ConsultX Consulting Fee Structure
This blog outlines the details behind ConsultX’s recommended fee structure after 16+ years of development. The main objective is to create a win-win relationship and a win-win fee structure for both the consultant and the client.
Would you prefer to listen to a podcast? Episode 24 of Everything Business Consulting covers our Consulting Fee Structure.
How we developed the ConsultX Fee Structure
To fully understand the power of our preferred method of charging a consulting client, it’s important to understand where it originated.
Testing different Fee Structures
Since 2005, ConsultX founder David Thexton and the hundreds of consultants within our network have tested every conceivable method of business consulting fee with ConsultX’s underpinning mantra: continuously develop until we find the best solution.
This dedication to find the best business consulting methods delivered the ConsultX Fee Structure.
For a full breakdown of all the possible fee structures, check out our blog post on choosing the best Consulting Fee Structure.
If you’re so good, charge a percentage of the results...
Early in his Consulting career, David was challenged by a client to charge a percentage of the improvement and growth he could create for the company.
This simple idea began the process of testing different methods of calculating the results of a consultant.
We quickly established that monthly revenue is the most transparent metric to base a simple and understandable fee system on.
Fee Structure overview
To get a complete idea of how the structure works, it’s important to understand how a ConsultX Business Success Partner conducts business with a client.
The 3 Phase ConsultX Process is detailed in the following diagram.
How it works
The Client Acquisition is based on spending a small amount of time discovering challenges, analyzing the performance of the prospect’s business, and preparing a proposal that is customized to them. Over this time, you’ll deliver great value, establish trust, and lay the foundation for a solid consulting relationship. We recommend doing this at no cost.
Once the client is signed, you’ll work to build an actionable plan to transform the business. Over this period, there is a fixed monthly fee.
The ongoing process of managing the implementation of the business plan, as well as the performance of the business is based on a percentage of revenue, provided it exceed the fixed monthly fee. This allows you to share in the growth you create in the business, while also having a minimum you’ll receive each month.
FAQs
Common questions based on the ConsultX fee structure.
Why a percentage of revenue?
We’ve tried everything over the years and have found this is the best for both parties. Often, a business owner may choose to increase their salary or personal spending through the business as you help it to grow, making a percentage of net profit an undesirable metric to base your fee on.
Does anyone ever object to the ConsultX fee structure?
Occasionally, yes. We recommend closing the deal by using the ConsultX fee structure, however, the number one objective (especially for a new consultant) is to sign the client. We generally recommend moving to a fixed monthly fee arrangement that is reviewed on an annual basis.’
Can a fee ever get too high?
Occasionally, yes. We put significant emphasis on creating a strong relationship with the client, where open and honest communication flow so you can ensure the business owner/manager is happy with both the results and the fee. In a few instances, a consultant has been able to grow the business revenue so significantly that it becomes unreasonable or concerning to the business owner. This is openly discussed, and the percentage used in the agreement is reduced to a maintainable level in order to keep the client over the long term.