Sanity check / thought experiment

[ladymuck]

So. Which of these scenarios would you expect to charge a fee for:

You are a consultancy, not a BoS code monkey or PM. You spend time at conferences, setting up meetings, networking and generally schmoozing people to spread awareness and ultimately drum up business. You prepare information packs about the services on offer and how they can make a difference to your target market. There's some actual cost - conference charges, a bit of travel, a few beers etc. but it's mostly your time being spent.

Option A
This work is being done for your LtdCo and you will directly benefit from any sales.

Option B
This work is being done for a company you are a supplier for and, if they make sales as a result, you may get to deliver some of the services you have been selling. Or you'll get nothing because a cheaper supplier or a person in-house can do the work instead. You also advise the company on upcoming opportunities and how to make the most of them.

Personally, I think A cannot be charged for. How could you? It's a cost of doing business.
However, I think a consultancy fee should be charged for B. You are a supplier, not a charity.

The person I'm arguing with is doing Option B but says "this isn't contracting, it's consultancy so you wouldn't understand that it's a cost of doing business".

So, I ask the collective wisdom of the masses, what's the right approach? Being a lowly contractor, I can't possibly understand the lofty world of consultancy.

[NotAllThere]

What work does B involve?

[Old Greg]

So. Which of these scenarios would you expect to charge a fee for:

You are a consultancy, not a BoS code monkey or PM. You spend time at conferences, setting up meetings, networking and generally schmoozing people to spread awareness and ultimately drum up business. You prepare information packs about the services on offer and how they can make a difference to your target market. There's some actual cost - conference charges, a bit of travel, a few beers etc. but it's mostly your time being spent.

Option A
This work is being done for your LtdCo and you will directly benefit from any sales.

Option B
This work is being done for a company you are a supplier for and, if they make sales as a result, you may get to deliver some of the services you have been selling. Or you'll get nothing because a cheaper supplier or a person in-house can do the work instead. You also advise the company on upcoming opportunities and how to make the most of them.

Personally, I think A cannot be charged for. How could you? It's a cost of doing business.
However, I think a consultancy fee should be charged for B. You are a supplier, not a charity.

The person I'm arguing with is doing Option B but says "this isn't contracting, it's consultancy so you wouldn't understand that it's a cost of doing business".

So, I ask the collective wisdom of the masses, what's the right approach? Being a lowly contractor, I can't possibly understand the lofty world of consultancy.

The correct reply is, "this isn't consultancy, it's contracting so you wouldn't understand that there's a cost to doing business". Quote them for your time.

[Old Greg]

What work does B involve?

Wet jobs.

[Lance]

with both options your time is paid for.
A - by your LTD in salary and divis
B - by your client in invocies to you LTD.

I think the thing is whether you can get the client to pay for you schmoozing at conferences. I can see scenarios where that could happen but any business you drum up would be your client's not yours.

There isn't a right/wrong answer on this. It depends. And depends mainly on what the client wants.

For me.... I'd try and drum up business for both, and charge the client for it as well. Plus expenses (travel, hotels, booze for schmoozing, titty bars etc.).

[ladymuck]

What work does B involve?

Er.. this?

You spend time at conferences, setting up meetings, networking and generally schmoozing people to spread awareness and ultimately drum up business. You prepare information packs about the services on offer and how they can make a difference to your target market. There's some actual cost - conference charges, a bit of travel, a few beers etc. but it's mostly your time being spent.

You also advise the company on upcoming opportunities and how to make the most of them.

The company has an expectation you'll turn up to conferences and schmooze, directing leads their way. You spot other opportunities to schmooze and send opportunities their way. They also expect you to produce information packs for them to use with their clients and you meet regularly to discuss opportunities and marketing approaches.

[ladymuck]

with both options your time is paid for.
A - by your LTD in salary and divis
B - by your client in invocies to you LTD.

I think the thing is whether you can get the client to pay for you schmoozing at conferences. I can see scenarios where that could happen but any business you drum up would be your client's not yours.

There isn't a right/wrong answer on this. It depends. And depends mainly on what the client wants.

For me.... I'd try and drum up business for both, and charge the client for it as well. Plus expenses (travel, hotels, booze for schmoozing, titty bars etc.).

I see your point with A. Agreed. I was more thinking your LtdCo can't generate revenue from those activities, attending a conference and buying a beer is a cost of doing business.

[Lance]

I see your point with A. Agreed. I was more thinking your LtdCo can't generate revenue from those activities, attending a conference and buying a beer is a cost of doing business.

Buying a beer might be business entertaining which is not quite a cost of business although the business foots the bill. It’s treated differently for tax though.

[NotAllThere]

Er.. this?



The company has an expectation you'll turn up to conferences and schmooze, directing leads their way. You spot other opportunities to schmooze and send opportunities their way. They also expect you to produce information packs for them to use with their clients and you meet regularly to discuss opportunities and marketing approaches.

That's much clearer, thanks.

I did once go to such an event with a client. I didn't bill them, I didn't charge them my expenses. It wasn't part of my contract with them, I didn't have to do it. If it was part of my duties, then i'd expect payment.

The person you are talking with is making an artificial distinction. There are different ways of working.

[malvolio]

It's not that smple - somewhere along the line you have to come up with some sort of high-level solution to build further work around.

One of my gigs I took on for four weeks (to hit a hard tendering deadline) at a fairly low rate with the client's expectation that their £!7m a year service was going to be lost to their rivals (mostly on the basis of bad tools and poor perceived performance) but with my services moving to the new people to design and build (and handover) the shiny new service. At a rather more lucrative rate (i.e. roughly double the current one). Which meant 18 months work at serious money,

Only snag was my initial work highlighted some quick fixes and my questioning around how the service was being delivered now led to the team realising they could actually do the job properly. Net result was I won the re-tender for the client. Result!

Well, no, not really, since I didn't get the follow on work. What I got was a pat on the back and shown the door. And my permie main report got all the credit. Win some, lose some.

But expenses, including meeting costs and the odd evening entertainment and all the rest are cost of sales. I got some back, but the overall margin was tiny so I barely made a profit on the whole thing, as opposed to somewhere around £150k as per the original plan.