Management consultancy- to charge or not to charge?

To charge or not to charge for your service

I have done a lot of management Consulting in my time and it is what I love most. Being able to diagnose a business problem, research and implement the solution gives any consultant a good glow. It is the same kind of joy that I believe Gordon Ramsey must feel after helping struggling restaurant owners, but I always find that in Africa, many small companies are not at that stage where they believe they can seek help from management consultants.

The first rule for any consultancy business is to make sure the clients pay for the services, but on my recent visit to a new client in Nigeria, I decided to break that rule and provided my services free of charge.

The value add

As a consultant, I often take pride in going the extra mile so that the client gets the added value. Why not? It seemed like a great idea and I believed the value will allow the company to grow and who knows I might get some future recommendations to help another business. For a company of the size, I was surprised at some of the things that the company lacked; no computerised accounting system, no monthly management reports being produced, no regular stock takings, and the list was long. The bulk of the improvements could have been done without costing a lot of money, even the computerised accounting system would have been done with a free software.

People value what they pay for

A few months after my recommendations, I was surprised that there were no changes to the processes or the way the company was doing business. I took it on the chin and assumed that the company probably did not like the proposal, but most importantly, I believe that it was because they did not pay for the service or my service was not up to scratch. As I was beginning to think on the rationale or justification for the provision of pro bono services.

I received a call and a WhatsApp message from two entrepreneurs I met at different times during my stay in Nigeria. One whilst waiting at the airport to board a plane, the other through a mutual friend. The advice given to these two entrepreneurs were very basic in terms of the strategic goals of their respective companies. We spoke afterward and I provided additional support. With the experience from the detailed report to the first company, i was not very hopeful, that these guys will do anything with the advice give, but imagine my surprise when they rang me within a couple of days of each other several months later to thank me for the advice and hope we can do more business in the future.

A friend and another friend started a Micro Finance company. They put everything into their company and we’re doing reasonably well, but Nigerians are bad at paying back loans or at using the loans for their main purpose. The result these friend lost everything he invested in the Micro finance company when the Central of bank of Nigeria withdrew their license.

On a close inspection of the balance sheet of the finance company, it was obvious that the company could have been saved. What a waste!

Never be too proud to ask for help before it’s too late. Champions are those ready to go the extra mile.

You may be interested in small business consulting

126 thoughts on “Management consultancy- to charge or not to charge?

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