I have an increasing number of clients for my business consultancy (focused on nonprofit fundraising). As much as I was hoping to develop some economies of scale by securing several clients with the same needs, they all seem to be very different ... and require varying degrees of hours, energy, investment, etc
I am struggling with how to best structure my billing in a way that is most appealing to prospects and also the most profitable (and easiest to manage) for me. I have a somewhat visceral reaction to the idea of tracking hours and billing based on time ... my natural inclination is to bill by the project. But this has bitten me in the backside a few times due to scope creep (and my natural tendency to take on too much, as if I were an interim staff member).
I recently met a consultant who bills by the week; she focuses full-time on one client's project for a week at a time and bills them accordingly. This sounded appealing, but is untenable for me since I have multiple conflicts (i.e. I teach at a local high school three days per week and also have some standing meetings for other clients, so I can't dedicate a full-time schedule to any client). But I've been wondering if I could bill by the week and just tell the client it's a batch of about 4-5 hours per day?
What have you seen to be a good model?Bidding based on projects (my current approach)? Daily or weekly rates?
Or should I just grow up and bill by the hour -- and if so, how do you keep the client from feeling afraid of the running clock (or feeling nickel-and-dimed for every time they email or call you)?
Effective billing for business consulting services typically involves several key elements:
Clearly defining the scope of work: Before beginning any consulting work, it is important to clearly define the scope of the project and establish specific deliverables. This will ensure that both the consultant and the client have a clear understanding of what is expected and can help prevent scope creep, which can lead to additional charges or disputes over billing.
Setting clear billing rates: Establishing clear billing rates for services is another key element of effective billing for business consulting. This can be done by charging hourly rates, a flat fee for the entire project, or a combination of both. For example, a consultant might charge an hourly rate for research and analysis, but a flat fee for developing a strategic plan.
Communicating and tracking time: Good communication and time tracking are crucial for effective billing. Consultants should keep detailed records of the time they spend on a project and make sure that clients are aware of the time they are spending. This can be done by sending weekly or monthly invoices, as well as providing time sheets or other detailed records.
Billing in advance or on retainer: Some consultants choose to bill clients in advance or on retainer, which can help manage cash flow and ensure that clients are committed to the project. For example, a consultant might require a 50% deposit at the start of a project, with the balance due upon completion.
Being flexible with payment terms: Being flexible with payment terms can help ensure that clients are able to pay for services in a way that is convenient for them. For example, a consultant might offer a discount for clients who pay within a certain time frame or who pay via electronic transfer.
Offering different package options: Offering different package options can also be a way to make billing more effective. For example, a consultant could offer a basic package that includes a set number of hours of consulting, a mid-level package that includes additional services, and a premium package that includes even more services. This can help attract a wider range of clients and make billing more efficient.
Providing a detailed invoice: Providing a detailed invoice that lists the services provided, the hours worked, and the total cost can help ensure that clients understand the charges and avoid any confusion or disputes over billing.
Following up on unpaid invoices: Following up on unpaid invoices in a timely manner is important to ensure that you are paid for the services you provide. If you notice that an invoice is overdue, it is important to contact the client to find out what the issue is and to work out a solution.
