6 Facts You Need to Know About Starting Your Own Consulting Business

One of the biggest mistakes I see new consultants make is that they don’t charge enough for their service.

Maybe it’s guilt. Maybe it’s inexperience. But maybe they just don’t know how much they should charge. There’s no magic formula for fee-setting, but there is a general rule: Charge more than you think you should.

It’s important to your clients that they get a return on their investment, so this should be important to you, too. If you can prove your ROI, you’ve got leeway to charge a healthy percentage of the client’s profit.

Remember, the higher your rate, the better you look. If you saw two wristwatches — one for $10 and the other for $5,000, which one would you think superior? Obviously the more expensive watch is, the better a timepiece it is. The same goes for consultants. A consultant whose fees are $100 per hour will be valued far less than a consultant who charges $5,000 per hour.

If you’re expensive, then you’ll be more likely to get the clients who pay expensive. And that’s where you want to be.