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Consulting invoice template for Research and Development

let's talk pricing specifically how much you should be charging for your consulting services and then of course how to actually structure these payments and fees so that they're in line with your clients goals and we remove as much friction as possible to you getting paid so time stamps below along with some other helpful links and resources including a link to our consulting launch playbook to help you package your services figure out how to systematize your process so that delivering client results is a rinse and repeat process but before we can deliver results we have to figure out how much we should be charging now there are lots of different ways to do this so here's a quick way to find a baseline we'll start by making a huge list of everything under the sun that we possibly could do as a part of delivering results for our clients so this should include everything from the first onboarding call all of the back and forth emails and text messages communication time to you actually sitting down and doing the work you were paid to do right so let's say i am doing this for our own marketing agency just getting started and we're setting up an ads account for the first time and it takes about 30 hours including all those back and forth emails seriously think about all of that communication time you should be charging for that so then we need to figure out what is a reasonable hourly rate now before you hit the thumbs down button that doesn't mean anything anymore and leave a hate comment we're not talking about charging per hour this is just to figure out a baseline so there are a couple ways you could figure out a baseline what i like to do is head over to glassdoor.com you can set up a free account then search as if you were looking for a job here i'll just say ppc specialist and i'll set it to seattle washington where i used to live make sure you choose a major city so you don't have a downward cost adjustment on the salary and then here we can see i could expect to make about 80k which is actually pretty dang high so you can of course scroll down the page and they have lots of different information here as you can see but the main thing we want to figure out is if we were to go work at a company how much would be charged would we be paid we get to charge company right no it's a salary so how much would we be paid if we were just doing this normally right as a salary job and so we want to take that hourly rate and plug it into our formula here and then the final part is we need to give ourselves a margin right because we're not just an employee showing up we have business overhead we have a lot of other things we have to pay for like getting leads we have to pay for all our own software all of our own tools and laptops right so we want to add some sort of margin to account for all of that and we are a business at the end of the day we need to make money so we'll say 1.3 that gives us a 30 margin and so if we take our 30 hours times our 50 dollars per hour times our 1.3 it gives us about a consulting fee of about 1900 bucks to go ahead and set up a google ads account now of course there are lots of other ways you can do this upwork services is another great place to go if you set up an account as a client you'll be able to look at their service listings kind of pretty much like fiber except it's upwork right so you can go through and you can see how much freelancers are charging for similar services that you are planning to offer now obviously when you look at places like fiverr and upwork let's not take their pricing because their pricing is generally going to be pretty low but it does help you understand how to properly package your services so hopefully that is a quick and dirty way to figure out at minimum how much we should be charging so now let's go through some different models that we could use to actually get paid so the first one is the one you're probably least interested in so we'll blaze through it and that is the hourly contract model this is where you are a contractor you do the work you punch in your time card and then you get paid as a consultant i can tell you it's the worst thing in the world it just absolutely stinks we go through the math at the end you'll see why this is probably the worst one to do however when you're just getting started it might make it really easy to just say hey here's my hourly rate because i have no idea how long things take or you are dealing with your first couple of clients or you're dealing with a big client who is just absolutely demanding that you only do an hourly rate in which case just like double your hourly rate and those types of clients will usually pay because they're really concerned about how much time you're spending on things so here's a couple of examples of what you might be doing for an hourly rate it could be a custom tailored project it could just be a part-time client pretty much like a part-time job which is totally normal for consultants to start and so whatever it is this is the model that a lot of consultants start with if you can try not to and get out of it as quickly as possible and move on to the flat package or retainer model so the monthly retainer model is great if you're doing any sort of modern monitoring reviews or advice so this is where as a consultant you're not actually doing services i know i get comments like why do you say services when we're talking about consulting because the youtube algorithm melds them together so we have to meld them together until the youtube algorithm figures out that they are actually different and so for now let's talk about monthly retainers and so this is where you're not necessarily doing any physical work as in terms of services but you are taking an advisory role and so you can charge a flat monthly fee for access to you a certain number of strategy calls a certain time frame of getting back in terms of emails and again you're going to want to estimate how long each client's going to take now if you're actually doing some sort of services you're not just providing guidance and reviews and monitoring then you're going to want to use something like a flat package model and so here you're going to make a laundry list of all of the services that you're going to deliver for someone and then you're going to charge a flat rate for all of those services so if you're not quite sure like what would a package look like fiverr and upwork both provide a lot of different ideas again don't use the pricing just use it to figure out how you can create your own package i'll leave a link in the cards and the description to a super deep dive business plan for consultants that walks through how to actually design and create your own package also the consulting launch playbook walks through a very simple process so you can figure out what your package should be so with these you're going to most likely have a flagship and then you'll have a small one and then of course you'll have the really big one right the one that's like eight or fifteen thousand dollars where you do everything under the sun that like once or twice a year big client that walks through the door and you know like oh this one's really going to be a game changer and they can afford to pay me for everything under the sun and we'll talk more about that when you go through value-based pricing and so the second to last one here is going to be percentage now this one should really only be used if it's standard in your niche or industry and here you're going to not get any sort of guarantees but you're going to get a percentage of either cost savings what you are managing in terms of something like ad spend or commissions in terms of sales those are some common examples and so here you're not necessarily going to know exactly how much you're going to get paid and you also want to use this with clients who you've already done work with in the past because normally there's going to be some sort of lag as an example with us as a marketing agency after we do a flat package to set up a adwords or google ads account i keep saying adwords is google ads it's been years and i keep doing it so anyway after we set up a google ads account there's confidence for new clients right and then we switch to a model that's percentage so we charge a percentage of the ad spin that we're managing but we don't ever start that way because we don't want to do a couple months of managing and then find out the client's not actually going to pay us and so of course that's something that you do want to keep in mind is when you're charging your clients as well now this final one is probably the one that you've heard about if you've watched any other videos on consulting and pricing and this is the value right we're supposed to charge based upon the value we deliver like what on earth does that actually mean and does that even apply to your particular type of consulting well let's go through a basic example i'm going to do marketing again because that's what i do lots of marketing so let's say we have a family restaurant we have a local tax account or bookkeeper and then we have a car dealership so when we're thinking about these different businesses of course our restaurant is probably catering to families and so there's three to four customers at a time depending upon how big the family is and then of course we have the bookkeeper who's just targeting one person and then of course we had a car dealership probably dealing with at least two decision makers right and so now we need to think about if we're marketing agency and we're bringing them clients or customers or families then how much value are those people that we're bringing in the door well for our restaurant it's probably going to be 25 to 125 bucks per family or per table and then for our tax accountant it's gonna be 500 to 1500 bucks and then maybe for the car dealership where let's say we're doing used cars 4 500 to 12 000 right so you can see that we could be doing the exact same service but the results and the monetary benefit to the business is different based upon the type of customer so obviously we could charge the car dealership a lot more for the same service than the restaurant because they simply make more money off of what we do and so that can also play a role into well what types of clients do i want and of course everybody under the sun goes all right well i'm just going to go to the car dealerships well we all know life doesn't necessarily work that way so you might wind up finding that for restaurants you charge one price and then for bookkeepers you charge another and then for the big car dealerships you charge a third price right and so if we go back to our packages you can see that the different packages that we offer might change based upon the size of the client or the business and so this is value-based pricing where you try and figure out what is the value that my service delivers and then let's charge a rate let's say 10 to 20 of whatever that value is we'll go through some actual math in the final section so that does it for how to calculate your base price and then a bunch of different ways that you can actually charge comment below if you have any questions so far now i'd like to share with you our model of offering consulting services and how we actually like to stack these different pricing tiers so it's always in line with our clients goals so this is something we call the 3p squared model yes i should come up with a better name link in the cards in the description to our consulting launch playbook that goes through this in detail so i'm going to quickly run through it here so of course it starts with a front-end package this is what i like to do with new consulting clients so we offer them a flat rate package and then we go through and we do the work we onboard them we roll up our sleeves get to work and then of course there's an off-boarding process where we deliver results and then during this we try and come up with a flat add-on offer and so this is another flat rate service or consulting offer that we offer while we're actually doing the work and so we look for areas where we can provide and add value because after all whatever your package your client probably needs more right and so the last thing we want to do is say oh yeah sure no problem i'll i'll add that no worries because as soon as you do that once trust me there's another 10 emails asking you for just as much if not more work and so as soon as scope creeps start showing up where they go hey can you do this and it's definitely not in your original package you say oh yeah sure for a flat rate we can do x y z of course if you not don't want to do a flat rate this is probably the one area where you could go okay well we could do it for x amount per hour and then once we're done we can go ahead and add some sort of ongoing service if possible as a percentage so this is what we do as an agency we start by setting up your ads account as we set up their ads account we have an add-on for analytics tracking because almost nobody has it set up correctly and then then at the end if they're still happy with us we say hey for a percentage of your ad spend we'll stay on and optimize the heck out of all your campaigns or we also have a retainer model where some people don't want to have that active management but they do want to still have access to myself and or our team for just asking questions as they figure out how to optimize and so we also offer a retainer model so this is a very basic way that you can have multiple different pricing for different types of offers that you have in your consulting business so let's go ahead and break down some math this is the last part of math that we'll do in this particular guide for how this might play out as our marketing agency example so first we have the contractor model which is actual hours times our hourly rate so this is 25 hours of work 50 an hour 1200 bucks in fees so as you can see here it's not really nice because if we're faster we get paid less this is definitely something that was a super headache when i worked at different agencies i was like i got the work done more i got the work done faster can you give me a raise oh no we can't afford it just roll your eyes so anyway then we have package right so estimated hours hourly rate times our margin so even if it only took us 25 hours we still get paid the full 1900. now of course there is a disadvantage what happens if it takes 50 or 60 hours well that was a really painful client experience and now we know either two razor prices or how to not have that painful mistake in the future there is a learning curve here definitely had that i think my first client i wound up getting paid six or seven dollars per hour because of all the messes and things that i didn't see coming so then we have the retainer model which is the estimated monthly hours to provide consulting times your hourly rate times your margin so if we're doing 10 hours that would be 650 per month and of course you'll adjust this up and down as you learn about how much you're going to time you're going to be spending in terms of providing feedback but getting on the phone zoom calls or however you decide to interact with your client then finally we have percentage let's say we have a client spending 20k in ad spend we charge 15 in this instance so that's 3 000 for whatever the period is in this case it's a month and then finally we have value right this is really the hard one but let's say for our car dealership example we are selling getting them an extra 10 sales a month at 12.50 so that's 100 extra 125 000 in sales that the car dealership gets that they wouldn't if we weren't doing our job right so we could say okay well we're worth 10 percent of that so you can see how it's actually really similar to percentage but in this particular instance we would get a fee of 12 000 for providing 125 000 in sales and of course when it comes to value it doesn't necessarily have to be sales cost saving you can go ahead and calculate the value however you want what's just most important as you're looking through this is that whatever you're charging is in line with whatever your client ultimately wants and so because your client is paying for a result they're not necessarily paying for how long it takes you to get that result you don't really need to be super hung up on how long it actually takes you for a consulting gig or contract and as long as you can figure out the value you're delivering you're going to be able to easily reasonably price your consulting services so it's a no-brainer to your clients so thank you so much for watching sincerely hope you got some ideas on how to charge and what to charge comment below with your consulting pricing questions and make sure you check out that link to the consulting launch playbook to help you come up with your package find your ideal client and of course come up with some add-on offers as well to maximize your revenue so hit that like button subscribe for more guides just like this one and until the next keep building the business you love [Music] you

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