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Jules Haughey posted in the group Coaches and Mentors
Hey everyone. Wondering if anyone can help me with consultancy fees for outsourced work?
I’ve been working with a newly established consultancy business. Until now I’ve been paid day rates or project rates.
I’ve been invited to lead, build and manage the HR consultancy.
What are standard / reasonable fee structures?
1. If they source work and give it to me to complete, what is a fair percentage?
2. If I source work and complete it, what should I pay them given that it’s under their ’brand?
Thanks in advance for any guidance, much appreciated!
6 Comments-
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I came to the conclusion a few years ago that the biggest imepediment to earning money was me being prepared to ask for a bigger number. Its very easy to play safe, especially when you need the work. And I did just have a client say No because I was too expensive which either indicates I’ve found the top of the market or I didn’t execute my ask well enough (probably a bit of both.)
I’ve worked with partners and agencies (occasional contract type work I’ve done) were they will be putting 20%, 25% or even more on top of my day rate.
When I work with friends – people doing also working portfolio – we tend to pass each other work and take a 10% cut. That said, I was talking to someone the other day who told me of someone who was acting as middle man and taking 50% or even 60%. I feel bad asking a friend for 25%.
I’ve worked with ”resellers” in the past who have sold my training, generally it is a combination of day rate and royalty for material, It tends to work out that they take about 50% of the revenue, which sounds a lot but I know that marketing and selling is half the work.
So, the only thing I can deduce from this is: rates are all over the place.
And that is before you factor in quantity – nothing is quite as transformative as regular work, although you can start to loose some of your portfolio element. I’m picting a retainer relationship to a client at the moment, fingers crossed.
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Hi Jules,
I tend to find that rates vary dependent on the consultancy I’m working with. I do a lot of delivery for one in particular and I’m being paid a third of what the client is invoiced, and in my experience that’s pretty standard. If I were to introduce a new client to them I’d consider negotiating two thirds for any work I delivered. This was also the business model we used for our associates in my previous role, which was a permanent position in a leadership development consultancy.
You’ll probably find that some consultancies have a business model they won’t budge from in which case it’s for you to decide if you’re ok with the rate being offered, and some will flex and ask for your rates in which case don’t be afraid to ask for a bigger number as long as you can justify it.
Hope that helps!
S
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Hi Jules Haughey – a good ’primer’ article is here: http://staging.the-portfolio-collective.com/insights/how-much-does-portfolio-work-pay
You could also come along to one of the weekly Pathfinder Checki-In calls that happen each Monday. Thses are the kinds of problems we discuss as a group every week.
Ben
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Jules – I’d be happy to help and I used to run an HR consultancy many moons ago! Feel free to book a call here https://calendly.com/zarir-zed-vakil/30min
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A USA perspective that may or may not apply … I find that so many of these kinds of relationships end up around +/- 15% … small enough for the giver to not give it much of a 2nd thought (still getting 85%) and large enough for the receiver to feel like its a decent return on little effort). That said, if it is your background/track record/experience./brand they are using to supplement their own to have the credibility to add/build this new practice then you should be bold in not undervaluing that … obviously I would need to know a lot more and depending upon more specifics, I would certainly give a 2nd thought to whether the baseline ”equity” basis should be 50/50, or 1/3 2/3rds or 80/20 etc and then you have variations on that baseline according to different scenarios. I pretty much grew my revenue every year by putting my prices up as my brand credibility grew not by increasing my volume. At least food for thought.
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Hi Jules, this is a great question and a topic that so many consultants struggle with – tagging some members who might be able to give you some advice – Paul David Mather, Andrew Wainstein, Saira Chaudry, Ben Legg, Anthony Donataccio, Julia Poncar, Emma Jelley, Allan Kelly, Ilaria Vilkelis, Shamir, James McKerracher, Nicola MacPhail