Kit 02: pricing people and teams
Rate Card and Commercial Models Kit
A rate card that defines the day it prices, three commercial models set out as term sheets, and the audit that shows where your rates slip between the quote and the invoice.
This kit is how I would set up a rate card, and the commercial models behind it, for a firm that sells people's time and expertise. It is for consultancies, IT services, engineering and other professional services firms pricing individuals and teams for mid-market and enterprise clients, where the rate on the card is too often the start of a negotiation rather than the end of one.
It starts with the card itself. A rate means nothing until the day it prices is defined, so the card says how many hours a day is, where it is worked, what it includes and what is billed separately, and it carries the commercial terms beside the rates. Each grade is priced from your own cost base, your realistic utilisation and the margin the business needs, with a market check afterwards, never before.
Then the three commercial models most engagements run on: time and materials, teams and milestones, each set out as a term sheet, so you know what each one commits you to before a client asks for it. Around them sits a continuum of six models, ordered by how much trust each asks of the client and how much risk each moves to you, with where each one fits. Team pricing gets its own chapter, because pricing a team separately from its staffing mix is what lets you change who does the work without reopening the price.
The last part is about keeping the rate once it is agreed. A deal-desk leakage audit reads your signed deals against the card and shows where the money went between the quote and the invoice: discounts, days given away, extras never billed. A procurement what-if FAQ prepares the answers to the questions a buying team asks every time, before you are in the room.
It is written from how I priced work at DevOpsGroup, from my notes and my recollection. Every rate and default in the model is invented, labelled as such and yours to change, because a rate printed in a kit would be wrong for your market by the time you read it.
What you will get
Who it is for
Questions
- What should a consulting rate card include?
- The grades, the rate for each, what a day is (hours, location, what is included and what is billed separately), and the commercial terms: payment, expenses, cancellation and minimum booking. A card that carries only a number per grade is a menu, and every gap on it becomes an argument later.
- When should you price a team rather than time and materials?
- When the client wants steady capacity and progress over months and you want to own the staffing. Pricing the team separately from its staffing mix means a change of people does not reopen the price. Time and materials suits work the client directs day to day; milestones suit deliverables that can be defined and accepted.
- What is a deal-desk leakage audit?
- A review of your signed deals against the rate card: discounts, days given away, extras never billed, and rates held past their review date. It shows where the rate on the card was lost between the quote and the invoice, deal by deal, so you can see which habits cost the most.
- Does the kit tell me what to charge?
- No. Rates move by market, country and year, so the kit teaches the arithmetic and the terms, and your rates come out of your own cost base, utilisation and margin. Every number in the model is invented and editable.