The main mistakes people make are the difficulty in pricing of services, lack of strategies to attract customers or when not diversified and is committed to a major customer.
How much I charge my client for the consulting service I have done? This is, perhaps, the issue of concern when undertaken in the field of consulting services.
The cost / time and the price / hour
To address this question wrongly usually approached from the point of view of cost and not price. “People just confusing cost / hour price / time and as having a year salary divide between, for example, 2000 hours they will work a year and you get a price,” says Daniel Frank a marketing expert.
According to this criterion, a consulting company should calculate their working hours assessing, on the one hand, hours mowing or harvesting, which are those that directly are being billed. Furthermore planting times, those departments that bill but have the potential to generate revenue in the future (call it R & D, marketing, etc.). And, secondly, hours of maintenance, that do not generate money, they have the potential to generate it, but they do help you be more productive.
“Based on this, a company has to analyze what their working structure. For example, 30% is dedicated to maintenance; 30% at sowing and 40% at harvest. The mistake most is that just putting the cost / hour price. An example: I want to win 20,000 dollars; as work 2,000 hours per year, the cost / hour is 10 dollars. That would work well if 100% of the hours with the client. But surprisingly, in a model of consulting, it is that 30% of the time is devoted to form, to innovate, and to keep up … and then there, with the method of cost / time and would be losing money from minute one” says this expert.
What’s your structure?
The correct strategy is to analyze who you are and what your structure and, on that basis, set your price. “If, for example, only 50% of invoices your hours, then your price / time must be at least twice. Factor not 10 but 20 dollars and above that amount, and can calculate what is the margin by which want to work,” says Frank.
Therefore, the price of the service should be set according to the value that brings to the customer, and not according to what it costs to produce the company (which is also important to know your costs to not be beneath them).
What if I charge what my competition?
Another error on that line is charged neither depending on what the competition charges, but probably have not the same structure nor to dedicate equal time to each of the activities that add value to the business: maintenance, planting and harvest.
Do I put focus on small or large?
Although not widespread, the smaller consulting firms have great difficulty in designing and developing customer acquisition strategies. Most often pull contacts, but not always taken and those are not perennial. One strategy used is to invest time and resources to attract large customers thinking that will give stability to the business, but in most cases this effort does not get the expected results.
“At first, to generate portfolio is important focus with all kinds of customers, testing and validating. Achieved this, you can now decide whether you want a client. It is a complex process you must do. Over time, of the first customers you will get rid. As the problem is liquidity, will have to make a mix, with small jobs that provide liquidity and others experience to validate your attitudes,” says Daniel Frank.