Archive for the ‘Business Matters’ Category
Why You Should Use Value Based Fees
There’s a lot of talk about value based (aka fixed fee) fees. Listen to this three part series from a practioner who took his practice from waiting 180 days to be paid, not making money and wanting to give away his clients because they were so unprofitable.
Today this participants greatest fear? That he hasn’t priced himself high enough.
How To Turn $150 An Hour Into $50 (And Back Again)
In the consulting world there’s no shortage of people claiming to bill $150, $175 or $225 per hour. To talk with them you’d think they were invoicing an average of 40 hours every week with no slack in their schedule.
What I’ve found is that one portion of the story is true – they have no slack in their schedule.
They probably don’t sleep much either.
That’s because they’re working 120 hours – and billing for 40.
Are they really collecting $150 an hour (or pick your favorite rate) for EVERY hour that they work?
No.
There’s one big part of the story that you’re never told though. Their average rate is somewhat closer to $50 (or less per hour). Why?
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Google Tasks As A Free and Quick Implementation Checklist Generator
Whenever I go out onsite for a client upgrade or implementation I think how much easier life would be if I had a standard checklist in electronic format.
Isn’t that something we all promise ourselves that we’ll do – someday? Create that master checklist that guides us through routine tasks such as upgrades.
There are numerous paper checklists publishers provide – however the items are often tediously redundant and it seems so 1980′s to be flipping through 15 pages of photocopied instructions.
Today I’m off to upgrade a straightforward MAS 200 system and I’ll be trying Google Tasks as my checklist generator.
Google Tasks is free – and located in your Gmail account listed on the left side as “tasks”. It’s a decidedly bare bones way to keep a list of items you need to complete.
Before I leave I’ve created a Google Tasks list on my desktop computer. Using software for the iPhone I synchronize the tasks in real time so that I can use them while on site with the client.
If I find that I need more items in my task list — I can add those on my iPhone and they’ll be synchronized back to my desktop list of tasks.
What I hope is that with a little tweaking that I can soon have a set of tasks that become my master implementation guide that also travels with me wherever I have my IPhone or access to the web.
You can easily drag, drop and add items just about anywhere on your Google Task list.
There are also Apps you can download to your iPhone – such as GeeTasks (shown above) which will synchronize your tasks so you can use your list deep within a server room that gets no cell reception.
Why My New Rate is $400 Per Hour
There are two ugly trends in the world of consulting. I’m counteracting them today by more than doubling my “rack” rate to $400 per hour.
I think you should too.
The two trends ?:
- Customers searching the web compiling spreadsheets of what random consultants charge per hour -with little apparent regard for whether the consultant is good, has the capability to solve the problem or even has recent relevant experience with similar companies.
Think I’m kidding? On an average day we’re receiving two calls that are nothing more than companies (or IT consultants who work for them) checking on our rates and “how many hours would it take” to [fill in random project here].
- Consultants who, desperate for work, have slashed rates to an unsustainable $125 per hour (billed in quarter hour increments) and below.
And if word-of-mouth is to be believed those eye-popping rates of $125 are appearing in large cities like New York and Boston.
We bill our time for support and consulting as a fixed guaranteed fee.
So for me - quoting an hourly rate is meaningless. It does nothing but lower my perceived value to the same – or less - of the consulting morons firms who are underbidding, under-serving (and ultimately losing) their customers.
Some other thoughts.
Don’t Make A Mistake Promoting Your Firm, Product or Services
Here’s a boring tip of the day for anyone involved in promoting their company, services or any news to the online world.
You need to tell someone about the news.
Don’t assume that those who report it will automatically stumble across it (as the other two folks in the photo at left - Isaac O’Bannon and Bob Scott – regularly do for their respective publications CPA Technology Advisor and Bob Scotts Insights).
The world of public relations is changing fast. More news is moving online which means a greater opportunity to spread your good news faster – and cheaper – provide that you know some of the secrets of effective public relations for 2010 and beyond.
The people who you should tell and involve in your message have greatly expanded. With the advent of LinkedIn and Twitter and Facebook you need to be talking to key members of the communities that you want your message carried to.
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Not Responsible For Hidden Damage
Last week my car had an unfortunate meeting with the back of a car carrier.
It’s probably one of the only times I’ll ever be hit in the front end while I’m frantically steering my car in reverse.
Seems that a local trucking school undergraduate forgot to read the part in “Trucking 101 for Dummies” that says it’s not recommended to stop in the middle of a road and shift suddenly to reverse – without looking behind you.
I’ve heard some good comes from every situation. In this case the “good” is a simply brilliant phrase that I’m eager to incorporate (with slightly different wording) into my proposals and engagement letters.
This phrase covers much of the challenge that I’ve been having with fixed fee pricing – especially when applied to upgrades with many different unknown variables – data integrity being the biggest.
While traversing the fun world of auto insurance claims, and body repair shops I was introduced to this phrase. I’m claiming for my own use. Read the rest of this entry »
When Your Client Asks For An Oil Change – Don’t Tune The Brakes For Free
Nobody likes surprise bills – especially not our clients.
In an effort to keep surprise bills out of sight of their clients – consulting firms often engage in what’s known as “eating time”.
That’s when they’ve told a client that a task will cost $ x when it actually costs $ x time two.
The problem is the task usually does only cost $X. But they’ve unwittingly caused it to expand in cost by widening the menu of items (aka scope) that they’re fixing without informing the client (who probably would have gladly paid for the extra service).
I liken this to bringing your car into the mechanic for an oil change – and the mechanic fine tuning the brakes or transmission (at no cost) while your car is up on the lift.
This little action costs the garage nothing and it builds goodwill. Or does it? Read the rest of this entry »
The Sad Depressing State Of ERP Prospects
Click the image at left for a full sized version of an email that I just received not 10 minutes ago. Here’s another from July 1, 2010 where the sender was kind enough to leave in the names of all the consultants that were emailed the RFP (Tip: Never think you’re the only one).
It illustrates part of that’s wrong with the ERP marketplace.
Don’t misunderstand me – it’s not that I think it’s wrong for a prospect to send around this email.
What saddens me is that the prospect likely has at least in part mis-diagnosed their needs – and probably will receive two or three sight unseen quotes from other VARS.
Craigslist As A Lead Source
This morning I spotted a posting on the free online classified advertisement site Craigslist for MAS90 MAS200 EXPERTS!!!
You can click the image on the left and read the whole advertisement. The bigger question for most consultants is whether these types of free advertising sites work to attract prospects?
Yes! This advertising works. It will attract responses. You may even be busier than you ever imagined – so long as you don’t mind working for three kinds of people (and they all share a common distaste for paying for consulting fees).
Here are the three primary types of prospect you’ll be sure to attract with a free advertisement that primarily offers low cost services.
SEO Just Got 9 Times Harder – Content 9 Times As Valuable
In case you’ve missed it Google recently updated their search layout.
Instead of always returning standard search results as indexed within Google – the search giant now displays a total of 9 additional places that a searcher (aka prospective client) can find your company.
Nine!
Just when you thought that SEO was a snap and all you had to do was throw a few hundred keywords up on your firm’s home page – the game is suddenly changed.
Actually the game has been changing for years. Blogs have emerged as relevant research tools. Social media sites like Twitter and Facebook have enabled our customers to reach out to their friends for recommendations as opposed to relying upon raw searches through Google or other easily gamed Internet search engines.
Is there a way for you to keep up with all these changes? I think so – and it’s been right in front of your nose all along.
