Last week I promised I would cover “How much should I charge?” in detail. In this week’s blog I keep that promise. Here we go!
Let’s take a look at the first place you will charge: planning.
The Planning Fee
How much should you charge for the up-front work: fact-finding, initial analysis and recommendations?
There’s a lot of work you and your team need to do up-front, and the temptation is to cost it out and charge what you need to charge in order to make a profit. Now, I know this might sound crazy, but I’m going to suggest that, for now, you don’t worry about profitability this early in the client relationship. As you become more skilled in setting up your value at the first meeting you can increase your planning fee charges to cover more of your costs, and maybe even one day charge enough to make a profit on this phase of the work, but that isn’t necessary to start with.
How much you charge depends on many factors, including:
The quality of the clients you work with in general.
Your skill levels at the first meeting.
Your technical knowledge, and more importantly, your ability to communicate that knowledge effectively to clients.
The value you will add on the potential job for the specific client sitting in front of you (for some jobs it’s easy to add lots of value, for others not so much).
I suggest you start with a fee that you can ask for (out loud and in pounds) without freaking yourself out.
Here’s a good guide for finding that figure:
Trust me, the first time you ask for your fee up-front the amount is going to squeak out of your mouth. You might even find yourself sitting there with a figure in your head throughout the entire first meeting, only to halve it when it pops out of your mouth at the end. But hey, that’s what you have to do to get started. So ask for a modest fee, for example £500. Or if you are really scared and the client in front of you is pretty unsophisticated make it even less, say £250.
Asking is the key issue when you are learning this new skill, not how much you ask for.
If you are more experienced, skilled and confident and you work with better quality clients make it £995, or £1,995, whatever feels right to you. Try a few numbers on for size and see what fits.
What you will find is that people say “yes”. You’ll be amazed. It’s only advisers, using a charging system designed 300 years ago by product manufacturers, that think they somehow have to work for free! Clients don’t think this way.
We have trained our existing clients to believe, think and expect that what we do is free, but truthfully even they don’t think that it actually is free. They know it’s built into the cost of the products they’ve purchased. Some clients are happy to not know how much that cost is, whilst others absolutely detest this way of working.
So ask for some money.
What happens is that very quickly (in less than 5 clients that you try this with) you will realise getting paid a planning fee is not a major issue. Within the first 3 months you will increase your planning fees and within 2 years you will be charging an amount that is right for you and your business.
Next week I’ll take a look at implementation fees and ongoing review fees.
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