We work with a lot of professionals who at one point or another have to assign a dollar amount to their time. It can be a struggle to find your voice in these moments. So often, the amount one charges a client has implications on how they feel about themselves. In my own journey, I have found that it takes thoughtfulness, time and working on my own development to be able to speak confidently on this subject.
This week I was brainstorming with a client about multiple perspectives to consider when effectively setting a budget for a customer project. Here’s what we came up with –
1. Be realistic when you estimate the time you think a project will take. Build in safe guards for scope expansion by being clear about what is included and services that may require additional fees.
2. All work incurs expenses of one kind or another. In addition to the time you will spend with a client or doing the work from your office, you will want to consider the cost of gas, travel time and other expenses such as presentation supplies.
3. Honour how you built the expertise to do the work. You may have templates that can be altered quickly for this project that were the result of hours invested in previous situations, most of which you didn’t get paid for. You also may be able to make decisions more quickly based on your expertise.
4. When called in for urgent and time-sensitive matters, you may have to put aside other professional and personal priorities and work long hours in a crunch which could incur additional expense, such as subcontractors or additional childcare. Start by identifying what you will give up by taking on this project.
5. It is always an asset if you have an idea of what your local competitors would charge for a similar piece of work. If you’re an independent advisor, on occasion it can be helpful to reach out to trusted collaborators to find out if your proposal is in line with what they might charge.
6. You may be asked to consider a client’s capacity to pay when you are asked for a service. With care, there are many creative solutions that may exist, such as packaging your fees, trading services or agreeing to unique or extended payment plans.
7. Long-term, steady clients are a gift. A customer that has been with you since you started your business or where there is potential for additional work may be offered a different rate. You may also offer a discount to clients who refer you to new customers or return for a second-round of projects.
8. Opportunity costs are also relevant when setting an outline of fees. If a client doesn’t hire you, what implications would the organization or individual face? What internal costs would they accrue? Would they face operational, financial or legal risks?
Scoping out a project is not an easy task. We worry about charging too much, not being a competitive option for and face being turned down by a client. We are concerned about charging too little and risk not covering our expenses. Most importantly, we want to feel good about the service provided to a customer and contribute positively to our own self-worth.
Connect with us to share your story! Let us know if we can help you become more thoughtful and confident when designing your next project.