Understand your revenue model

- Your revenue model explains how you make money.…You need to determine how to charge for the services…you're offering and what services you'll charge for.…There's a big difference between…a fee for service consulting model,…a project-based model, and per unit pricing models.…Fee-for-service gets you an hourly rate.…The upside of this model, is you get paid for your time…so if the project expands, you get paid more money.…The downside is there's pretty much a cap…on what you can charge per hour.…

You get no benefit from being more efficient.…For project-based revenue models,…there's a one-time fee for the entire project.…The upside of this model is,…if you're more efficient, you're more profitable.…But the downside is,…if the scope of that project creeps,…your economics on that project could be terrible.…For unit-based pricing models,…you get paid per unit of output.…I run a leadership training firm.…We charge on a per participant basis.…

Every additional person in the classroom we make more money.…This enables us to do value-based pricing,…