Much needed awareness-raising of service remuneration

Often, as a business consultant, I meet with people, who in their entrepreneurial position find it hard to get their rendered services paid. And I mean paid for the so-called ‘value-for-money‘. When discussing this further, I notice several problems: either one

  • grabs an at-random number out of the air - one that sounds solid enough but does not justify the product
  • companies assume that services from contractors are merely a hobby.

The phenomenon should not be underestimated, for it is rather rampant: Tackling the former, there are a few underlying reasons; one tries to be affordable, out-pricing the competition (not daring to ask more?) or one has hardly made a thorough calculation, how much your product costs you. Do not forget, you need also to prepare, even educate yourself further. Needless to say, you need regularly ample rest to avoid becoming fatigued or over-stressed yourself, which could then negatively influence the quality of your output. And in these periods, you also should be able to pay your bills.

Moreover, your service brings added-value to your customer. The customer – provided they implement it correctly – have a long-term benefit after all. Even long after you have left. Why then nibble on a few cents here and there off your hourly rate? Not to mention, that some (big) companies seem to enforce payment terms more than 60 days (why is a contractor regarded being less important than an employee?).

We have seem to lost a sense, that work needs to be paid, regardless whom it concerns. Either you receive a tangible product or something intangible like know-how or your leaking bathroom pipes get fixed. Yet all have certainly a value. Why is it then normally fully accepted that e.g. a lawyer - completely regardless of outcome! - gets several hundreds of euros/dollars per hour for his time without a blink of an eye, whilst a consultant with a positive outcome to your organisation must beg for his money? Every profession deserves equal recognition. Just remember that those at the receiving end were not the beggars – it was you, who needed their service in the first place and they provided it to you.

Start-ups: beware of the overrated pitching-gospel
Toxic Management assumptions... don't!

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