Q: “I manufacture cosmetics and spa products, and have developed a custom line of products for a salon owner. I have not charged for the custom development work, and she now wants me to develop another line. I think this is a consultation, and that perhaps I should charge for it. What do you think? And how should I charge?”– Candance Sweeney, Nakee Natural, Jackson, MI.
dM's Answer: “Yes, it's a consultation! I faced this issue early on in my consulting business, especially as a new a cosmetics manufacturer. The challenge arose because I was a manufacturer, not a consultant. But once my products caught on, it was inevitable that others might want me to formulate for them. That's exactly what happened, so I had to wade through many of the same issues you are dealing with now to come up with a reasonable consulting fee. There are lots of things to consider, and here are some places to start.
- Highly value on your time and expertise. As small business owners, we must associate each minute of the working day with the pursuit of new sales and new relationships that facilitate them, either directly or indirectly. From prior experience serving this salon owner for free, you have an idea of the resources (time, energy, headache, etc.) you must invest in order to serve her and similar customers in the future. Consider all of these things when coming up with a consulting rate.
- Create packages. As your business grows and your products and services become more popular, word will spread that you are a helpful source of information. Consulting packages, priced based on the general needs of groups of prospective clients, allow you to incorporate bulk discounts for clients who purchase a lot of time, while charging a premium for those who want an hour here or there.
Packages also make it easier to effectively insert the fielding of consulting inquiries into your daily workflow. Forms, payment links and package descriptions at your website (looks like your left navigation bar is perfect for a “Consulting” link!) allow you to be even more efficient because people can sign up and pay immediately, or fill out a form so you can qualify them in advance.
- Prioritize the relationship. As you gently introduce the fact that your services are no longer free, you may wish to offer this client a price break. After all, she's been assuming that the consulting expertise is part of the finished product price, and that assumption is not her fault. Giving her a price break will help you get the new business as you also maintain the relationship.
There are surely more things to consider, but hopefully, this gets you off to a good start. Keep me posted on how things go, Candance. I wish you the best!” –dM
If this issue interests you, take a look at the suggestions and tips offered by others over at the INDIE social site.
Learn more about Nakee Natural. And check out her “Soap For Hope” Program, which donates the proceeds from the sales of limited edition products to charity. (I've tried many of Candance's products, including the Lemongrass & Sage soap and the wonderful whipped, creamy fair trade shea butter — they're great!)
Questions: What do you think of these suggestions? What would you do?
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