60 ◾ John L. Templin, Jr.
as: “e project will include one site visit of 3 days for data collection and a return visit to present
ndings and recommendations. Additional visits will be invoiced at the rate of $200 per hour,
plus expenses.”
For a longer project or one where the consultant cannot control the timeframe, it will likely
be necessary to quote a project fee range. An example could be: “Based on the project scope and
timeline contained in this proposal, the estimated consulting time is 36–40 days at a rate of
$1,600 per day. e consulting fee of $57,600–$64,000 will not be exceeded without prior written
authorization. e estimated expenses are based on a maximum of 8 site visits and are estimated
to be no more than $7,500.”
In addition to setting the fees, it is necessary to dene client responsibilities so that you do
not spend more consulting time than projected. Client responsibilities could include scheduling
all meetings and interviews, assuring that client sta are available as scheduled, providing the
requested data in a usable format, and providing the necessary data in a specic format. For
example, you want an Excel le with the volume data, or patient-related data rather than a PDF
le or hard copy.
Getting that next engagement is just as important as getting the rst engagement. If you are
doing one-time projects for multiple clients, you will have to spend a considerable amount of time
prospecting and marketing your services. If you can provide a range of consulting services or if
the service you provide can be used in multiple cost centers, the ideal situation is to establish an
ongoing relationship with a limited number of clients. Implementation assistance is almost always
a good situation for both the client and the consultant. You need references for your next client.
You do not need a great project to be implemented incorrectly or not at all.
How Do You Invoice for Services Rendered?
For a short-duration project, you could simply submit an invoice along with or following presenta-
tion of the report. If the nature of the project does not require a report and there is a clear ending,
the invoice can be sent at that time. For longer-duration projects you have two main alternative
invoicing methods: periodic or phase. Periodic invoicing usually is performed monthly for time
and services in the month just ended. Depending on the expected expenses, you might even have
an initial invoice to provide some cash ow. Phase invoicing can be used when there are discrete
project phases and the duration of each phase is not much more than one month. You do not
want to wait several months before submitting your rst invoice. For a xed-fee project, you can
break the invoice into one more increment than the project length. For example, if the project is
expected to take four months, you can invoice 20% at the start, 20% per month for three months,
and the nal 20% upon project completion.
e check is in the mail. Or, when will you receive payment for services rendered? is depends
on the nancial situation of the client and perhaps on terms written into the consulting agreement.
A typical payment cycle is 45–60 days after the invoice is submitted. In the current environment,
the monthly invoices can be sent electronically to avoid mail delays. Most hospitals will still send
a paper check rather than making an electronic transfer of funds. With this payment cycle it is
easy to understand why a new consultant needs adequate personal nancing or a second income
when getting started.
Do you really want to become an independent consultant? If you have answered yes to the
questions posed in this chapter and you are condent in your abilities, why not? You may not
become rich, but you can have a very rewarding life with more exibility than continuing to work
for others.
III
WHAT DO
MANAGEMENT
ENGINEERS DO?
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