Name: Value-based fees
ISBN: 9780470275849

Value-based fees

In this thoroughly revised edition of his classic book, Alan Weiss shows how consulting fees are dependent on only two things: value provided in the perception of the buyer and the intent of the buyer and the consultant to act ethically. Many consultants, however, fail to understand that perceived value is the basis of the fee, or that they must translate the importance of their advice into long-term gains for the client in the client's perception. Still others fail to have the courage and the belief system that support the high value delivered to clients, thereby reducing fees to a level commensurate with the consultant's own low self-esteem. Ultimately, says Weiss, consultants, not clients, are the main cause of low consulting fees.

What Hacker News says

zerealshadowbanApr 2025

Consulting is the way to make money from specialized tools and code that you can't or don't want to turn into market commodity. Make sure you charge for the value you deliver to your clients, not the time it takes you to run your tools for them. Look into value-based consulting, e.g. the book "Value-Based Fees" by Alan Weiss. I've been doing this with my own tools and tailored code for a good decade, sometimes pulling in multiple 6-figure projects in a year. Good luck!

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wfhBrianFeb 2024

Value-based fees by Alan Weiss

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skydhashOct 2023

Getting Things Done by D. Allen: I don't really follow the methodology, but it taught me the importance of always having a clear task list for your days and projects you may have.

Value-based fees by A. Weiss: I was a freelancer and it taught me the importance of building a relationship that's more than just providing a service.

So Good They Can't ignore you by C. Newport: Got my head of the sand and makes me realize that no one really thinks that you're special. You can only get ahead with your project by being valuable (Not sure this is the exact message, but that's what I learned)

Atomic Habits by J. Clear: Helped me realize that big changes comes from small actions. So I always try to frame what I want to achieve in that way.

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mooredsDec 2022

I wrote a response to a similar question on an email list and turned it into a blog post:

If you are thinking about making the move from being an employee to consulting, I have some thoughts. First, there is a difference between contracting and consulting. Contractors are paid for what they do, consultants are paid for what (and who) they know. I have found it’s a lot easier to get contracting work than consulting work. (Of course, sometimes they blur together.)

If you are focusing on consulting, think about:

What is your source of work? Finding work is a big part of consulting. Options include:

    your network (it’s fine to hit folks up and say “I’m doing X, do you know anyone who needs it?”)
    past client
    courses
    a community presence
    books
    blog/writing
    advertising (though this can be easy to waste money on if you aren’t targeted)

I’m sure there are others. Think about and nurture this pipeline. Always ask happy clients for referrals. This is something you typically don’t think about as an employee (it’s someone else’s job). It’s part of your job as a consultant.

How will you get paid? This is the other piece of consulting that people jumping from employment don’t consider enough.

What will your terms be? Have a standard contract. Have buffer in the bank because there will be lean months; prepare for “feast or famine”. You’ll also need to be prepared to chase down payment. Doesn’t happen often and you can prioritize companies that pay promptly, but with what feels like an economic rough period ahead, companies will be stretching payment terms, esp to outside consultants.

Don’t expect to be paid when you do the work, 30 days net is typical. Use a solution like freshbooks (what I used, years ago, there may be better ones) to automate your invoices and possibly invoice nagging.

Sometimes you will be paid to do things that seem dumb and/or below your pay grade. Raise your concerns, but if you are told to continue, smile and do it. One of the joys of consulting is you are not really “one of the team” which can give you healthy separation from org problems you aren’t trying to solve.

You are not really “one of the team” with any of your clients. Esp if you are a one person show, this can be lonely sometimes if you are used to socializing with your coworkers. Not that they won’t invite you to lunch, etc, but there’s always an awareness that you are a hired gun rather than someone who is on the team. (They might try to recruit you, though. Be prepared for that.)

Taxes/ownership structure/insurance become a bigger thing. Find a CPA, preferably through a referral, and understand and set up the proper ownership structure and tax payments. Typically your tax burden will be higher, but you can write off more stuff as a business expense. You may need some kind of business insurance depending on who your clients are (Oracle made me get e&o, I carried general liability for a while). The nolo books are good on this if you want to get smart on your own, but you’ll really want a CPA in your court.

Think about if you want to be a one-person show or build a team? I personally never got past the one person show stage (though tried subcontractors a few times) because I didn’t want to manage and I wanted to do the work. If you are building a team, you will need to focus even more on bringing in work rather than doing it.

Consulting can be fun because you have control of your work and you get to work in different environments without switching jobs. It’s also more stable to have a few purchasers for your labor than just one (an employer). Think about what kind of work you want to specialize in, because the temptation (esp if cash flow is low) will be to take anything you can do (or maybe things you think you can do).

Spend time on professional development. That could be during the work day or after hours. Sometimes clients that know you will pay for you to learn something, but that is not typical in my experience.

If you have the time, create a course or ebook in the domain you are planning to consult in. This can give you some income, but the real benefit is to say “I wrote the book on X” or “I did a course on X”.

Think about passiveish income options. Courses or ebooks (as above) can offer that. So can productized services, web hosting, or access to a tool that codifies your knowledge. Don’t focus on this when you start, but having something like this will help buffer your cash flow.

Prepare to raise your rates yearly and with every new client. No one is going to give you a raise, you have to ask for one. I usually said something like “my new rate for next year is going to be X/hr, please let me know if you have any questions” in an email around this time every year. Be prepared for some clients to not be able to afford you, and to part ways.

Finally, some book recommendations:

    The Secrets of Consulting is required reading, covers about the people side of consulting which is really critical.
    Value Based Fees: How to charge value based fees rather than time and materials/hourly/daily. I never had the guts to do this, but it was eye opening to read about.

Here's the permalink: https://www.mooreds.com/wordpress/archives/3552

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mooredsJun 2021

Here's a great book about this topic: https://www.amazon.com/Value-Based-Fees-Charge-Youre-Worth/d...

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pboutrosSep 2020

I never thought I'd do sales. For B2B, read: - The Challenger Sale - Value Based Fees - Pitch Anything

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