The Value Equation for Consultants
What’s the #1 piece of advice you’re likely to hear if you ask how to raise your rates?
Increase your value.
But…what is value?
I’ve been thinking quite a bit about this, and have a simple formula that could apply to many consulting business:
((Money saved or money made)x(strategic value))/(percentage risk of failure)
In other words, the financial value of a project is (usually) fairly obvious. The greater the financial value of a project, the greater the total value.
The more the strategic a project, the more value it creates.
And the smaller the risk of failure, the greater the project is worth.
Here’s the take away: the more you’re able to increase the financial and strategic value of a project, and reduce the risk of failure, the more value you bring to your clients.