A recent LinkedIn post told the story of a fractional CFO whose credentials and $150 hourly rate did not add up. He had 12 years of experience, a Harvard MBA, and a Fortune 500 background.
When asked why his rate was so low, he replied, “That’s what the market pays.”
Working with a branding expert, he replaced the headline “Fractional CFO” with “I help SaaS founders hit $10M ARR without burning cash.” He also began publishing specific insights drawn from his experience, including P&L mistakes, burn-rate problems, and financial warning signs.
Six weeks later, according to the post, he had raised his rate to $497 an hour. The stronger positioning clearly helped the market understand the value of his work.
But the increase raises a fundamental question: At that level of expertise, is hourly pricing still the best model?
If his work helps a company reduce its burn rate, improve cash flow, avoid expensive mistakes, or protect enterprise value, the value of his contribution has little relationship to the number of hours he spends. Even after more than tripling, his hourly rate may still understate the financial impact of his work.
A fixed engagement fee based on that value, perhaps with a clearly defined performance component, might make more sense.
Of course, no business consultant can control every factor that affects an outcome. Market conditions, internal decisions, timing, and the client’s willingness to act all matter. But those limitations do not automatically make hourly billing the best answer.
Hourly billing is familiar, easy to explain, and easy to defend. It also keeps the focus on time spent rather than value created.
It may be the path of least resistance.
“That’s what the market pays” sounds like an objective fact. To me, it sounds more like a familiar subconscious belief being mistaken for market reality.
Discomfort around asking for more often begins with early life lessons about money, ambition, fairness, and what one deserves. Unless the beliefs formed from those lessons are updated, they can continue to influence fee decisions long after a consultant has acquired the experience and results to command considerably more.
Strategic positioning can change how the market sees your value. It does not necessarily change the beliefs that determine what you are willing to ask for.
Those beliefs can still lead you to discount your fee before the client objects, retreat to a familiar pricing model, or choose the number that creates the least internal resistance.
Are you pricing your work according to the value of the problem you solve, or are you pricing according to the pricing model that feels easiest to defend?
Consultant Income Self-Assessment