Day rates and focusing on #doingthework
I donât like talking about money. To me, money just something that has useful exchange valueâââmeaning I can continue doing things I enjoy. Although, inevitably, Team Belshaw has greater outgoings than when my wife and I were newly-weds, our aim isnât to live some opulent, extravagant lifestyle.
Last year, when I became a consultant, money was suddenly something I had to talk about a lot. Previously, when I had the safety blanket of a monthly salary, I didn’t need to concern myself on a regular basis about my income as I was guaranteed to get the same amount for the duration of my contract. Not so, obviously, with consulting.
One approach to negotiating a day rate or a fee for a piece of work is to haggle. I’ve got no problem with other people using this approach but, for me, I feel it begins the relationship with a new client on the ‘wrong foot’. I’d rather get that bit out of the way as soon as possible.
The other thing to say is that, unlike when you’re employed, the fantastic thing about being a consultant is the ability to turn work down. My rule of thumb is that I want to do interesting work with awesome people. If I feel like the work’s going to be boring, or the people difficult to deal with, then I’ll walk away. I’m aware that this may sound slightly arrogant to some people, but I’m a big believer in Derek Sivers’ approach to life.Â
I’ve recently had to become VAT-registered, which adds an extra complication to my day rates. However, I want to keep things as simple as possible. This means I’ve effectively got three tiers:
- standard rate
- minimum rate
- pro bono work
As I outlined in this post, I’m dedicating 12 days to pro bono work in 2016. My standard rate applies to every piece of work I do, apart from charities, non-profit, and educational institutions.
I’m not entirely inflexible. If, for example, a client wanted me to videoconference into an event, I would charge them a half-day rate. I’m also enjoying an approach I’ve trialled recently where I charge clients a full day rate, but then divide this up into hour-long chunks so I can offer consigliere-style advisory services to senior leaders.
While I’m sure my thinking will evolve on this issue, right now I’m happy with this approach. Sometimes it means I’m going to have to turn down potentially-interesting work with great people because it falls between two stools. So be it. The last thing I want to be doing is thinking about money instead of #doingthework!