[Sigia-l] Freelance IA consulting: Discovering the cost of do ing business

[Challis Hodge]

Good points. Two things to add.

1) For the foreseeable future much of the business that we secure as
individual consultants or small firms will be based on relationships.
Building longer-term relationships will be critical to success. Do it any
way you can.

2) I favor the model of starting out at a reasonable minimum rate and
cutting the bottom 15% of client business annually. This allows you to
increase your rates and move on to more challenging work. In many cases you
may move to a new role within an existing relationship. In other cases you
may amicably part company while still maintaining the relationship. It's
always good to bring in your replacement when possible.

-c

Challis Hodge
challis at challishodge.com    [www.challishodge.com]
chodge at humancontext.com    [www.humancontext.com]
312.382.0033 x17    mobile 847.830.8638


Victor Lombardi wrote:
The scenario might be more complex. For example, say you have one client
who is willing to pay a sizable fee. You might be able to undercharge
another client and in the end you still make a profit.

Another advantage of undercharging is to develop repeat business
("developing a relationship" in the lingo). Perhaps the undercharged
project is simple, and when the client sees the quality of your work they
offer you more complex work that is worth a higher rate. If not, then
perhaps it was a bad investment. But to be so conservative to never take on
some risk means you might never achieve better returns in the long run. You
can look at it all as investment strategy, where you're investing your time
and effort for some return. A more strategic approach might be better in
the long term.