How do you determine what to charge for something that you produce? Whether you are an artist or a business consultant, the process is the same.
Companies that produce tangible products have it easy. They can take costs, add some markup to cover overheads, and set a minimum price. Of course they still have to finesse market demand and price points but at least they have a starting point.
My sister is a wonderfully talented artist . I can remember how difficult it was for her to promote her own works. In the early days, she and I would go into small retail shops to try to get them to carry her watercolor prints. It was much easier for me to describe the wonders of her talent than it was for her. From her perspective it just came naturally. She took a little paint, some paper and out came a masterpiece.
That is NOT to say that she doesn't work at her craft constantly. She works harder than I ever thought an artist would. She takes courses as often as possible, manages all of her business affairs with skill that would make most accountants jealous, and she donates time and her artwork to charitable events on a regular basis. She has also learned how to create her own frames and mats (which is part of the beauty of her finished originals.)
So how should she price a work of art? Cost plus some percentage? Or does she just have to get a feel for what the market will bear for something that is an emotional buy. People look at her works and are immediately transported to another place, a different feeling, a different time. How do you put a price on that?
As you might be able to tell, I have spent a lot of time trying to figure out how to be anywhere near as cool and talented as my artistic sister.
Turns out that every artist needs appreciators and occassionally someone to help them collect the money from their adoring fans. Both roles suit me just fine.
It also turns out that pricing consulting services is a lot more like art than a science.