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The Basis for Profit

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First of all, the consultant only makes money when physically present or able to demonstrate that time is being expended somehow, somewhere for the client. This tends to compel the consultant to do the following:

 Maximize, not minimize, the number of physical activities (focus groups, interviews, observations, meetings, and so on)

 Accept peripheral assignments that may not be integral—or even important—to the actual project

 Encourage and not discourage scope creep, since there is no penalty for blurring the project boundaries

 Recommend nonessential tasks that don't contribute to results but do contribute to billable hours3

Value-based fees are far better for the client because they remove the ethical compromises that attend hourly or daily billing. You want the client to make a single return-on-investment decision at the time of the proposal, not a new ROI decision every day (or hour).

Value-Based Fees

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