Many small businesses’ IT companies make bad decisions when setting their computer consulting rates, mainly because they don’t size up the competition.
It is critical to understand the competition to make sure not only that pricing is competitive, but also that revenue is being maximized. Many consulting companies struggle to determine the accurate rates for the services they provide due to the fear of losing potential clients when the business is smaller, still trying to grow, and thus submitting low offers.
In order to truly succeed as a computer consulting business, it is important that the rates being charged are neither too high resulting in lost business opportunities, nor too low resulting in lost revenue potential and credibility.
Analyze the Competition
It is fairly easy to get a basic understanding of what most businesses charge via simple research.
Using Google, look up and find the top ten companies that are close to your location and provide similar computer consulting services.
While some consulting businesses are very transparent with their pricing, others are more reserved.
If you must, call and inquire about services and learn more about the pricing structure and what is provided. Your mission: determine the optimal computer consulting rates that can be demanded.
Gather this Data from Competitors Before Setting Your Business’s Computer Consulting Rates
Hourly consulting rate?
Hourly or fixed-rate pricing model?
Number of clients?
The size of clients (small business / Fortune 500)?
Specials / Promotions?
Want to get extra credit? Track this data in a spreadsheet and update it annually.
There are many more elements that are important to learn about the competition in detail, but to really gain an understanding of the market, these basics should help quickly gauge the going rate for computer consulting services in a specific region.
How do you go about setting your firm’s computer consulting rates? What factors matter most? Please share your thoughts in the Comments below.
And to follow-through on the tips introduced in this short article, be sure to watch the Inbound Revenue Acceleration Webinar for Managed Services & IT Consulting.
Creative Commons Image Source: flickr [puamelia]