You Need Five-Figure Projects To Thrive As A Consultant
If you're trying to make a living on four-figure projects, you must be great at automation and ads. Otherwise, you need to charge at least five figures. Here's four ways to do it.
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Just an observation from two coaching clients: if you can’t secure five-figure projects (in Western countries), it’s very hard to thrive as a solo consultant.
The difference between four-figure and five-figure projects is enormous.
The most significant difference is that with four-figure projects, you often deal with people who own the company and feel they’re spending their own money (people like me, essentially).
They’re incredibly focused on the cost and getting ‘value for money’. Which is entirely understandable, but it can also be a complete nightmare.
When someone’s money is on the line—especially when it’s four figures—they’re far more cautious. They want to be 100% sure they’re getting the desired result, so they need a super high level of trust in the vendor. They often spend 5% to 10% of their annual profits on projects like these. That kind of loss isn’t something they can just ignore.
This creates several problems for consultants and freelancers.
The demands of lower-paying clients are higher. At the four-figure (or below) level, you often deal with the owner who (understandably) is very concerned about wasting capital. This means their demands are higher, they’re more likely to ask for revisions, and they are more likely to withhold payment if they’re not 100% happy. This means the effort-to-income ratio is a lot higher.
The marketing-to-reward ratio is lower. The sales process for a lower-budget client is often just as time-consuming as that of a big client. Attracting a small client usually requires as much time and effort as a larger one, but the payoff is much lower.
The risk of not getting paid is higher. Working with smaller organisations means the risk of not being paid is far higher. They might not pay you if they’re unhappy with the work - even if it meets the specifications. Yes, you have contracts, but enforcing contracts is a real challenge. There’s also a far more concerning risk…
The company might suddenly go out of business. Smaller organisations are prone to going out of business — often with minimal warning. Smaller organisations are usually asset-light. This means your likelihood of recovering any money in this situation is incredibly slim. You can sue the company, win, and receive nothing.
You need a lot of these contracts to thrive. You can work (and even thrive) at this level. But you must be great at automating much of the work and creating a turnkey solution. Then, you have to figure out how to stop competitors from imitating that for less - and in the age of AI, that will become more challenging.
In short, it’s possible - some people have (claimed to) build million-dollar businesses doing just this. But you’ll probably not be one of the outliers to succeed. It’s more likely you will attract four to seven clients a year and have a sustainable living.
There’s no shame in that - you still get the freedom to be your own boss, but it’s probably not what you were going for when you decided to become a consultant.
(Aside: I know many consultants take on subcontracts from bigger firms. This is an acceptable source of income but beware the benevolent king. They have a direct relationship with the clients, not you. They can lower your rate or cut you off at any time. You have very little negotiating power. You’re a contractor at this level rather than a consultant or freelancer. You have no realistic means to grow your business.)
How To Upgrade To Five-Figure Projects
If you want to make a good living—at least one that matches your previous income level —you need five-figure projects. You need to be playing in the $10k to $50k ballpark.
Option 1: Raise Your Fees (by using the price sensitivity approach)
I hate this generic advice, but it’s not entirely redundant - especially when you’re just starting out.
I remember one of my earliest strategy projects was for the RSPCA in the UK. I undertook a full strategy for them for £2.3k. At the time, I was so clueless about the market and insecure about my value that I undersold myself (I was also 25 and thought that was a lot of money back then). These days I’d charge 10x to 20x that figure. I quickly caught on however and began charging $10k to $15k for these projects.
This persisted continued for a few years until I was invited to a competitive pitch for a client. I casually asked what the client’s budget was (not expecting an answer). And the client responded the two other consultants had come in at the $45k to $60k range.
Woah!
Now, to be clear, this doesn’t mean I can take the same set of services/proposal and charge the same. I would be competing with clients who had a lot more expertise playing at that level. What it did mean was there was an opportunity to sell strategy projects at that level
But to compete at that level, I’d have to charge a lot about my consultancy and the projects we undertook.
Get feedback on your pricing
An important piece of advice here is to test the market.
In your client research calls, you can ask people what they think the services you’re offering should charge. Use the price sensitivity meter approach if you like:
At what price would you consider the service to be so expensive that you would not consider buying it? (Too expensive)
At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)
At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)
At what price would you consider the product to be a bargain—a great buy for the money? (Cheap/Good Value)
And explore this with different types of clients (the responses you get will be fascinating - believe me). You will soon get an idea of whether there is scope to charge more for your services.
You can also ask your network of allies what fees you should charge.
Option 2: Improve The Quality Of Your Work
The strategy projects I sold at the $2.3k, $12k and $60k levels are very different.
At the $2.3k level, I’d speak to a few stakeholders, review their work, and then write my strategy as a single document. This would take me about a month (not full-time).
At the $12k level, it was very similar. The end result was still a single ‘strategy’ document that was usually 30 to 50 pages long. The difference was that I included access to my courses, undertook additional data analysis, and conducted a pre-review beforehand.
At the $60k level, the work was different. Strategy wasn’t a single document now, but a collection of deliverables which included:
1) Comprehensive Analysis of The Current Situation
A review of the macro environment.
A review of the organisation’s needs.
Community benchmarks.
Community results.
2) Goals And Community Roadmap
Specific goals for the community.
Specific community targets to achieve (often presented as community OKRs).
Required member behaviours to achieve those goals.
The agreed community ‘strategy’ (optimization, adapting, repairing, replacing).
Short, medium, and long-term roadmap (typically, 3 months, 12 months, 24 months) showing key initiatives.
The resources required at each stage.
Stakeholder workshops.
3) Action Plan
A community playbook.
Technical specifications, design, and configuration requirements.
Training and resources.
4) Operations and Governance
Community organisational structure, roles and responsibilities, individual staff progression, and budgeting for now and in the future.
Governance Policy.
A risk analysis.
5) Measurement and Improvement Framework
Methodology to measure the community’s north star.
Measurement framework.
Improvement framework.
You get the point. I couldn’t simply increase my fees and charge more for the same paltry offering. Instead, I significantly expanded the scope of work to offer more value under the banner of ‘strategy. ’
Instead of a single deliverable, we now have five - each, which covers a range of things.
In short, it’s a much bulkier piece of work and takes us several months to complete.
Option 3: Target Organisations Who Can Afford The Fee
The final aspect of this (and the hardest) is targeting organisations who can afford your higher fees.
At this level, you need to:
Improve the quality of your proposals. You can’t rely on the Alan Weiss two-page templates at this level. You need to write more detailed, far better proposals.
Improve the design of everything. You need to invest in high-quality design with set templates for every step of the process.
Know how to sell consultancy projects. You need to know how to sell five-figure consultancy projects and handle tricky negotiations about fees.
Have a better website. You need more than a pamphlet website. It should be a resource-rich website designed for the enterprise level. You need to know what prospects expect to see on your site.
Build your personal brand. It’s very difficult to make solo outbound sales to enterprise-level clients. The people you approach need to know who you are, so you need to build your personal brand and learn to leverage that to attract clients.
(Aside from that, several new consultants in my space have asked me what I charge to charge a similar amount over the years. Unless you have the same background, experience, and scope of services, that’s a bad idea)
Option 4: Solve Bigger Problems
Thus far, we’ve covered raising your fees, improving the quality of your service, and targeting enterprise organisations.
The final option is to solve more significant problems your customers face.
The amount you earn is usually tied to the problem you solve.
You need to be able to identify bigger problems and
This includes:
Aligning your services to bigger issues organisations face. Investigate where organisations spend most of their budget in your field and identify what more critical problems you can solve.
Asking $100k questions vs. settling for the problem you’ve been given. Ask questions in the sales process to solve the real problem and not just its symptoms.
Become an expert on solving big, expensive problems. Discover how other organisations solve these problems and sell this expertise and solutions to others.
Simply being able to offer more value is always a big win.
Good luck!
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