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A challenge every new (and seasoned) consultant faces is ensuring a stable source of cash flow. Most consultancy jobs involve hourly or project work which once finished, there is no cash flow from it until another project comes about. This issue can pose a significant challenge in ensuring a stable source of income without a steady stream of clients, which isn't an easy thing to achieve. Some clients would drop off after a single project, leaving a gap if you didn't have another client at the same time. This point is where the consultant retainer comes in.
Almost every freelancer needs to work with a contract. We’ve had instances where a client fails to make all the payments due to the freelancer or make them work beyond their service scope without extra pay. As a freelance consultant, your job is so demanding that you can’t afford to offer services that the client isn’t willing to pay for. Of course, not every client is unfaithful, but just to be on the safe side, you’re better off working with a consulting retainer agreement template PDF than working without.
The truth is, both you and the client need this document. While you’re fighting so hard to ensure you get all your dues on time, the client expects you to deliver what you promised. As such, both of you have some expectations that you must meet, and not unless there’s a consulting retainer agreement template PDF in place, things may not run smoothly.
So, how do you create a consulting retainer agreement template PDF for your freelance consulting business? If you’re a newbie, you might find it challenging to design one. However, that shouldn’t dash your hopes of ever making it through. Even the consulting gurus you see around started from somewhere, and, therefore, you’ll also get there. Thanks to the many consulting retainer fee agreement sample PDFs available online. You can always get to borrow ideas and make it through. Additionally, with a consulting retainer agreement template, you don’t need to start from scratch. Just get the structure and fill in the necessary details. A consulting retainer agreement template isn’t like a proposal, and so, it doesn’t require you to write so many words, which makes it easier for you to design one.
When you set up a consultant retainer agreement, you bill your clients per month. The invoice is broken down to a defined number of hours that are expected to be worked that month. You can also charge monthly for access to your expertise or services as a subscription fee.
As a freelance consultant, establishing a steady stream of income can be a tricky affair, especially when starting out - that's why getting a consulting retainer fee agreement in place is essential.
However, businesses and practices need a constant source of revenue to unction correctly. Consultancy sometimes involves going through clients very quickly, hence making billing per hour somehow unreliable - that's exactly why retainer fees for consultants are a gold mine.
However, the solution isn't to have numerous short-term contracts. It's to change the pricing strategy.
Billing through a consultant retainer fee agreement is the better solution. Having a consulting retainer agreement PDF in place means that you will be paid in advance by the client and the client will gain access to your expertise; thus the client will be paying for a dedicated consultant for a particular period, mostly monthly.
Sounds great, right? Well, it’s time to get a consulting retainer fee agreement sample PDF and set your freelance consulting services running. Probably you’re wondering why you might need to work with a consulting retainer fee agreement sample PDF. Couldn’t you just do without? Well, don’t worry. We’ll roll it out below.
Working with a consulting retainer is a very effective pricing strategy you can use for your business. It also benefits your clients since you will be committed to ensuring they get the best from you, instead of you grinding your energy trying to find your next project.
As a freelance consultant, it’s your right to get paid after hard work. At the same time, your client deserves the best services since they’re spending their money on the project. So, you realize it’s two-way traffic, and the only way to ensure it’s fair for both of you is to have a consulting retainer fee agreement sample PDF in place. In essence, the retainer contract protects the interest of both parties so that working conditions are favorable for both of you.
Having a retainer model ensures that you have a stable relationship with the client. Depending on your consultant retainer agreement and the timeframe that was specified, you will be assured of a particular amount of income each month from that particular business relationship, and the client is guaranteed access to either services or expertise (where you do specific work for them).
Therefore, with the consulting retainer fee agreement sample PDF, you’re sure the client will pay you your monthly dues. At the same time, your client is assured of getting the services outlined in the contract. Even so, for this to happen, you must clearly define your scope of work in the consulting retainer fee agreement sample PDF. Failure to do this, you’ll end up offering services that the client isn’t aware they should pay for. The last thing you’d want is to argue with your client over payment. That will only ruin your relationship. Therefore, to be on the safe side, highlight your scope of work and how much you’ll be charging for your services.
Once you have the base level of income from particular clients, you can continue to add to your list of clients, and as you model the trusting business relationships that have worked with your previous clients, your base income will continue to grow.
This mode of retainer means that you provide ongoing work for your clients, and they pay you on a monthly basis. The difference between this consulting retainer agreement model and contract work is that you are providing work on an on-going basis. A contract, on the other hand, has a defined expiry date.
In the case of a contract, the project has definite deadlines and ending date. That means you know when to send out a proposal for the next project. However, in the case of a consulting retainer fee agreement sample, it’s an ongoing project. So, you expect payment at given time intervals. It could be monthly, weekly, or even quarterly depending on the agreement. As such, you have a constant cash flow for the period. That’s the best part of it. But even then, it’s your responsibility to ensure your cash flow isn’t interrupted by having a retainer fee agreement in place.
For this model, you will need to provide answers to some questions the client will have. These include:
The better these questions are answered while focusing on the value you bring the client, the more likely the clients are going to accept it.
In this model of consulting retainer, the client pays a retainer to access your knowledge, expertise, and experience. More seasoned consultants favor this approach. Unlike pay for work model, this model doesn't require you to trade actual hours for dollars - the time put in is directly connected to the money you are making. Isn’t that a good idea? And the food thing about it is that you don’t need to strain to get things done. All you need to do is to achieve the milestone set for the given period. Since you’re not working on a fixed budget, you can make an amount equal to the hours you put in.
In the pay for Access consulting retainer, the client could even pay up to six months upfront to be able to access your expertise. Your consulting isn't tied to the deliverables that are specified in a particular consultant retainer agreement. This model will only work if you already have a trusted relationship with the client, having worked on at least one project and developed an enjoyable working relationship. Therefore, it’s up to you to build confidence in your client. That would mean delivering on time and achieving the set milestones. Apart from that, you should prove to your client that your services are relevant to their business by ensuring you help them meet their business goals.
The client will agree to this retainer model after they have seen the value you bring to their business, and the need for your constant access is justified.
In ingenuous terms, a retainer agreement is a legal agreement between a company/client and a service provider to work together over a long period on several projects. The consulting fee agreement, sets details of the retainer arrangement and could include the extent of the engagement, the payment details, or the retainer fees for consultants, and the termination process.
Benefits of working with a consulting retainer agreement PDF:
However, some issues could cause the client to have negative views on agreeing to a professional services retainer agreement.
For some clients, they may have had negative experiences in the past, making them wary of working with a consultant retainer fee.
This issue is why consultant professionals fare better when they sell retainer agreements with already established clients. First impressions are vital if you are to successfully market the idea of consulting fee agreement to clients later on.
For some others, they could be new to the idea, and thus want to establish if it's a good step before committing to a long-term retainer fee for consultant arrangement.
This issue can be handled by making sure that your solutions are articulated well during the pitching and signing stages of the business relationship. Also, make sure to include the fact that you charge retainers instead of hourly consulting fees.
Having a detailed consultant fee agreement will help you avoid issues that could arise between you and your client. An underestimated retainer fees for consultants can lead to unexpected delays in the work and affect overall performance. Consequently, an overestimate from the client, could also cause frustration in the work, especially from the client.
However, you can offer to cover part of the contract on hourly fees and agree on the services that will require a consulting fee agreement signed. Either way, you need to earn the client's trust before a consultant retainer fee agreement can be signed.
At times clients request huge discounts from consultants in exchange for the retainer offer. This could lead to the freelancer getting less than what they rightly deserve. Never allow yourself to work for way less than what you deserve just so that you can secure a contract. Always have in mind that your professionalism should be compensated in the fairest manner possible.
For most consultants, retainer fees are calculated by multiplying the estimated number of hours (hours the consultant expects to work on the client's project) by the amount they charge per hour.
For example, when the consultant charges $50 per hour and plans to spend 40 hours per month working for the client, the final consultant retainer fee can be estimated at $2,000. The consultant should make sure that the professional services retainer agreement allows them to earn a profit; otherwise there will be a need to renegotiate the deal.
For example, the client could agree to pay more fees, or allow the consultant to spend fewer hours per day on the said project.
Some clients will expect a discount when they agree to sign the consulting retainer fee agreement beforehand. This action is unfair to you as the consultant, and thus you should seek to ensure you make a profit from the first stage of the contract. You can opt to offer some package hours at the standard rate.
The discount that you grant your client, shouldn’t be too low as it might get challenging to reserve after the job has started. To get a reasonable rate that will work out for both the consultant and the client, you need to do a lot of research to find out average rates in the industry on retainer fees for consultants and the paid average rates by the client. This will work as a blueprint you can use to choose a rate that will see the work run smoothly without any glitches.
This way, you can guarantee the clients that their needs will have your primary focus throughout the contract. Clients respond more positively to quality service over shoddy work over many free hours. This reason is why consultants are encouraged to focus more on selling quality results instead of hours worked.
The amount of money the client will accept to pay you will be determined by how much return on investment you can bring. To prove that you worth every penny you are requesting on the consulting retainer agreement PDF, you can offer to have some extra services to go with the consulting. Talk to the client about services like training that you can bring into their company.
Freelancing work is most certainly not a walk in the park, especially when it gets to securing jobs. The constant cycles of applying for jobs and ending contracts, fluctuating retainer fees for consultants, is not the most interesting part of working as a freelancer. That is why you read to show the clients that you are worth their money. Make sure your services offer a positive return on investment for your client. This will not only help secure future jobs with your client but will definitely help you land other retainer contract agreements.
Maintaining enthusiasm over a long period requires grace. However, it is essential to make sure you remain enthusiastic long after the first month. While new projects are exciting, disagreements and boredom may crop up; the temptation to take your clients for granted should be resisted at all costs.
Essential factors to help you keep focused is to always remind yourself why you are doing the job in the first place. Set timetables to help you beat deadlines and work with your milestones. Keep good communication with the client all through, and remember that time is money. If things are not working out and you feel like walking out of the job, remember to follow the process that is laid out in the retainer fee agreement to terminate the contract.
Strive to always offer beyond bare minimum regarding quality services. If you were enthusiastic about providing technical support during the first months, maintain the same enthusiasm regardless of how many months you will have worked hitherto. If the client feels like your enthusiasm wanes after a while, they may feel side-lined and will be less likely to recommend you to other clients in the future.
To write an effective consulting fee agreement that will ensure a smooth run of freelance consulting services, there are some key aspects that you need to include. Here is a look at the few things that you have to put in the retainer fee agreement to ensure a successful working relationship with your client:
The consulting fee agreement should elaborate in detail what you and your agency are willing to offer as services to your client. If well articulated, the retainer will act as the reference in case of any dispute.
This is the fee that you will request to be paid upfront by the client. Retainer fees for consultants in the contract need to give the breakdown and basis of the payment in detail. This is especially important to avoid any misunderstandings as you will have the retainer to reference.
The retainer should have details of payments that the client should foot other than the consulting fees. These expenses could include travel, accommodation, communication expenses among others.
The consultant should give the hours that they will be available to provide their services. The hours to be provided by the consultant should be discussed in detail with the client. Articulate properly the timelines for both you and your client set goals, milestones and deadlines. This will help curb any future conflicts with your client.
The retainer agreement should provide details of circumstances that should lead to the termination of the consulting fee agreement. The factors that lead to the close could be unfulfilled promises from either party. In such cases, the retainer agreement should detail the means and duration of notice for terminating the contract. Discuss with your client how the process will be carried out in case of need.
There are two types of retainer agreements that you can choose to work with depending on your relationship with your client. The other determinant of the type of retainer your client can accept to work on with you is what he/she thinks of your services. The more they feel that you are a guru and they can easily lose your services, the quicker they will be ready to lock you down with a retainer. Here are the two types of retainer agreements:
This is the type of retainer where the client pays the retainer fees for consultants for the hours worked in a month. For example, if your hourly rate is $50 an hour and you work 100 hours in a given month, you will get paid $5000 in that month.
In this type of retainer, the client pays the consultant a monthly fee to have access to their services. The payment here is not dependent on the hour worked in that month. The consultant rather gets paid a monthly salary and accepts to offer their services to the client whenever required. Retainer fees for consultants, in this case, grants the client access to the client as need be.
A retainer fee agreement helps you create a professional working relationship with your client. The process is made formal and you can avoid the many hiccups that freelance consultants face in their work. It is good to give the best when jotting down the consulting fee agreement, as it will set the tempo for many of your prospects.
The primary key to successful business relationships is to ensure that trust remains a key pillar. Once the client believes that you can deliver real solutions for the business, they are more inclined to agree to the professional services retainer agreement.
At times it may be crucial to seek the help of an attorney to help you draft the retainer fee agreement to help make it legally binding. However, there are available templates to help consultants to draft the required retainer agreements. The template can be downloaded and edited to suit the current terms of service you are offering the client.
It is important that after having the final draft, you meet with your client. This would help you go over the details put in the consulting fee agreement and make any necessary adjustments. If both parties are satisfied, you can sign the retainer agreement and set off to begin work.
You are advised to offer a consulting retainer only after a successful consulting project – not before. The client must have enjoyed working with you. Only then will the client appreciate the value your continued influence on their business will have, either through actual work or access to your expertise.