I'm a former owner of a cabinet shop and have recently been contacted by an old customer who is adding cabinets to his kitchen. Since I do not have a shop anymore, he would like me to supply the new cabinetmaker with the architectural details (custom stain, glaze and moldings which took many hours to create and locate when I built the original kitchen) and where to purchase them. I have all this information available and he has offered to pay me as a consultant. What should I charge as a consultant?
(Business and Management Forum)
From contributor K:
This could end up being an open-ended commitment, and I think you are better off charging an hourly rate. Every time you do or provide something, just be sure to have him sign off on it. It will be clear the amount of hours worked X the hourly fee agreed upon. This way, if it ends up being a time-vampire, you are not on the losing end getting paid less and less per hour because you charge a one-time fee.
Or just give the customer a bid and sub out the work. Maybe do the install yourself. This way you maintain your connection and you will be the go-to guy for future work or future referrals. Just be upfront with them and tell them you are subbing the work out, and will supervise the job. This will give the customer a "one stop shop" with a trusted supervisor. You may think finding a shop to do the work will be difficult and you may be right. It may take some doing, but the big shops sub work out on a regular basis.
Going back to the trough for an increase to the retainer after providing a lump-sum bid would have me, as a customer, asking, "but you said (as the expert consultant, no less) that it would cost $X and that's what we agreed upon."
Seen this movie before...
With the hourly, customer retains control of their budget and how much time/money is spent on the consultant, while at the same time, the consultant gets paid for the time they put into it and is not short-changed or become the victim of the time-vampire.
The other option, being there is a third-party involved, is to take it over as a GC and get paid a percentage. Percentage of project would also reflect responsibility involved. Nothing wrong with giving the customer the options and letting them decide on how they want to proceed.
The only way I see this working is to project how long it is going to take and if it takes longer, they have to be warned in advance and they will have to cough up more money. Otherwise it is like talking to a lawyer where they will take hours to say what should take minutes.
I think it would be a win/win to sub the work out like a general would.
All he has to do is have the client sign off at each stage of the game with details. Amount per hour is agreed to upfront, and the customer signs off each time with a total. Trust me, they will already know what the total is before you give them the final bill, as they will be looking at the total and doing the math in their heads. Also, it's kind of hard to dispute the final bill with your signature next to each stage of the game (I would recommend a signature each time the hours accumulate past 10).
In addition to fabrication, we also do contracting. T&M is part of the contracting world. You just have to know how to use it. Most designers/architects I know charge by the hour or a percentage of the total project.
Charge him a couple of hundred bucks and be done with it. You can try and milk it and eventually he will say forget it and let the new guy just match it as best he can.
So I think a one time fee for written details for his finisher and a small fee to acquire the architectural details. If I need to visit his shop if written details are not enough, it will be on an hourly basis my customer will have to pay.