A good thread about consulting. I might have some additional thoughts:
Clients buy a variety of things from consultants, and butt-in-seat-time is the least salient of those things. You can increase your rates (or even add line items to an invoice) in compensation with others.
Scheduling predictability: Your “rack rate” (the standard number you quote) is generally for “X amount of time scheduled *after we’ve signed contract* at a mutually convenient time during standard business hours N months out from now.”
If a client wants you to start tomorrow, that might be something they can buy. Clients can ask a consultant “Be in Germany, tomorrow. You start as soon as you get off the plane.” Nobody does this to employees. It. Is. Not. A. Free. Thing.
Commitments of availability: some engagements are periodic in nature. A client might want to lock up availability for 9 months from now. If your plan-ahead window is usually 3 months, that also costs money (and/or a retainer, and/or a deposit).
At a multi-member firm, clients purchase outcomes. If they also get to name their consultants, cool, that’s probably extra. (The firm might choose to distribute some as a bonus. Or might not.)
The three most important things to getting out of the feast-or-famine cycle are all about recurring revenue. You turn one-off engagements into:
a) Repeat work, ideally committed work
b) Referrals
c) Retainers
a) Repeat work, ideally committed work
b) Referrals
c) Retainers
(What’s the difference between repeat work and a retainer? The retainer is paying for the option value of perhaps having work for you. It’s on a use-it-or-lose-it basis and costs a slight discount to scheduling you.)
The most common thing technologists will sell on a retainer basis is support or maintenance for shipped applications, which is otherwise the client’s responsibility after the acceptance period.
“What about if there is a bug?” All software has bugs. Everyone buying and selling software knows this. That’s why there are acceptance criteria in your contract which specify who is in charge of bugs at X severity after Y time.
