your knowledge
and information because that’s going to
help you have that bigger impact okay
but I don’t want you to do that from the
beginning because that takes more time
is riskier and you’re gonna run out of
money before those things come through
most likely so at the start get to know
your clients more closely with them do
fixed fee projects get to the point of
survival to the point where you are not
worried about having to go back and get
another job and then from there you can
afford small risks and thinking about
taking a piece of the companies you’re
working with starting to productize your
information and starting to have a
bigger impact that will help you scale
up your knowledge and expertise believe
those you watching liked the video
please give it a thumbs up below it
makes me to do more for you and I’d love
to hear what you have to think leave a
comment under this video and I will make
a video response if you have a question
thank you so much guys and I’ll see you
soon
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