Are my hourly rates too high or too low?

Business owners are enjoying their position of power as capital floods Canada and one of the big issues is how the fees charged by professionals are being squeezed. A post by Robert Dunford about how to charge for his finance services unleashed a torrent of responses.
I particularly liked the advice from Michael McGrady:
I personally believe that it’s imperative to lead the preliminary discussion as a marketing professional and leave the tactical/technical for later. You provide knowledge, perspective, assurance and informed caution – your work helps to set strategic direction, inspires the development of deal structure, helps to craft strategies regarding earn-outs, reps & warranties, etc. and in some cases help prevent bad deals from happening. We have all been involved in or know of deals that went south solely because of poorly executed research and due diligence – the financial consequences of these bad transactions always eclipse the minor onetime expense your contribution would have provided. They clearly like your work; remind them, talked about the multifaceted value you provide and the consequences of a poor execution. And don’t lower your price; if you don’t value your time who will? 
The second thing to possibly consider is working on retainer or a combination of retainer and an hourly rate for overflow. There is more work involved on the front end to ensure you and the client understand the scope. I like retainers because I don’t have to manage a time sheet and if I am more efficient in some aspect of my work I don’t penalize myself with fewer billable hours. The client likes it because they don’t feel they are being nickel and dimed and it gives them a delineated line item for the budget. As I said it’s more work on the front end but so far I haven’t broken my pencil and I make more money than I would have by billing hourly (knock on wood).
There was recommended reading from Isabella Brusatti and the book inspired this quote - Baker's book qualifies as a "good book," as defined by Thoreau: 
"Books, not which afford us a cowering enjoyment, but in which each thought is of unusual daring; such as an idle man cannot read, and a timid one would not be entertained by, which even make us dangerous to existing institutions––such call I good books." 
—Henry David Thoreau: A Week on the Concord and Merrimack Rivers, 1849
Jacoline Loewen, Money Magnet author, Mergers and Acquistions expert.

1 comment:

Anonymous said...

Thanks for this 0 very interesting.