The Tactical Advantage: Pricing
Starting a contract with no knowledge is career suicide. You should have templates and ideas ready even before you decide to step into the consultant or contractor world. Knowing your value, your position, your ability and tactics to execute, are all essential factors to have prepared before you engage this journey.
When I was offered my first contract, I had no idea how to act. I stumbled through negotiations with a very patient client and eventually came to terms. Since then, I’ve been prepared and always have a methodology for every step of the process.
When you look at your services, do you simply put your price down by the number of hours you work? I sure hope not. If I did, I’d be penniless. Reward yourself for working smarter, not longer, by pricing yourself based on the value you provide for your client. They wont think about it in terms of how many 40 hour days you work, but as whether or not you can solve a problem which they otherwise cannot. Are you rare for your niche in your area? More or less experience? Education? Assess the value you add to a company for the duration of your contract – and what losses you mitigate for them – and position yourself well before negotiations ever start.
Bring your client a sense of comfort by introducing a number of different ways you can work your payments – Lump sums, 50/50, percentage of overall cost. Perhaps my favorite is when a client has an emergency contract where you can charge based on value saved. Know how each of these work before-hand will save you a big headache when you approach the negotiating table. Plus, everyone loves options – where you can, let the client pay in a manner that suits them.
Battlefield commanders only win when they constantly assess the situation. Colin Powell once said “no battle plan survives contact with the enemy,” and he couldn’t have been more right. As your business progresses, you need to constantly assess how you can keep your budget tight, what new tools are available to you, what more efficient strategies have come to the forefront,
Tactics are the small choices we make that determine if we sink or swim. Your overall strategy is already laid, so make sure you execute well. Make sure you tend to these logistical issues lest you falter and fail.