Valuing Your Expertise
As a consultant, you’re selling knowledge and experience borne out of many years working in a specific field. This is not like selling widgets with fixed manufacturing, inventory, marketing, and distribution costs. We’re talking intellectual property that’s unique to you. It’s a bit trickier to put a value on accumulated expertise and the ability to translate it to a client’s applications in a way that creates tangible, measurable benefits.
If you undervalue your expertise, you risk working too hard with insufficient compensation. If you put too high a price tag on your intellectual property, you risk alienating clients and losing out in competitive bid situations.
- Catalog your intellectual property. Identify and list business models, proof concepts, methodologies you’ve created that have shown measurable results, software models, white papers you’ve written and all other aspects of your professional skills and experience over the years. Your accumulated body of work will help you put a dollar value on your expertise and prove your worth to clients.
- Whether you charge by the hour, by the day, or by the project, find a balance between a fair value for your level of expertise and the competitive marketplace. It’s human nature to undervalue or be leery of someone who charges a lot less than others in their field, so don’t be afraid to price your services towards the high end of the scale. If you consistently deliver results, clients will be happy to pay you top dollar and they will view your services as a good value.
- Always work under a written contract, signed by all parties. This helps to avoid misunderstandings about project scope, objectives, deliverables, and payment terms. It’s a good idea to have your contracts drafted, or at least reviewed, by a lawyer.