Charging for Proposals?

This is a post by my friend and a fellow Internet Consultant, Burns Smith, in Madison, MS. We have known Burns for almost two years now and we have worked together on several projects. Burns continues to impress us with his ability to educate his clients on the need to invest the time and effort upfront to better scope the opportunity so all parties are aware of what is involved and expectations are set accordingly. We’ve asked Burns to share his approach with us and below is what he wrote. We hope you find it of benefit to your business as well!

Burns says:

As a professional Internet Consultant, one of the dilemmas I face is at what point should I be charging for my time. I understand that any business relationship must go through an introductory stage. I also know that I must invest enough time to establish my credibility with the buyer. However, what I am selling is my time, my knowledge, and my access to a tremendous network of resources. At some point I should be on the clock and get paid for what I do. To do otherwise is not fair to me and encourages non-serious tire kickers to waste my time.

So when should I start charging for my services? After experimentation with several different approaches, I decided that the best one was to charge for my proposals. It takes a lot of my time to meet with a client, understand his or her needs, match those needs up to the correct Internet solution, and then meet again with the client to review the proposal. However, I make sure I share enough information in the initial appointment that it is very clear that I will bring value to the process. I also encourage potential buyers to check my references. If the project is not overly complex, I explain to the client that the next step of the process is going to take a significant investment on my part and the end result is that he or she will be much more educated about website design and internet marketing.

I usually throw out a nominal fee. I quite often get responses such as “I understand” or “That’s not a big deal.” For those who object, I believe I have just weeded out a non-buyer. The fee does not truly compensate me for all of the time required to generate a proposal. However, I believe these are the benefits to be gained by following this process:

• It enhances my credibility.
• It establishes from the beginning that I get paid for my time and knowledge.
• It screens out non-serious buyers.
• It helps me to understand if I am talking to the decision maker.
• Buyers will better value something for which they have paid.
• If they do not buy, I have at least have been compensated in some fashion.

If the project is going to be more complex, I explain that it will take quite a bit of time and analysis to scope out the project in order to set a price and that I will be charging an hourly rate in this initial stage of the project development. The client will in turn receive a detailed project definition and a price.

J. Burns Smith, Jr.
Internet Consultant
(601) 853-4449
P.O Box 1213
Madison, MS
39130-1213
www.wsistarwebsolutions.com