Let’s be honest: for many senior professionals moving into the consultancy space, the question of “what do I charge?” feels less like a strategic decision and more like a shot in the dark. You find yourself hovering over a proposal, wondering if a day rate is too high or if an hourly rate makes you look like a glorified freelancer rather than a strategic partner.

The truth is, most people transition from a career of being told what they are worth to a world where they must decide it for themselves. In that gap, they often default to “salary logic” i.e. pricing based on what they used to earn rather than the value they now create.

In this article, I’ll share why underpricing isn’t an act of humility, the mechanical traps of “Pro-Rata” thinking, and the specific framework you need to align your fees with the actual transformation you deliver.

The Gravity of Past Salaries

When I speak with seasoned leaders entering the portfolio career space, I notice a recurring pattern. They price from a place of familiarity, using past salaries and internal corporate benchmarks as their primary compass. There is a deep-seated fear of someone asking, “How on earth did you arrive at that figure?”

This leads to what you could call “itemisation anxiety.” You start breaking down your work into tiny, billable chunks to justify your existence. It’s a micromanagement mindset that you likely tried to escape by leaving the 9-to-5 in the first place.

I’ve seen brilliant professional, people who can save a company hundreds of thousands of pounds, bill themselves out at a modest day rate simply because they don’t want to seem “extortionate.” But here is the reality: underpricing isn’t humility. It’s misalignment. If you price yourself like a “small boy” or “small girl” just trying to get by, that is exactly how the market will treat you. The consequence isn’t just a lighter bank balance; it’s a total lack of gravitas and respect from the very clients you want to lead.

Why Pro-Rata Pricing is a Trap

The biggest realisation most consultants need to make is that employees sell time, but consultants absorb risk.

When you use a Pro-Rata approach, taking a former salary and dividing it by working days, you are ignoring the fundamental mechanics of business. As a consultant, you lose the “invisible” benefits: the pension contributions, the private healthcare, the holiday pay, and the sheer certainty of a monthly payslip. You also have to cover your own professional indemnity insurance and business overheads.

If you simply mirror your old salary, you are actually taking a massive pay cut. Beyond the maths, there is a shift in logic required. You are no longer a resource to be managed; you are an advisor, a reviewer, or a lead who is there to solve a specific, often painful, problem.

I used to think, “What’s the market standard?” and check sites like CV Library. While that gives you a floor, it shouldn’t be your ceiling. To move from a “contractor” mindset to a “consultant” mindset, you must move toward value-based pricing. This isn’t about fantasy figures; it’s about understanding the financial weight of the problem you are solving.

The Value-Based Framework

To stop guessing and start positioning, you need to diagnose before you prescribe. When sitting with a prospective client, your goal is to find the “annualised opportunity cost” of their problem.

Here is how you can apply this immediately:

1. Identify the Financial Metric: If they have a sales issue, what is one client worth? If they lose 100 clients a year because of a broken process, and each is worth £5,000, that’s a £500,000 problem.
2. Look for Alternative Benchmarks: If it isn’t direct revenue, look at “Staff Replacement Costs.” If they need three senior people at £50k each to do what your strategy provides, that’s a £150k value. Or look at “Risk and Governance”, what is the cost of an insurance payout or a regulatory fine if this isn’t fixed?
3. The 15% Rule: Once you have a financial metric (e.g., £500k), apply a percentage. A conservative, professional standard is often between 10% and 15%. Charging £50k to solve a £500k problem is an incredible return on investment for the client.
4. The Three-Option Model:
   • Option 1: A lightweight “Review and Strategy” (e.g., 5% of the value).
   • Option 2: Strategy plus “Delivery and Implementation” (e.g., 10%).
   • Option 3: Full delivery plus “Ongoing Advisory” to the CEO/Leadership (e.g., 15%).

By offering options, you move the conversation from “Should we hire you?” to “How should we work with you?”

Positioning Precedes Confidence

In the UK market especially, we are often conditioned to be conservative. But the market responds to certainty, not comfort.

There is a concept known as “Elasticity of Credibility.” If you know a client turns over millions, providing a “cheap” quote actually makes you less believable. It signals insecurity. High-level leadership requires gravitas, and your price is the loudest signal of that gravitas.

We are living in an era where the “standard job” is becoming less secure. As more professionals move into portfolio careers, those who can articulate their value in terms of ROI, rather than hours worked, will be the ones who thrive. Positioning yourself correctly isn’t just about the money; it’s about the psychological contract you establish with the client. When you are priced as a strategic partner, you are listened to as one.

Conclusion

At the end of the day, you cannot price confidently without owning your value. You can have all the spreadsheets and frameworks in the world, but if you don’t believe in the transformation you provide, the client will smell the hesitation.

Stop thinking like an employee trying to justify a daily rate. Start thinking like a business partner identifying a gap and filling it with expertise. Remember: understand the impact, annualise the cost, and apportion your fee against the value created.

How will you redefine your value before your next proposal?

Understand. Reach. Expand.

Peace.