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.