I just finished reading Value based fees – how to charge and get what you’re worth by Alan Weis. First, I highly recommend purchasing and reading this book. Second, I wanted to spend a little time talking about the concept of fees from the business owner’s point of view.
Whether we provide financial, accounting, legal or general business advice, we are all in the consulting world. And it is a hard truth of the consulting world that sometimes our Clients are disappointed because they don’t get a valued result from the work we do.
There are many reasons this can happen. Sometimes, for a variety of good or not-so-good reasons, the Client does not do what they need to do, and sometimes we don’t provide a clear roadmap or support to help the Client reach the desired outcome. But most of the time, I believe, both Client and Consultant are unclear on what the Client wants to accomplish in the first place.
As the old saying goes, “If you don’t know where you are going, how will you know when you get there?”
I think the reason that positive outcomes don’t happen as often as they could is because of a lack of clarity on both the Consultant and Clients part. Having a Clarity process is absolutely crucial in helping Clients develop expectations that are clear. This leads to a higher probability that our success rate with our Clients will increase. This clarity process is the entire reason we developed the Objective Review.
I’ve written in the past that our Clients don’t value our knowledge; they value the results that we get them. I’ve also written about hourly fees being the very worst way to charge fees to our Clients. Under an hourly fee arrangement, there is no focus on value, only on the hours the consultant or professional spends working on a project.
I instead recommend that when we work with Clients, we first put together a value statement for what the expectations of the engagement are and what the value of that engagement will likely be. From there, we can move to getting tacit approval that this is a good project to work on and then we can develop an adequate fee to go forward. When we do so, we will find that our fees will increase, but so will the satisfaction our Clients have with our work.
Josh Patrick
Filed under: Fees, For Business Advisors
