Captain’s log, stardate 20201105
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“How do I balance cost vs quality on a fixed price engagement?” and more...
In today’s group coaching session, we had a bunch of good questions that touched on topics like:
- How to think about revenue vs profit
- How to come up with three options for a project proposal
- How to balance cost and quality on a fixed price engagement
- How to evaluate the buying power when targeting a local market
- How to get around a gatekeeper in accounts payable
- How to value price a SaaS idea for a solo entrepreneur at the VERY early stages of the idea
- Considerations when selling with partners
Here are some of the questions I answered today:
I think you mention somewhere that you average $2,000 an hour and that your business is in the 7 figures. Can you give us a breakdown of your revenue stream and how your strategy could apply to someone doing technical consulting? (timestamp 2m 17s)
I’ve discussed an audit of a company’s user onboarding flow with their head of product and they’re keen. What are some other types of services you’ve seen bundled with an audit to give them 3 options (good, better, best) in my proposal? (timestamp 12m 35s)
I understand that value pricing can help you to avoid scope creep, but it’s not always suitable for all projects. After proposing a set price for a keynote & virtual workshop for a client, I realized that I’m getting in my own way of making the project profitable because of my quality standards/perfectionist tendencies. What are your tips for setting & holding yourself to quality standards that are realistic, don’t go too far beyond customer expectations and are tied to results? (timestamp 18m 50s)
If the goal is to tackle more strategic, high-impact projects, what sort of opportunities and drawbacks do you see in partnering with other people (independents, agencies, etc) in the sales cycle (defining joint offers, selling together, sharing value) and on projects themselves? (timestamp 29m 23s)
Do you have any references/tools for evaluating a market potential? As I am dealing more and more with just local businesses, I feel like it would be good to have a grasp on what the financial landscape looks like here. - Seems some are well off, others not so much - I’d love to know the "median" kind of thing. Unsure how to discover that, if even possible. Cheers. (timestamp 39m 29s)
I usually do pre-paid gigs, paid at the beginning of the month. My most recent client wanted net 30. We negotiated net 7. Just sent them my first invoice and their AP guy replied saying they’d pay it on the 15th. I replied and told him CEO and I negotiated net 7and the invoice was due on the 8th. He replied telling me they pay vendors on the 15th and 30th. I haven’t replied to him or looped in their CEO yet. Thoughts on how to best handle this? (timestamp 44m 40s)
I’ve had a couple wins recently in moving away from hourly billing. A couple of projects have been 100% up front and others I fellback to a 50% deposit, however I’ve realized this creates other problems. I realize falling back to 50% deposit was an attempt to mitigate risk on their part. What’s some language that I can use to help when asking for 100% upfront? I’ve considered offering refunds/guarantees to mitigate the risk for them but I don’t want to lead with that. (timestamp 49m 47s)
How to do a value based pricing for a solo-entrepreneur at the very beginning stage of the product, where validation is needed. The outcome of performed experiment can confirm or reject the hypothesis, or it may even turn out that the product can pivot with new data, which means that the work will be extend from the initial deal. (timestamp 58m 1s)
(If you’re curious, you can review the entire list of past questions here)
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