The employer receives your skills, you receive higher hourly compensation and freedom to pursue other consulting assignments, or a full-time job. Beginning consultants tend to set their fees too low. Because the other half of their time is taken up with sales and marketing tactics, administrative tasks like invoicing and collecting bad debts, customer service and customer relations, volunteer efforts, entertaining clients, attending professional organizations and trade shows, and writing articles like this for professional journals. Second, because you lower the value of your services by reducing your prices. In America high quality is associated with high price.
Some consultants actually increase their business by raising their prices.
Many times consulting assignments roll-up into full time job offers. At that point, you have a decision to make. Dr. Donn Lobdell, head of Reasearch and Development for COBE Laboratories , left the company in a corporate buyout. Because of his national reputation, he quickly established a booming six-figure consulting business. His wife was a senior executive in a large Colorado corporation, and they had just built a new custom home.