As a consultant for brand development, you help clients create and communicate their unique value proposition, identity, and personality. But how do you set your hourly rate for this kind of work? In this article, you will learn how to determine your hourly rate based on four factors: your expenses, your income goals, your experience, and your market value.
The first factor to consider is your expenses. These include both your personal and business expenses, such as rent, utilities, taxes, insurance, software, equipment, travel, and marketing. You need to cover these costs with your income, so you should calculate how much you spend on average per month and per year. Then, divide your annual expenses by the number of billable hours you plan to work in a year. This will give you your minimum hourly rate, or the break-even point.
From my own experience, the best way to determine your hourly or daily rate is to base it on your last salary. Then add extras-admin costs, personal tax and expenses. However, as an adviser, what I found the most challenging is to stick to agreed deliverables. It is very easy to be drawn into time-consuming tasks by the client. For that reason, I always have a document we call a Masterplan. Essentially, it is a critical path of deliverables, who is responsible for each task and the time scale of the project. Clients understand this easily especially in case we get off the agenda of agreed deliverables.
The second factor to consider is your income goals. How much do you want to earn as a consultant for brand development? What kind of lifestyle do you aspire to have? How much do you want to save or invest for your future? You should set a realistic and specific income goal for yourself, based on your personal and professional aspirations. Then, divide your annual income goal by the number of billable hours you plan to work in a year. This will give you your target hourly rate, or the desired amount.
Wise entrepreneurs design their lives first before their business. Easy to say but hard to achieve. I am guilty of putting my start-up first. Eventually, after raising funding and scaling up we exited to a market leader. It was a crazy journey with major ups and downs. Of course, as a first-time founder, I gave it all, failure was not an option even in some situations when most people would pull the plug and move on to something else. Since then, my approach is different. I found the most important thing is to respect your time and start a project by creating a team of people whom you can delegate. Instead of relying on yourself to do everything. My most valuable time is thinking and strategic planning.
The third factor to consider is your experience. How long have you been working as a consultant for brand development? What kind of projects have you completed? What kind of results have you achieved for your clients? How do you demonstrate your expertise and credibility? Your experience is a key factor that influences your value and reputation in the market. You should assess your level of skill, knowledge, and performance, and compare it with other consultants in your field. This will help you determine your competitive advantage and your market rate, or the average amount.
I found that clients respond the best to my experience. This gives me the authority and advantage where many advisers are talking theory without having "been there done that" kind of experience. After starting and exciting multipole business, I can relate many challanges to a specific experience and build a solution from there. Not every experience is 100% relevant, but I can always use some aspects of it to start the conversation. In my current start-up, there are three co-founders. We advise founders from idea to exit in F&B and food technology. What makes us different (our USP) is that we all run and exit our businesses. This is a real example of experience giving us an advantage and competitive edge.
The fourth factor to consider is your market value. How much are your clients willing to pay for your services? How much do they value your brand development solutions? How much demand is there for your niche and specialization? Your market value is a dynamic factor that depends on the supply and demand of your services, as well as the quality and differentiation of your work. You should research the rates of other consultants in your market, and adjust your rate according to the value you provide and the problems you solve.
By considering these four factors, you can determine your hourly rate as a consultant for brand development. You can use this rate as a starting point for negotiating with your clients, and as a benchmark for evaluating your profitability and growth. Remember, your rate is not fixed, and you can always change it as your circumstances and goals change.