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Consultant Fees - What is a Consultant Worth?
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Consultant Fees - What is a Consultant Worth?
Consultant Fees - What is a Consultant Worth?
Consultant Fees - What is a Consultant Worth?
Consultant Fees - What is a Consultant Worth?
Consultant Fees - What is a Consultant Worth?
Consultant Fees - What is a Consultant Worth?
Consultant Fees - What is a Consultant Worth?
Consultant Fees - What is a Consultant Worth?
Consultant Fees - What is a Consultant Worth?
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  Post Number #41  
Old 14th September 2005, 03:13 PM
Jim Wynne's Avatar
Jim Wynne

 
 
Total Posts: 14,161
Quote:
In Reply to Parent Post by nielsmx

One CEO told me: "I hired professionals. These people are supposed to know how to run a project." Well, if that were the case, most projects would run smoothly.
In sports, people know the value of a coach.
Sorry, but the analogy doesn't hold up. In business, the CEO is analogous to the head coach in sports, and head coaches don't typically bring people from outside the organization in to do their jobs.
Mind you, I'm not in any way criticizing you, or consultants in general, or begrudging you your living. More power to you--you should charge whatever the market will bear. The value of any commodity in a free market is determined by what someone is willing to pay for it, so if people are paying you $2000/day, then you're worth it.

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  Post Number #42  
Old 14th September 2005, 06:00 PM
Helmut Jilling

 
 
Total Posts: 4,365
Quote:
In Reply to Parent Post by nielsmx

If people ask me what my Project Coaching costs, my standard reply is "If it would cost, I wouldn't do it".
I devised a project management approach to help projects generally deliver successfully, in 30% shorter time, based on PDCA and ROI (see web site in member profile). After having coached more than 30 projects in 12 organizations, I dare to work on a no-cure-no-pay basis. I think any consultant should be prepared to do that.
If people think I am expensive (charging some $2000 per day plus travel), I suggest that we split the profit.
We calculate the average time overrun of 5 previous projects. Then we add the overrun percentage to the current project. Then I suggest to split the profit of every day saved. The result (after some calculation by the client): they pay me by the day.
Example of savings at a recent client: 40 people in the project plus missed/gained profits per day: $70,000 per day. If I can make them save many days, by coaching several days, who's talking about my cost?
Remember that the consequential gains of your advice usually is (or should be) way more than the direct implementation cost. Why else would you do it anyway?
Well put! I agree, we consultants should back up our work, or shut up. But it it saves a client 20,000, then I should get a piece of it. Although, I have yet to have a client take me up on the share the profits offer. However, maybe I should reevaluate my dayrate...

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  Post Number #43  
Old 14th September 2005, 06:09 PM
Helmut Jilling

 
 
Total Posts: 4,365
Quote:
In Reply to Parent Post by wslabey

The answer is whatever the customer is willing to pay for the perceived benefit. It seems that nothing changes, just how it is packaged.

It all tends to be driven by what is the current hot quality theme. It cracks me up that Six Sigma became the hot ticket after Jack Welch threatened to club trainees to death (just kidding) if they didn't use the expensive training. Motorola started Six Sigma but never made the people use it to save money. GE, built an excellent structure to encourage its use and other companies copied at least the Green, Black and Master Black Belt concept.

After years of being on my own consulting for myself and about 10 other good individual life changed due to family medical issue. The time and dedication required to run a small business becam impossible to do well. I now find myself working at a fairly innovative supplier to the auto industry that still believes in vertical integration. I am not making what I did 15 years ago, but I don't have any platinum airline travel cards and don't miss the traveling all over the world (it's just a long ride to work). Our firm would be very hard pressed to pay anything more than $50 an hour for a consultant. $250 an hour consulting rates would be looked at by our executive committee as extortion and whomever recommended hiring him or her would be considered irresponsible.

I think the big fees are still possible at major companies where high level execs are your audience / sponsor. However, working with the supply base everything seems to be scaled back, including consulting fees.
Let's say your company is very small. Let's say I offer to play a game with you. You give me $200, and 1 hour later I give $1000 back. Then you give me $200 again, and 1 hour later I give $1000 back. How long would you like to play my game?

The question is not how much a consultant costs. The real question is whether he/she is good enough and knowledgeable enough to give you $1000 back for every couple hundred you invest. Unfortunately, many are not. But then, many execs are not worth their pay...

I daresay, I don't think I have cost my clients any money, if they follow my proposals, or they wouldn't invite me back.
  Post Number #44  
Old 14th September 2005, 06:18 PM
tomvehoski

 
 
Total Posts: 944
But for the sports analogy, say you have a $5 million NFL running back. If he could run for $2 million per game for Team A on Thursday night , Team B Sunday afternoon, team C Sunday night, and Team D Monday night. Each team pays $2 million for the expertise, saving $3M. The running back makes $8 instead of $5. It's the rules of the game, competitive advantage, etc. that prevent it from happening.
  Post Number #45  
Old 14th September 2005, 06:19 PM
IEGeek - 2006's Avatar
IEGeek - 2006

 
 
Total Posts: 197
Goodness Gracious, $2,000 a day plus travel. I just figured out my day rate at my job and I am either grossly underpaid or you are just the cat's pajamas.

Good on you. At my paltry $743.50 per day, I should barely be able to comprehend what my computer is. I am only teasing you. Although it was kind of fun to figure out my monthly, weekly, daily, hourly and per minute rates. So my employer is losing $12.31 for every 8 minute smoke break I take. WOW!!

This is a sore subject for me, as I was grossly overcharged by a consultant and was essentially held hostage and had no choice to pay her outrageous sums. Many who remember the thread and the debate that ensued can tell you, you dont always get what you pay for. I do not dispute the fact that you are worth every penny and I love the idea of putting your fee where your mouth is (so to speak). I also agree with JSW05 - if you are training on subjects that should already be known then it is wasted and you are training on how to communicate, not how to make a widget.

More power to you and I wish you the best of luck in all that you do. Please do not be offended if I do not call you for your services
  Post Number #46  
Old 14th September 2005, 06:22 PM
Helmut Jilling

 
 
Total Posts: 4,365
Laughing

Quote:
In Reply to Parent Post by tomvehoski

But for the sports analogy, say you have a $5 million NFL running back. If he could run for $2 million per game for Team A on Thursday night , Team B Sunday afternoon, team C Sunday night, and Team D Monday night. Each team pays $2 million for the expertise, saving $3M. The running back makes $8 instead of $5. It's the rules of the game, competitive advantage, etc. that prevent it from happening.
If I were the running back, I would vote for a change in the rules. The teams each save $3 million, the running back makes the $8 million he is worth, and the fans get to watch someone who is brilliant. Sounds like a win-win-win. Since the rules don't allow it, the running back should argue restraint of trade... Good thing I'm not a lawyer!
  Post Number #47  
Old 15th September 2005, 06:36 AM
Aaron Lupo's Avatar
Aaron Lupo

 
 
Total Posts: 908
Quote:
In Reply to Parent Post by hjilling

But it it saves a client 20,000, then I should get a piece of it. Although, I have yet to have a client take me up on the share the profits offer. However, maybe I should reevaluate my dayrate...

Welcome to the Cove.

If you want to look at it that way then why don't you offer to do the job and take a percentage of the savings as pay and better yet, if you end up costing them money you have to pay them a percentage.
  Post Number #48  
Old 15th September 2005, 07:59 PM
Helmut Jilling

 
 
Total Posts: 4,365
Quote:
In Reply to Parent Post by Aaron Lupo

If you want to look at it that way then why don't you offer to do the job and take a percentage of the savings as pay and better yet, if you end up costing them money you have to pay them a percentage.
Depending on the project, in a number of cases I have offered to do that. So far, they preferred to pay the fees. Maybe the fact I was willing to put it on the line, persuaded them that this was a legitimate offer. The real issue is not whether a GOOD consultant is worth his fee, but rather, how do you separate the good consultants from the weak ones.

I willingly subscribe to the premise a good consultant should guarantee his/her work.
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