Billing issues are often discussed between colleagues who have become friends, or between professionals not operating in the same geography. In this post, I shall share some of my lessons learned from my many years on the road.
1) Never work for a success fee, unless the client promises to implement everything you recommend, which of course never happens.
2) Your initial price will never really creep up very much over the years, so remember that what seems ok at the beginning will not appear so after ten years.
3) Don’t negotiate with Supply Chain about your prices; if your internal client is not willing to do that messy work for you, the client does not have the power to own and drive an OD project.
4) Do not submit an overall budget of the project hours until you have a good idea about scope. That means for the first few months, one should bill on an hourly basis.
5) If the client wants to know about your black box (how much profit you are making), in some cultures it is necessary to do so. I often say that “this is a very hard profession and I want to make it worth my effort”.
6) Never set a different price for training or for different levels of management. Ever. It will bite you in the ass, with sharp teeth.
7) If pay day has come and gone, collect. Don’t let the days float by. Clients won’t appreciate a consultant who does not run their business properly.
8) In very hard times, don’t discount but work for free. Working for free will be appreciated but discounts will become permanent.
9) When you negotiate with clients aboard, make sure that they pay money transfer fees, which can be extraordinarily expense. This can be worded as: “the client will agree that money transfer fees will be “ours”.
10) Make sure that up front it is clear that meetings which are rescheduled on the same day are billed at full price.
11) If you are working abroad, and you have already left your own country, all work cancelled or rescheduled is fully billed.
12) Always provide a work sheet which spells out who you met and for how long. Round your hours back to the last 15 minutes, so that 2 hours and 22 minutes is billed at 2 hours 15 minutes.
Hmm. A client who agreed in principle to an engagement stalled earlier this year. Understandable. The second wave of the pandemic locked us down. Then late last month, they say, can we begin now? Surely. So date range fixed. But when it comes to contracting no movement. So I insist 50% in advance on agreed terms. Then dates can follow. No word from them on either terms yet!
Your kind of pragmatism?
I call that client behaviour “hurry up and wait”.
I agree with what you did
Brilliant, once again, Allon. . . And oh so practical. I can’t COUNT the times I have violated, ignored or just didn’t KNOW one of your principles, and paid dearly for it. Still paying for it (passively) in one case. If I had known and followed the spirit of your bullet points when a client asked if they could use some of my videos and models in training some of their people, I would be a multi-millionaire now. Seriously! Oh, well. . .
Tomorrow–yeah, I know, it’s a Sunday–I am going to share these with our little team, who probably know them already, and declare that SLC will begin following and practicing these principles from my good buddy, Allon Shevat, immediately.
They will all say, ‘What about YOU, Janek?! YOU going to start doing them?!’
Guess I have to now. . . Thanks a lot, Allon. . .
I mean it, BTW.
Thanks Johnny boy
Terrific advice, as usual, Allon.
Very helpful tips. Thank you!