Injustice thrives in places where we don't talk about money, and it particularly affects people from groups who are discriminated against. This is one of the main reasons why I openly publish my consulting rate card.
I'm a strong proponent of everyone charging more for their time, and is something I've seen be particularly stark in consulting. I've often seen two people doing the same job and having the same impact, but charge an order of magnitude difference. Typically, this is because the person on the low-end doesn't know they can charge so much more, or they don't have the confidence to do so. Publishing my rates is trying to help the first problem.
When I talk to people about this, or when people see my rate card, they typically have questions. This blog post is being written to answer the most common questions. If you have any that aren't covered, please don't hesitate to reach out, I'm always happy to talk about this and help in any way I can!
"How do you decide how much to charge?"
First, I price to value. This means I estimate the amount of value I add for my clients and charge some proportion of that, I think, is equitable.
This means I structure the conversation with clients around this idea, for example, "I can deliver $N value to you, and I will charge you $N". The client then must ask themselves two questions: do they agree that I will add that much value; do they see the amount I charge as equitable.
I take pride in what I do, and I understand and am confident about the impact I can have. I know that if I spend an hour talking to an investor about a company or market I am familiar with, for instance, I can easily deliver $10,000 of value. So, I'm very comfortable charging them $1,000 an hour.
This 10x multiplier applies to all of my rates and all the work I do for clients.
"Don't your clients go with someone cheaper?"
If a client comes back and questions my rates, it means I haven't done a good enough job linking what I do to value. That's my fault, not theirs.
Sometimes that's because they don't trust me, and connecting them to previous clients can help with that. Sometimes it's because they simply can't pay my fees, in that case I'm either talking to the wrong person at the organisation or I've done a bad job at understanding their needs. Again, these are at my door, not theirs.
But sometimes it just doesn't work out, and we can't agree on fees, in that case I'm privileged enough to be able to walk away and wish them the best. I'm not here to hard sell clients, if they don't get my value vs. price proposition that's fine. In fact, I'll often recommend people who might be better suited to help them.
"Wow, you charge a lot of money, how can anyone afford that?"
This question is often asked by people who think about what I do in the wrong way. For example, if you or I were to put a personal financial lens on my rate card, then the answer would have to be "There are very few, if any, individual humans who can afford my rates", but I'm not selling to humans. I sell to businesses.
Businesses operate in a financial context that can he hard to comprehend when you're only used to working with your own financial resources. They operate with millions or billions of dollars, numbers that are too large and abstract to reason about most of the time. For individuals $10,000 is a significant amount of money, for most medium or large businesses it is not.
Finally, my rate is pretty standard in the big wide world of consulting, for my level of experience and area of expertise. Many large strategy consultants charge a lot more and have more clients than they can handle who are willing to pay for it.
"What should I charge?"
The simple answer is: I can't tell you, but I can tell you three things: you're likely not charging nearly enough; you should also price to value; you shouldn't just copy/paste my rate card, you need to create your own.
I'd be happy to help you (for free) work out how much you should charge, though. So email me!
"What do clients think about your open rate card?"
So far, it's either had no impact or a positive one. The positive impact comes from the clarity it gives clients on my rates, and has reduced the amount of time they've tried to spend negotiating quite a bit.
"Do you negotiate you fees?"
It's complicated. For small projects (anything less than 1 week) I rarely negotiate (I can't remember the last time) and clients rarely ask me to. For larger projects, I don't usually 'negotiate' per se, but I do put a percentage of my fees 'at risk'. This means the client and I agree on a metric my work will impact and if that metric hits a set of targets I get paid my full rate (or more).
I talk to a client and I price the engagement at $50,000 based on my rate card. We both agree that the best measure of my impact is the 'Rate of $FOO' (ROF) which they want to see go up.
So, I would propose something like, "You pay be $25,000 no matter what. If your ROF doesn't go up, you don't pay me anything else. If it goes up by 10% you pay me an additional $10,000, if it goes up by 15% you pay me an additional $25,000, and it goes up by 20% you pay be an additional $50,000" this way my compensation is linked to their success.
Finally, I often work for free, either for founders from under-represented groups in tech or for organisations focused on having a positive impact. I suppose you could call that negotiating!
"Is this your full-time job?"
No. On average, I bill ~30 days a year.
"Do you bill directly or through a company?"
Via a company.
For small engagements (generally those where I charge an hourly rate) I work through agencies. I do this mostly because agreeing terms and signing contracts for every client for an hours work would be too onerous for me, but this way I sign terms with the agency, and they handle the client contracts. My company bills them, they bill the client.
For larger engagements, I bill directly through a personal services company, which is incorporated in the UK and is used solely to manage my consulting income. It means I need to negotiate and sign terms for each client, but it can make sense here because they're less frequent and represent a larger amount of money.
"Do clients ever not pay? How do you handle it?"
Sometimes. Broadly, there are two reasons why payment isn't made: the company can no longer afford to pay me, or it's stuck in some bureaucratic system somewhere.
For the first reason, I take a pragmatic attitude. This usually happens with earlier stage businesses, where I always knew this would be a risk. In that context, my piling on with threatening legal letters isn't likely to help me get paid, so I'll often wait it out, accept a lower payout or accept the loss and move on. I don't do this so spend more time with lawyers, and I'm privileged enough that this money isn't feeding my family.
For the second one, I could write a book. Luckily, I've been doing this for a long time, so I know how to operate and get paid (reach out if you need help here) and because my clients are typically pretty senior, so them following up with accounts payable typically gets the ball rolling. I've waited a year to get invoices paid, though, so it doesn't always work. I also have a very dogged accountant who never seems to get tired of sending emails to large corporates.