The majority of a consulting business' costs come from labor and support functions. Expenses like salaries, commissions, and license fees are major costs. Minor costs like travel, equipment, materials, and professional services like legal, finance, IT, and HR can add up quickly and have a big impact on your profitability.
- The majority of a consulting firm's costs…are labor and support functions.…Expenses like salaries, commissions, and license fees…are major costs.…Do some benchmarking on salaries…for the level and skill of people you need.…Decide if you're going to pay at, above,…or below market rates.…Don't forget to include the costs of benefits, vacation,…and equipment for your team.…Talk with other consultants about…commission models they use.…There's no shortage of innovative ways to compensate people.…
Just be sure the behavior you're paying people for…is the behavior you want.…If you give people a smaller commission…for generating a lead…versus a large commission for closing a sale,…you might find yourself with a lot of low-value leads…because that's an easier way for your people to make money,…rather than doing all the work of closing a complex sale.…Think through your compensation model…really hard before you launch it.…License fees for things like software packages…or third-party content can be steep.…
You'll need to either mark that cost up…
- Working as a consultant
- Generating revenue as a consultant
- Cost structures, pricing, finances, and taxes
- Marketing and selling consulting services
- Negotiating and contracting
- Working with clients
- Presenting findings to clients
- Implementing recommendations
- Managing legal issues
- Insuring a business
- Getting licensed and certified
Skill Level Beginner
Understanding Intellectual Propertywith Dana Robinson1h 31m Appropriate for all
1. Define Your Consulting Business
2. Marketing and Selling
3. Contract and Protect Yourself
4. Run the Consulting Engagement
5. Handle Administration
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