Listening to a great presentation by Stowe Boyd I figured it would be a good idea to clarify some questions that come up in my consulting work.
Ten Day Rule — Similar to Stowe Boyd, I base my consulting calculations on the goal that I will be working ten days each month on client work. I have never called it the ‘Ten Day Rule’ though. With the other (working) days being dedicated to research, networking, travel, and discovering. As a result, my per day rates may look higher than someone who assumes they would be working 22 days per month. On the other hand, the reason that most clients want my participation in their projects is due, in no small part, to the way I spend those other ten or so days per month. I am investing that other time in remaining at the top of my game. Just as professional athletes need to work long hours to remain in condition before they walk on the field, the same is true of someone applying their expertise to business.
First Project — On the first project with a new client I will invoice 50% of the first phase when you aprove our cooperation. The other 50% will be invoiced upon completion of the first phase.
Advisory Capital — On some projects I have a long-term relationship with a client where the full-day rate is discounted based on the attractiveness, length and level of effort involved in a project.
Work products — Unless otherwise agreed to, my ideas and insights are my own. In general, I will not agree to signing over ownership of ideas that I may have been developing for years in exchange for a some day’s of consulting. Brilliant ideas have a value that exceeds the value of nearly any short term agreement. This is one of the reasons that I look for longer term strategic engagements where equity is involved, since then all parties share common cause.
Work tracking — I track work at an hourly basis when appropriate, and will provide these records in my invoices upon request. Occasional phone calls, coordinating meetings, and socializing is not really work. However, trying to move a bunch of consulting into a coffee hour does not make it unbillable. If you pull out a powerpoint or give me a demo, that’s consulting. Likewise, making introductions, interviewing prospective employees, or reviewing documents is work, even if I am doing it in my back yard, where I often work.