100 comments to celebrate 100 IT Consultant posts

In honor of his 100th IT Consultant column, Chip Camden highlights 100 member comments that made him think, laugh, or both.

36. Igor Royzis's comment about 10 personality traits of a highly effective independent consultant: RE: 10 personality traits of a highly effective independent consultant

How about being a good listener, ask the right questions and knowing when it's time to suggest possible solutions. Some consultants don't listen enough to ask the right questions and they jump into a proposal stage.

37. PMP'sicle's comment about Six questions to ask yourself before expanding your IT consultancy: You've barely hit the beignnings ....

There are a lot of questions involved ... bluntly put you really need to do a strategic analysis including the potential issues.

Without giving away the farm (TrainingNOW teaches this stuff). Some of the other questions you need to answer are ....

Are you comfortable selling including cold calling? Remember that as a company you will need to keep more than one person busy which means you need to be out there drumming up business rather than letting it come to you. Unless you've got Expert Marketing down pat! In which case you will be fully occupied doing that. This level of selling is different than the occasional sales call we make as independents.

Is your market open to dealing with the little guy? Some markets only deal with the big boys. And they only deal with individuals. On the other side, other markets may open to you ... do you know what they are?

Are you comfortable with accounting information? As a one man shop you can handle the books yourself and only pay attention to the key indicators (e.g. money in the bank). As a bigger organization you need to be able to understand things like cost per chargeable hour, fully loaded cost per hour etc.. You accountant will tell you what he understands you to be asking for but remember that they operate under different rules than you and monitor their costs differently. If you don't explain what you want correctly you'll get a correct answer ... just not the one you need.

Are you prepared to give up the technical stuff? If you're selling, managing and administering other people you're not going to have time to keep up your technical skills.

Do you have project, operational and strategic management skills? Three different attitudes and three different skills sets ... as a business builder you need them all until you're large enough to hire those skills (as overhead).

Are you knowledgeable about risk management? Can you develop the risk profile of your alternatives. There are increased risks and decreased risks involved.

I could go on but I'm going to stop now.

38. herlizness's comment about Four strategies for dealing with vendors who don't talk to consultants: maybe ...

in some cases that might be ok ... but look, how crazy is this kind of stuff going to get? I either have authority to do work or I don't; now I have to pretend to be an employee when I am not an employee? Personally, if I were the one who'd hired the vendor I'd tell them to work with my designees or be gone. When I give someone authority to do work on behalf of me or my company, in legal effect, they ARE me or my company.

There comes a point where people have really do have to start behaving like adults. If there is a legitimate problem working with someone, the vendor needs to address it promptly and forthrightly.

I'm just baffled by this stuff; when I'm wearing my lawyer's hat, I have no such problems ... acting on behalf of a client, if I notice someone for a deposition or send a demand letter, I've yet to have someone fail to respond or to even think about questioning my authority to act on behalf of that client. Why should it be any different for a consultant?

39. arstringfellow's comment about Insurance for independent IT consultants: Policies to consider: Professional Associations

The best solution I have found to the health insurance issue is to join a professional association that offers access to group healthcare benefits related to your industry, or to work with an employer-of-record, such as MBO Partners, http://www.mbopartners.com , which also handles invoicing and offers networking opportunities, so there are other benefits to doing that sort of thing as well. Plus, since they are an employer-of-record and give you a single W-2 at the end of the year, I believe that it alleviates the necessity of carrying some other types of insurance required for business owners.

40. mikifinaz1's comment about Harassed for attempting to transition from employee to consultant: Too much information...

He failed his first test for a consultant.

41. Marty R. Milette's comment about Harassed for attempting to transition from employee to consultant: A blog that would raise a big ruckus...

If you want to pick a topic that would be 'active' -- do one on whether or not organizations like:

http://www.hireamericansfirst.org

http://www.programmersguild.org

http://www.washtech.org

have any place in today's IT industry.

Better wear your flame-proof undies -- that would be a HOT one...

42. medfordmel's comment about Harassed for attempting to transition from employee to consultant: The real follow-through

Your posts point out a lack of loyalty in employees.

It took me a long time to get over my loyalty to my employers. I think it was somewhere around the 4th time I was laid off. That's when I learned that I had to look out for myself and my family, because it is obviously not my employer's responsibility. That's also when I went out on my own.

Employment in most states is at-will. They can (and do) terminate your employment at any time for any reason, or without reason, for that matter. Just on a whim - or more likely shareholders' whims - they can send you packing and leave you and your family worrying about from where your next meal might come.

You refer to both employees and customers as assets, just as valuable as any other to a company, and I applaud that. That's the way it should be. As with any asset, however, there is a value.

Perhaps rather than restricting trade by non-competes, it might be a better idea to place a value on the investment in your employee, with a contract calling for the pro-rated repayment of training expenses paid by the employer on behalf of the employee - the employer's only true investment in the employee as an asset.

I've seen posts in here claiming the "investment" in the employee's pay and benefits. That's not an investment in an asset. That's the ongoing expense of having those services performed. If your compensation and benefits package are COMPETITIVE, this is a non-issue. It is a function of the marketplace. For any employee, you will have to pay them for their services. For any employee, you will have to provide benefits, both to comply with labor law and to compete in the marketplace with other employers. The value of this package generally determines the quality of the employee, unless there's a problem in your hiring process.

Training is an asset, however, and all costs associated with training should be recoverable on a pro-rated basis. Your employment agreement could provide for that, instead of restricting the employee's ability to work. For each training, the employee could sign an agreement indicating value, and a vesting schedule. It helps the employee to see the actual value of the training, as well. Then, they do feel vested, and understand the exact cost should they choose to move on prior to being fully vested in their training.

If your company provides training in-house for a position, chances are that you have hired someone inexperienced, to receive services at a cost below market value. In this situation, your training is an asset to the employee, which could be repaid on a pro-rated basis by contract. Keep in mind the money your company saved by hiring someone that needed training, however.

No company should never become dependent upon any single employee, either. To protect themselves, there should be cross-training, and clear, thorough documentation is absolutely essential. This should be a requirement of any employee or consultant. This also has value, and should be compensated, and included as a deliverable on any project.

If you treat your employees, vendors, and customers fairly, and enter into reasonable agreements to protect your assets, you generally don't need to take extra steps to restrict trade. If you find that you do need to take these steps, you may not be doing business ethically yourself in some respect, and these extra steps become necessary to protect that.

These are truly the practices that require a little more work, but they pay off. Stealing is easy, but so are non-competes. This is the real follow-through.

43. agonzalez's comment about Harassed for attempting to transition from employee to consultant: RE: Harassed for attempting to transition from employee to consultant

Wow, a valuable lesson indeed. Im in the other side of this situation (Im the boss or at least they call me that), I have 8 people working with me and we do a lot of outsourcing for software development but we dont have the policy to retain people or take people from other firms. What we do is add a clause in the contract: If any of the two companies like an employee and want to hire all that is needed to do is ask, we know that the professional development and personal growth comes first and we have no right to take the opportunity away, especially if they cant grow up more in the company. Taking good experiences from doing that: we have excellent personal (developers and tech support) and find out that previous workers are improving in their life (professionally and personal).

44. JohnMcGrew's comment about Harassed for attempting to transition from employee to consultant: That story is kinda funny, actually

If the employer considered Mac_IT_Guy so valuable and vital to the enterprise, they obviously didn't make him feel that way. I'm always amused when people who don't treat people well are surprised and upset when their most valuable people jump ship. (do note that the non-valuable people rarely jump ship)

I'm glad it's worked out now, but am curious if he ever sought a legal opinion regarding the possibly actionable damage caused by the former employer. Since he was at-will and there was no contract to break, the former employer had no right to do what he did.

45. Tony Hopkinson's comment about Do IT consultants need legal protection from competition?: Gave it to them ?

Did you say gave ?

Businesses do not grow and create jobs.

They grow and create demand for labour, the difference is subtle, but easily recognised, as the first thing a business does when growth stops through one factor or another, is to reduce jobs in order to keep growing profit.

You talk as though a business is a person, he does this, he does that.

No it doesn't. The people who own it, run it, or work in it may do those things.

The the deliberate misconception that a business entity is somehow equivalent to an individual, was created legislatively for one reason alone. So human rights could not automatically supercede a powerful elite's little earner.

Now take a wild guess at who payed for that piece of legislation.

No I don't have the right to steal your (the business) stuff. You (the business) don't have the right to go around stamping "mine" on everything not nailed down either.

46. dragosb's comment about Do certifications help IT consultants attract business?: In my opinion certification is like fashion

And yes, we have to agree that if you are ?fashionable?, you have success.

On the other hand, think at one of most wanted certification: driving licence. Yes, you need it to drive, but when you have it, is this means that you are an expert in the area? (Think only at the number of people killed on the roads!) And also, when you become an expert, after 10-15 years driving without incidents, I?m not sure that will be able to pass the driving examination without problems.

47. oldmikie's comment about Do certifications help IT consultants attract business?: RE: Do certifications help IT consultants attract business?

Sorry Chip is wrong. The problem most people have with certifications is that they assume if you are certified you are good. That is not the critical reason to certify. Certification is not a performance or marketing issue it is a data dictionary issue.

Certification in large, distributed, networked, web based (and what environment these days is not) projects or enterprises ensure that the perform teams are speaking the same language. When the team is reviewing specs from multiple vendors, current state analysis, or future state estimates you want to minimize the confusion as much as possible. Certification is the easiest, cheapest, and most standardized way to do this.

48. Tony Hopkinson's comment about Do certifications help IT consultants attract business?: Well in my own case

Its technologies that put me on the radar, not certs. Then they look at my experience (well sometimes, I've lost count of the number of times I've got a hit for a junior to intermediate role). Only people who don't actually want me, ask for certs and degrees.

That's development though.

If I was lucky enough to persuade my employers to resource me a junior or two.

Degree, would be mandatory (that's policy for a junior anything), and cert(s) in relevant tech(s) (that's my judgement not a HR muppet's) given no experience would definitely swing me to interviewing.

Course if I then find out it was drivel...

Kitchen sink advertisements are prevalent in the UK too, I don't worry about it though, they are from HR, and their judgement as to someone's technical ability or potential in any thing except HR (if you are lucky), is well lacking...

49. apotheon's comment about Are you doing IT consulting work you enjoy?: #7 and #8

"What questions (besides what I've already spelled out) do you typically ask yourself before signing on with a new client?"

7. I prefer to work on projects that further some goal or purpose of mine that isn't necessarily linked to my career or personal enjoyment, too. Probably the most obvious and important of these are:

A) doing something to make the Internet a safer, more secure place in general

B) providing any code I write under a [url=http://copyfree.org]copyfree[/url] license

8. I prefer working for clients whose attitudes are conducive to me helping them out to the best of my ability -- because it's my belief that the mark of a true professional is that (s)he works toward the day the work (s)he does today is no longer necessary. I'll accept jobs where I can't really help the client achieve greater autonomy, if need be, but given a choice between that job and another where the client is receptive to improving his or her own autonomy, I choose the latter.

I'm sure this seems counterintuitive to many consultants who always look for the return business, and believe the best way to get it is to do work that will ensure the client asks for more of the same later. My preference, though, is for a client to come to me with something new he or she wants done, because after having been liberated from a treadmill of having to solve the same problems over and over again he or she has the resources and time to do something to enhance the business even more.

In other words, I find the notion that a client is best handled by ensuring the client keeps coming to me to solve the same problem to be just as problematic as the broken windows fallacy: sure, breaking windows ensures that glazers and window-hangers have more business, thus promoting more economic activity ("stimulating the economy"), but if the windows weren't broken the resources spent on replacing them might instead be used to add value, rather than just replace it, and still promote more economic activity in the process.

50. Locrian_Lyric's comment about When the right price for software is zero: Freebies *and* volunteer work.

1)Shore up a resume:

If my resume is weak in an area, or I haven't used the skill in a while, I'll give out a freebie or volunteer. That way I have something to point to for recent experience.

2)Making contacts/networking:

Another good use for freebies is to make contacts and build good will out there. While it may not bring in business for the short-run, good will can be cashed in later.

3)Teasers and "look what I can do" items:

If it's quick, clever and limited in scope, it's free. As you said Chip, it's a great door opener for the BIG BUCKS.

51. apotheon's comment about When the right price for software is zero: one of my favorite tactics

Provide free (as in [url=http://copyfree.org]copyfree[/url]) software, then offer a paid service that enhances the value a client gets from that software. I'm always looking for opportunities to do that sort of thing.

52. daria's comment about Balancing client communication with the flow of productivity: RE: Balancing client communication with the flow of productivity

One of the things that might be equally impornat is making your work transparent for your clients. That is givving them insight into where you team stands at. There's a number of tools that make this possible. For example, tools like Wrike make it possible to work with clients in a shared workspace.

53. Vitreketren's comment about How IT consultants can become mentors: RE: How IT consultants can become mentors

Even though I've been in the Army for some time (working as a Computer Tech) I've found many people to help mentor along the way. I've found that the advice that I give out along the way has helped my 'customers' fix many of the problems that they would have earlier called me, allowing me to work on further development projects or just get to other 'customers' problems quicker.

When I've worked with units in the Army I usually find one or two people in a unit that are more technically advanced and allow them to solve the problems within their own unit. It makes issues easier to deal with when I only need to talk to a few more knowledgeable people about the issue, rather than having to work with people that are clueless about their computers (an experence that I'm sure makes many people quiver in disgust).

I'm usually the only 'IT' guy in my unit so while I've got coworkers that work on many other electrical systems, I'm the only person fully qualified to come up with solutions. With this in mind, I've gotten good at mentoring my fellow coworkers to reduce my own workload.

I really enjoyed this article and think that many IT presonnel should read it, as I've found that in this feild we often lack the fortitude to share our knowledge, affraid that we may work our way out of a job. But if you're in a situation where you're fealing overworked and/or understaffed, you'll realize sometimes its good to pass some of your knowledge down to your users.

54. IT.Consultant's comment about Search online for IT consulting mentors: The first person I added to my list of mentors ...

once I moved into healthcare consulting was my former manager at my first client. That was over 2 years ago and to this day, we still keep in contact.

Like me, he began his career in healthcare as a consultant for many years before working as a government employee for 20 years. He retired just after my contract ended. He was not only a beacon of insight and guidance, but also a source of inspiration. To this day, he still speaks highly of and refers me whenever he can.

Since then I have found another mentors, though none could ever replace him. One thing I have found is that you really can't have a surplus of mentors. Most mentors I have had specialize in a few areas and sometimes, you can take bits and pieces of what they share with you and make it your own. The best ones never force their opinions on you and are the ones from whom you learn just by being around them. But they also leave you something to weigh and consider so that you can make decisions for yourself.

55. apotheon's comment about Boost your IT consulting business with your friends' help: in their best interests

Actually, it may well be in their best interests. If you have more business, you stay in business, which means they get to keep availing themselves of your expertise. People have a tendency to imagine everything's a competition somehow, and act accordingly -- which can be counterproductive for their interests, because often cooperation is more productive. So . . . I wouldn't say it necessarily isn't in their interests to help a consultant they like get more business. I might, however, say that they think that's the case, and will act accordingly.

It's kind of a subtle difference, but an important difference nonetheless.

56. IT.Consultant's comment about Aligning an IT consultant's abilities to the potential client base: Another example of the great "specialize vs. generialize" debate

After thinking about my own question at the end of my previous post, I believe that I can answer both our questions.

The key to broaden vs. deepen is to practice both, but in different ways. To me " broaden" means "generalize across some dimension" while "deepen" means "specialize in some area". So, using this approach, one could specialize in one area (e.g. software development) while generalizing across industries (e.g. healthcare, alternative energy, non-profit).

Or use the inverse approach. For example, I really like healthcare. Although I got my start in the field as a software developer, I could use my domain knowledge to enter other areas such as technical writing, business analysis and even project management.

Another friend of mine is a top-notch business analyst, but she has spent the last part of her career playing this role in various industries (e.g. healthcare, financial services, telecom).

Another option is to specialize in a technology (e.g .NET), but generalize by geography (e.g. San Diego) as many traveling IT contractors and even consultants from top-tier consulting firms do. Or if you love one city so much that you'll do anything to stay there, then you can try the inverse.

Use "broadening" or "deepening" at the expense of the other presents many problems.

If you overbroaden, then you risk:

1) looking uncommitted because it seems like you don't know what you like to do (even if you are good at everything)

2) losing opportunities because clients don't understand your competitive advantage or feel that don't understand their needs enough.

3) appearing money-hungry because people may assume that you're just chasing after big technology "jackpot" or the fad of the day.

4) not being able to charge higher rates because you're not perceived as an expert.

Someone who tries to be all things to everyone succeeds only in being nothing to anyone.

Overdeepening can create different, but equally dangerous problems because you risk:

1) appearing rigid and inflexible to prospective clients because you choose to stay in your comfort zone.

2) losing opportunities because you're so focused on your area of expertise.

3) failing to miss the changes in the "big picture" changes in the macro-economy.

4) not being able to charge same higher rates as before after switching to another area.

The business world is survival of the fittest and very often the most flexible survive.

The best option is to strike a balance between broadening (generalizing) and deepening (specializing). That way, you don't become irrelevant today or obsolete tomorrow.

Depending on the person, the balance may lean on one side more than the other, to varying degrees. But, the important point is that practicing both is a healthy long-term career strategy.

57. Marty R. Milette's comment about Aligning an IT consultant's abilities to the potential client base: What Am I?

These days I call myself a MOSS Architect (SharePoint), but as has become painfully clear -- this really means a lot of different things to a lot of different people.

Here is a good post on the topic: http://www.snipurl.com/moss-skills

At the higher-end of the billing range, clients expect you to be both broad and deep.

It seems like I need to re-invent myself on every new project. Sometimes doing pre-sales and more of a business analyist role, other times documentation, other time courseware development and training -- and even a few times putting the pizza boxes into the racks and physically building the systems I designed.

I have yet to meet ANYONE who can honestly claim they are an expert in everything -- there is just TOO MUCH to know.

For me, the most important factors to success (and an endless supply of future work) have been:

- Excellent references. Including not only technical skills, but also business skills, communications and plain old ability to hit the ground running and 'get on with it'. I ask for a written reference at the end of each contract -- many contractors don't bother, but it is a HUGE benefit to have them.

- A portfolio stuffed with 'sanitized' samples of documents created. Being able to say, 'ya, I did that' takes on a whole new meaning when you can SHOW that you DID that.

- The ability to say NO, and turn down work. Yes, you may be able to squeek through on a project by learning the missing bits as you go -- but these days, (at least in the UK), there is such a high demand that you don't have to wait long for a project that is an excellent match and that you can excel on.

I tell friends looking for work to do the following:

1. Pick the job title for what you'd love to be/do.

2. Go through all the job postings with that title and build up a list of expected knowledge, skills and experience.

3. GET the knowledge, skills and experience that are in demand.

4. While you are working on 3, don't think it is 'beneath you' to be racking those servers when necessary. Clients really love it when they don't have a prima-donna on their hands and can count on you to help out and get your hands dirty when necessary.

58. DanOnTheHunt's comment about An independent IT consultant's code of ethics: Common place

I was an IT contractor for two and a half years and have been in charge of managing groups of IT contractors and this type of situation is all too common. I think that the simple problem is that there is a preconceived notion that you can't say "I don't know" in I.T. I read article that started, "just because I work in I.T. doesn't mean I can fix the coffee machine." I personally try to do the opposite. I like to error on the side of caution when asked about my experience with something.

59. reisen55's comment about An independent IT consultant's code of ethics: Honest Time and Work

If I am a client's office, as I was this morning, and running GHOST on a system to make an image, my actual "work" period is far from an hour, and if I am totally honest with myself consists of booting the system off the GHOST cd, typing a few commands, moving a mouse, executing and getting coffee for the half hour or so. Now on one computer, that is honest but if I am doing that on 16 computers, my real WORK time is instead of 8 hours perhaps 2. Pardon me folks, but I bill for the 2 Hours. If I can find other work non-related, OK there but I have an ethical consideration for my own ethics to bill honestly for my work as well.

60. cmaritz's comment about An independent IT consultant's code of ethics: made me think of a humourous exercise ...

Try writing the code of ethics of a supplier that you dealt with, based on your (negative) experience of them. Perhaps re-write their logo or catch-phrase, e.g. I dealt with a bank some time ago whose line was "Simpler, Better, Faster". However my experience with them was definitly "More complicated, Worse" and "Slower".

On a more serious note, ask your customers to write what they think your code of ethics is, based on their experience of you.

61. canIberichnowplease?'s comment about When your IT consulting client wants you to "buy in": If the shares are "sure to be worth big bucks"

... pay me the cash now and keep the big money in the future for yourselves.

I've had the "share" offer twice and rejected it both times. One key reason is that the owner always has a significantly inflated value of their idea. My $150 per hour for many months worked out (in his mind) to be worth about 0.5 % of the company. Given the company had no assets, no revenue, a couple of years before the first client and no serious financial backing at the time, I thought my effort was worth at least 25% !!!

On the other occassion I was wary that the person concerned was not one that I would want as a business partner. I was happy to perform a specific and detailed task and be paid. I didn't want to share a lot of time with this person.

Luckily in both cases I didn't regret it in hindsight.

The danger is that every now and then, someone becomes a gazillionaire from taking such risks!! They go off and buy football teams and very large boats.

62. price's comment about Customizable IT consultant sample contract: Arbitration...is it worth it?

You may want to check local laws and speak with an attorney.

Some jurisdictions will weigh the cost of arbitration, which can be expensive, v. the cost of the service or product. In some instances, arbitration clauses have been deemed invalid because the amount recoverable is less than the cost of arbitration.

Also, if you do use an arbitration clause, create a statement that lets the other party know who will pay for arbitration and which arbitration rules you will follow during the proceedings

63. santeewelding's comment about Customizable IT consultant sample contract: Nope

The one that "lets you have control" is the one I won't go near. It's contractual, remember.

64. PMP'sicle's comment about Giving IT consulting clients realistic estimations: Estimates and Pricing ....

First ... that's an excellent calculation for estimating time. People tend to forget the estimator's error. I congratulate you. The only part (formally) missing is that of when you are estimating and the efficiency factors.

Studies have shown that engineering types (IT included) have a tendency to underestimate the length of time needed to complete a task.

In addition, standard engineering practice, has identified a rolling error of (-50/+100%, -25%/+50%, and +-10%). Studies on IS have confirmed that this applies to IS (and presumably IT) as well -- at least when identifying the workload (i.e. not time). HOWEVER, those studies have also shown that the person doing the work has an influence of +500% when compared to the best person. Since we tend to have our best people do the estimate, the estimate tends to reflect their speed.

In short, our chance of getting a reasonable estimate when doing a team development is zilch.

With independent consultants fortunately, we're typically not estimating other peoples' time. If we are then we need to include some form of adjusment for the team efficiency.

All of which comes down the fact that you need to include the following errors (variances) in any estimate:

1)knowledge of situation/timing of estimate (in theory built into PERT but often not)

2)project risk factors (built into PERT and also in your U factor)

3)"low-balling" tendency (+20% and no-low varation of PERT).

4) estimator reliability (your R factor)

5) efficiency factor (which isn't covered).

6) decision efficiency (i.e. how will scope change management overheads affect the estimate)

Since you covered 4 out of the 6 influencers, you've done a great job with your calculation.

HOWEVER, I do need to comment that this is a cost estimate. In the case of a fixed price quotation, you need to estimate this to decide if you want to bid or not.

Remember also, that your client is intending to transfer the risk to you (that's why they want the fixed price). You need to consider this as an extra part of the cost. You need to be compensated (think of it as buying insurance).

But your price should be based on what the client is willing to pay (which tends to be based on their savings/benefits if you can guestimate that).

If the price is greater than the cost - bid on it. If not - forget it.

As independents, we too often confuse cost and price. They're not the same.

(BTW, I HATE fixed price contracts (including per-diems). I always tell my clients that they are going to pay more if they fixed price something vs T&M because under fixed-price one of us has to lose -- and it can't be me.) I also always price fixed-price contracts based on retail price (i.e. twice what I get as an independent). After all, if I was a large company and doing it all the time, I'd need to hire others and they'd be demanding to get paid regardless. So I deserve the same.

65. Bizzo's comment about Giving IT consulting clients realistic estimations: Nice

But using G, R, U doesn't work.

I keep getting a "divide by zero" error.

Am I that unreliable?

66. ssharkins's comment about Overcommitted? Face the music and talk to your client: RE: Overcommitted? Face the music and talk to your client

rock(et) science -- I love it!

Because I work hourly, I don't run into this problem too much. Another thing that keeps me out of hot water is the type of projects I take on -- they're all small -- a few weeks work of work rather than months or years! That makes estimating a lot easier, so I just don't run into this too much. In truth, it's one of the reasons I stick with smaller projects -- trying to estimate a huge project truly is rock(et) science and I flunked that course!

67. MacLarenIT's comment about The part of 'no' that I didn't understand: Another alternative-

Another alternative would be to ask if they are willing to share their budget figure up front(some will.) This will give you an idea of what you will have to work with, and help alleviate the sticker shock syndrome where an initial proposal would be way outside their expectations. If they do have a budget and it's low, provide a proposal with what you can do for this budget figure up front, and another with what you could ideally do with more at a later time. This gives them the option to budget for the more comprehensive solution in their next budget cycle, and shows that you care about their budget constraints and processes.

68. reisen55's comment about The part of 'no' that I didn't understand: Here is a going rate story you won't believe

A friend of ours who was a CPA had so little faith in his abilities that he would tell his clients to "pay me whatever you think I am worth." True.

For a client, this spells disaster, and if a consultant has so little evidence in his ability to do his job, then the work being performed must be far substandard. If you quote a rate far too high --- or too low --- but like the three bears, there is always a JUST RIGHT rate for each client.

I have three clients in two towns next to each other: one large, one medium and one very small. The large and medium are medical houses and because of their rates I can support the small account and adjust his rate downward dramatically. I could not support his business otherwise.

69. canIberichnowplease?'s comment about Hourly income gets stuffed on the holidays: We all try to calculate the holidays and things into our rate

but that also means you have to be budgeting the cash like a demon, which in my experience is practically impossible.

It does emphasise the need to understand your own personal cash requirements and make sure, for heavens sakes, you're saving something in the bank or under your bed or wherever. A week or two (or 18!) with little or no cash coming in can be somewhat of a challenge if you live life by the cash-in-cash-out rule.

(I am on contract payments - in daily units plus commission for sales. In Australia it is very typical of companies to effectively close down for Xmas through NY, and then (in my case) the first two weeks of January. That's three weeks non-billable for me, with no real option of alternate employment unless I retake my role as a lap dancer).

As to the pricing rule? It's what the dreaded marketeers call Inverse Price Demand. It works on many levels. It makes a Rolex more precious or exclusive and hence plays to the ego of the buyer. Or, exactly as you described, it gives people a greater perception of trust in what they are buying.

Your challenge is to push it without breaking the back of your clients!!

Try adding a retainer on top of your hourly rate. That is, "if you wish to remain a client of mine, you need to pay me $1,000 per month".

See what happens. Get ten of those clients who are also paying you an hourly rate and you don't have to worry too much about the holiday period ever again.

70. burntfinger1's comment about Hourly income gets stuffed on the holidays: Rates

I use a three tier fee schedule. One price (the lowest) for stuff I know well, middle price for things I'm not sure about and the highest price for anything I haven't a clue about.

I'm upfront with my clients and explain what I charge and why. Some of my most interesting work comes from clients who are impressed with my fee structure.