Know-How Exchange : Strategy

Generally, consulting should be done on an hourly basis, although your clients--assuming that you're as old as a "typical" college graduate--may not want to have anything open-ended with you. (This is actually true regardless of age and experience.)

You will probably have to put a cap on how much you'll charge for a given project. However, you need to be smart, too, about not letting clients walk all over you for extra time that is not necessary. If you put a cap in, be specific about what constitutes completion of the engagement.

A ballpark estimate as to what a consultant charges is three times whatever the individual would earn in a salaried position. If you think you'd earn $60,000 working for someone else, that's about $30/hour; you could probably set your consulting rate at about $90/hour. Again, however, the reality of the marketplace could be that you won't command this, at least not at the onset. At this stage, you might even have to work on a "results only" basis (or at least hebily discounted), which could be worth it if it means getting a client list and testimonials together.

As far as what's the best way to attract clients... Well, the smart-alecky side of me is itching to say, "You're supposedly the marketing expert. What do you advise yourself to do?"

The kinder, gentler side of me, however, suggests that you're probably going to need to do a lot of networking to land those first few clients. Direct-mail is anything but cheap, and you need to do a lot of it before you get results. If you don't have anything to work on, then the incremental value of your time is currently zero, meaning that getting on that phone and smiling and dialing is not a bad use of your time. Cold-calling is brutal, however, so if you're not prepared to handle a lot of rejection, don't do it.

Good luck with this. Let us know when and how you land that first client!

Paul

Jason

Which country are you in? And hey, while you're at it, could you fill in your profile with a bit more info?

It helps KHE members know you better and allows us to be a bit more specific with advice.

Talking of which... I have a slightly different approach.

First - what makes you want to go into consulting? Have you ever had a line management job in marketing? Aside from everything you learned on the degree course, have you actually had any marketing experience?

Reason for asking - people usually hire consultants for what they know and have learned through their experience.

That's not to say no-one's going to hire you straight out of uni with a freshly minted degree, but it sure won't be all that easy.

Do you have any networks or contacts yet? That's another asset that usually comes from having some industry experience.

OK, let's assume you have enough contacts to get hired - what Paul (Inbox) is saying I kind of agree with, except I have a numerical methodology like this:

What do you need to earn (or would like to earn?) Be realistic... OK, say the number is 100 in whatever your currency is.

To work out what you need to charge, first you need to know how much billing time you expect to have.

For a start, you can probably only expect to work about 46 weeks a year. Four weeks holidays and downtime, maybe two weeks with flu, colds, car trouble and other downtime.

Each week you work, you might spend two days networking, prospecting, marketing yourself and preparing proposals, and three days actually performing billable work.

So take the original number (100), divide by 46, divide by 3. That's how much you need to earn every full day you actually work. What does that give you per day? 0.725?

So if you work 8 hours a day, you would need to charge .091.

So if the original number was 100% of what you want to earn (before taxes) you need to earn roughly 0.1% of that target salary, per hour.

A lot of consultants start out expecting to work 40 hours a week, 52 weeks a year. The next time that happens to me will be the first time...

Plus, I'm assuming you've factored into your original target salary - or should we say "Gross Revenue" any costs of administration, amortizing equipment, office space rental, telephones and communications costs, transport, etc.

Of course, some of those costs may be recoverable from the client, depends on the deal you propose and what they will accept.

Always go into an engagement knowing clearly what the scope is, and what the customer understands is included within the price, i.e.. the price for the scope.

If anything occurs which means extending the scope, do tell the client what it is, why it's outside the scope, and approximately how much extra it will cost.

Another thing. Don't flog your time by the hour if you can help it. Clients will expect it's OK to hire you by the hour. If that's the sort of projects you want to do, fine, but for meatier, more interesting projects, there's not much gets done in under a half day.

And if the half day starts late, you lose the other half day... See what I mean?

So you need to be thinking about selling your time by the day, or per project value chunk is even better. Then the time becomes a side issue, the client is only focused on seeing the job completed and paying for it.

Do yourself a favor. Read Michael Goodman's book "Rasputin for Hire". Michael's a fellow KHE member. If you can't find it in your local book store contact him via his profile.

Hope this helps. Good Luck. Let us know how you get on.

ChrisB

As ChrisB suggests where you are in teh world will help us answer the question better, but here is a UK perspective.

The average day rate salary for a UK marketing consultant is £650, and rising :-)