Mahar Enterprises, Inc.

Phone A Friend

SUBSCRIPTION SERVICE

Over the last decade, it has become normal for me to hear from my clients about once a week to discuss an idea, obstacle or need in their business.

This casual relationship, with constant communication, has allowed me to stay in touch with my clients and be most effective in answering issues immediately.

I’m offering a subscription for what has essentially become a “phone a friend” relationship.

Having my personal creativity and attention applied to your problems is will save you thousands.

Having someone to speak with in a candid and confidential manner will save you thousands.

Having access to the talented people in my network, only when you need them, will save you thousands.

Having my experience to prevent you from making a mistake will save you thousands.

Applying my creative strategies will make and save you thousands.

JOIN HUNDREDS OF PAST CLIENTS that have benefited from my personal attention, creativity and strategic advice.  Your subscription, solutions and problems remain confidential (and that’s why my clients aren’t plastered all over my website).

- COMPLETELY CONFIDENTIAL -

The “Phone A Friend” Subscription is $99/month.

In addition to having my personal cell phone number, here’s what you have access to EVERY MONTH:

• Unlimited Q&A on the Forums (other professional contributors)
• Up to 6 Hours of phone or Skype consultation ($300 value)
• Confidential Support on ANY TOPIC in ANY INDUSTRY (I refer it out if necessary, typically at no fee)
• Internet Resources & Marketing Tools, reserved for my personal clients.
• Opportunities for tangible savings, reserved for my personal clients.
• Updates and News specific to your industry (60-90days before I publish it)
• Inclusion in our Affiliate Marketing Network (directed at one page of your website)
• Design, Web & Graphic support (if I can handle it myself you can just burn an hour on it – logos, etc…)

You will immediately experience the value of our services or you can cancel at any time.

PERFECT FOR STARTUPS, INVENTORS, ARTISTS & DISTRESSED BUSINESSES – START NOW!

The #1 question I get asked is to solve a problem on a specific budget.  I have yet to fail in charting a realistic course for success within a client’s budget.  I can show you how to do things that many businesses spend ten times as much for (without half the insurance measures I show you how to include).

How many people can you call who know your industry well enough to give you an intelligent opinion?
How many of those people can you be completely honest with, share your REAL concerns, and receive unbiased confidential advice?  I don’t SELL anything…I help business owners arrive at cost-saving conclusions for rescue, launch, efficiency, growth and sanity.

I make my living by providing unique creative solutions…and mapping routes to revenue.   I don’t sell anything other than my brain (and you can rent it for the bargain basement price of $99/month).  I expect you to cancel this subscription once we we figure out the best way for me to be available to you down the road.   Until then, I’ve made it as affordable as possible to “try me”.

Subscribe now (no cancellation penalty – buy it, try it, cancel at any time):

Early Retirement Pitfalls

So you won your independence (kind of) – now what?

Independence day is approaching.  As I do every year, I try to examine the concept of independence on a personal level.  If this isn’t your first visit to my BLOG, you already know that I place an extremely high personal value on my own independence and those who earned it for our entire nation.  My own independence isn’t on my mind this year, however.  Presently, I’m watching my parents machinate over the strategy of collecting on a retirement promise without being penalized for their remaining work ambitions…all while jockeying between being an emotional support system for their four adult children (with grandchildren)…and dealing with the their own aging parents (90 & 92).  Someone you care about is in the same boat (maybe it’s even you).

Being 62 years old doesn’t mean what it did in the late 1940′s or 1960′s.  People in their early 60′s are much more active, spry and alert – contributors to society, the economy, the political world, their community and their families - far more than the ”dependent” tone of past 20th Century Retirees.  For those Baby Boomers considering early retirement, there is an almost tragic environment which (through a handful of circumstances and regulations) makes it challenging to have a “survivable income”.  Achieving personal or financial independence continues to be a hard-fought battle (despite, and sometimes in spite of, social programs). 

Baby Boomers still have plenty of gas in the tank (along with higher car payments and more drive) than the retirees of old…but electing to access Social Security Benefits basically requires them to hand over the keys in exchange for a “benefit” (park their car in exchange for a bus pass…and subscribe to “public” transportation…while still making their car payment).

Nothing in this world is entirely absent of humor, and I personally think SS is fodder for great jokes…but let’s be serious for a second:  Claiming Social Security benefits at age 62 means you can’t earn more than $14,000/year without having to give 30% of it back to social security (in addition to being taxed on every dollar in the first place).  If you have positioned yourself at 62 to sustain your still active lifestyle with about $1,200/month in benefits and about $1,200/month (cap) in part-time earnings you’re way ahead of the game.  That’s $28,800 before taxes and all I can say is “congratulations!”. 

For those who don’t feel congratulations are in order, read on.  For those who have disposable income, read on.  I’ve had countless conversations in recent months with every retiree I know.  This is a generational issue and it isn’t going away.

There is no “one size fits all” solution to conquer the puzzle of “financial ambition after 62″, but below are some creative solutions to discuss with your accountant and associates (I’ll divide them into three categories – “self-employed”, ”business owners” and “general”):

NOTE: I’m making the assumption here that you can’t just afford to “cash out and walk into retirement” (or I would have titled this, “Retirement Success”).

Self-Employed:
(you own or operate a business as a Sole Proprietor or entirely as a 1099 contractor)

• Partner with a younger spouse and compensate them for any net earnings in excess of $14,000/year. 
  • Rationale: They don’t have a cap on how much they can earn because they aren’t claiming their SS benefits yet (sure they still have to pay taxes on earnings, but at least they don’t also have to pay $1/3 to social security). 
  • Result: 30% net income improvement…and the earnings stay in your household.
• Surrender to the keys to your own car and take a part-time job or engage in a different partnership. 
  • Rationale: Less effort spent contributing to someone else’s business than perpetuating your own at half-speed (W2; preferrably someone whose success you really care about, like a family member or close associate).  
  • Result: Wages plus some negotiated incentives on the growth impact your maturity, notoriety, experience, credentials, licenses and fundraising efforts will have on their business (deferred compensation – in an IRA or profit-share), means you can cap out your $14k while still building something you can collect on after you turn 65).

Business Owners:
(you own or operate a business but your income is W2 or Stock)

• Step 1 – Change your W2 to the $14k cap (and/or pay someone in your household on W2)
• Assets – Use any available business capital to buy things that enhance your business today but can be SOLD when you turn 65.  Your balance sheet drives your stated income.*  (this could include real estate, vehicles, purchasing a competitor, mergers, etc…)
• Tax Credits – Our tax code is complicated and you really need a professional to do things right, but if your business qualifies for tax credits, now is the time to use them (Solar, Film, Vehicles and Organic Farms are creative ways that businesses and individuals reduce their liability.  These are most exploitable when “growth” or “marketing” is of genuine interest…but they are still useful as an excuse to acquire something, without tax liability, which you can profit from later [when you liquidate it as an asset]).

* A note about “Balance Sheets” as a rolling strategy.  Banks and Public Companies utilize this strategy and our economy essentially revolves around it.  In fact, it is partially the reason why some banks are taking their time foreclosing on so many properties which are currently in default - it isn’t that they lack the device to execute foreclose – they haven’t quite figured out how to get those bad assets off their balance sheets once they take them back from the borrower.  Simply put (from a mortgage company perspective), “missing money” is less ugly on a balance sheet than a “bad asset”.  If you are creative enough to present a balance sheet solution to mortgage companies, you’re the next overnight millionair (my apologies if you’re on SS…you’ll be taxed twice on the earnings).

GENERAL:
(more generic ideas)

• IRA – Utilize your Individual Retirement Account fund to invest in something that has a 3year maturation (there are plenty of non-stock, unconventional places you can utilize those funds and still have it remain outside tax liability until you have to rely on it for income).
• Start a Business – find a dozen like-minded associates and start a busines (30% x 10 people = 300%).  Surely there is an investment (like say, real estate, backing an inventor or young entrepreneur) that can have a 3 year delay on a capital return.  In three years you’ll be 65 and there won’t be such a penalty to enjoying the fruits of your risk as “income”.
• Concede for Health reasons – Changing your income (regardless of your business/employee status), while not being eligible for MediCare yet can create opportunities for “low income” eligibility of other health care coverage (Massachusett’s comes to mind).  Accept the caps on income in exchange for savings on your healthcare expenses.  You’re not dying, but maybe COBRA or your former employer’s/business healthcare plan is the thing preventing you from surviving on your anticipated income.  Go back to work part-time or reinstate your self-employment activities after you turn 65.
• Become a Consultant – 1099 income allows certain expenses to off-set your income as a “self-employed” person.  Hell, we could use you at Mahar Enterprises, Inc.   We are a creative solutions company with creative compensation plans – we could use a talented person that still has gas in their tank (and believes in the independent entrepreneurial spirit of America).

NOTE – I’ll fall on my sword, if I’m wrong, but:  Major economists, strategists, authors and commentators say that one of two things will happen in this economy.

1.) Hyper Inflation or 2.) Depression

I am predicting that it isn’t one or the other, but rather half of BOTH.  Inflation will be first. History tells us everything we need to know about how nations find themselves in these situations (and how they respond to it).  It will happen within 18 months.   Strangely, a flailing economy can be a good thing if you have your house in order (and more reliance on “non-cash” support systems).  Get a plan and stick to it.  If I’m wrong, early retirees still have a problem to cure for their own life (the three year gap between health coverage and earning caps).

Okay – that’s enough for now.  Call or write or comment if you like.  Send me a note if you’d like to become a consultant or partner in one of the many projects our team consults on.  I worked all evening on a contract last night so I’m gonna go watch an afternoon On-Demand movie with my dad (he makes awesome popcorn!).

Happy Independence (it isn’t just about a single day of the year).

Mark

“Wing Theory” for Business

…so I was sitting around the other night, thinking about how business navigates the marketplace…and how the market may or may not actually respond as much like a fluid as many market professionals would like to believe.  If it were a fluid…[insert idea].

It occurred to me that Bernoulli’s principle is simply a scientific statement of how fluid reacts (pressure, speed, distance)…and that science is applied with great success for many innovations (not the least of which is an airplane wing).  There you have it:

WING THEORY for Business (TM) – utilizing Bernoulli’s principle as a creative basis to determine strategic modeling for business, where the market is a fluid.  Designing to gain altitude/distance or less pressure in business as a result of an efficient design.

I decided to diagram my thoughts as it relates to “altitude” in business.  A wing is for flight, right?  Let’s give your business wings.

I’ve attached a PDF for the curious and included preview images.

Bernoulli For Business (“Wing Theory” pdf)

In short – the innovative element of modeling a business in this manner is that it places a hierachy on management, while also labeling (and illustrating) the most important component of a busines (the “high spot”).  That “most important thing” is different in EVERY company (something that conventional business modeling doesn’t allow for as efficiently in visual depictions).

The tallest column in the structure of a wing determines both the radius of the wing and the potential for “lift”.  It illustrates a requirement for all the supporting/surrounding elements – what relevance they play in giving a business the shape necessary for strategic “lift”.  Weaknesses in a business model are more visually identifiable as well. 

There is way more to it than that, but this 4 page illustration very clearly communicates the broad strokes of adapting conventional business designs, while treating the 21st century marketplace as it should be interpreted (a fluid that can be navigated with the right design).

It isn’t science as much as it is a really just a clever/visual analogy.  In any case, this depiction allows for the most simplistic illustration of three simultaneous components (all of which are sometimes difficult to communicate on their own, let alone together):

1. linear hierarchy (business processes)
2. business philosophy (brand & market focus)
3. management strategy (strengths are strengths)

Enjoy,

Mark

Off-Shore Companies

Why are larger U.S. Corporations moving off-shore?

Simple – the COST:  Migrating off-shore results in a ”Net Tax & Maintenance” cost of 20-22% Net Income Burden…as opposed to the highest corporate tax rate in the world (35% U.S).  As not all corporations qualify for government handouts (in the the form of tax incentives) and many lack the administrative infrastructure to lobby or apply for these subsidies, the simple alternative is to level the cost of doing business with one simple word, “geography”.

Are you considering establishing an off-shore enterprise?

At a 22% Net Burden, this still may not be the most favorable solution for some small companies (because the federal tax code may have more favorable advantages if you “qualify” for the ever-growing list of things that Congress sees fit to exempt from the tax code).   Congress has what some would call a bad habit of attempting to “steer” business towards their intended centralized design for a consumer economy and your cost of eligibility may be less than the cost of migrating. 

Another consideration to keep in mind is that once income is abroad it typically must stay abroad (for tax compliance).  Measuring compliance against an Owner’s compensation plan/exit strategy, there may be additional considerations to increase Owner’s W2/Personal taxable income (adding personal tax liability or averting that new liability with added personal retirement infrastructure).  There is an inherent cost of establishing or protecting income reported through W2 as opposed to Scheduled earnings.  That is a good conversation for your tax professional. 

SERVING THE RIGHT MASTER:

I am personally an advocate for a 15% Corporate U.S. Tax and removal of all federal tax loophole/subsidies through a simplified tax code (the two must happen in tandem or there will continue to be losers on both sides of the job creation argument).   There is a third argument of solvency but, candidly, “government spending” (more aptly, “restraint from spending”) is a discipline that can’t be cured by the tax code – that is a whole other topic.  For the topic at hand, it is my personal opinion that legislators should not punish enterprise or pick who is and isn’t relevant in a free economy.  Until such time as Federal Legislators enforce an environment that is friendly to job creators and doesn’t reward select companies for a central solution agenda, Mahar Enterprises, Inc. is happy to help less agile small companies legally move their corporate presence off-shore (or any other strategic alternative).

A simplified tax code would change corporate burdens (requiring the services of fewer accountants and lawyers) while increasing tax revenue to the Federal Government.  I want to see it happen and I remain hopeful that all previously migrated corporations will return to their domestic roots.  Until then, I have an obligation to my clients (and other countries have more realistic tax rates for relatively low cost of migration).

ASSET MIGRATION:

Some might aspouse the virtual fluidity with which “holding companies” can transfer their assets in this technological and patent-driven market (given that many holding companies are a “paper change”, rather than a physical operational relocation).  I would point out, however, that the U.S. Patent and Trademark system is an important infrastructure to intellectual property holders, which provides a laundry list of protections (along with an abundance of practically “institional” legal precedent for domestic properties and rights-holders)…all of which may pose a higher migration risk to ”intellectual property holding companies” (Mahar Enterprises, Inc. included).  We would be happy to do a cost/risk assessment in conjunction with your legal and accounting team to assess any impact that migration may have on your intellectual property, but the point here is not to sell ourselves – the point is “we highly recommend an indepth evaluation of your intellectual property” (even if you hire someone else, please do it before even entertaining an off-shore decision)…and to weigh those considerations against the alternative.

COMPLIANCE:

Depending on your resident state, off-shore corporate compliance requires a “real” office with human beings, duplicate equipment, a board room, payroll infrastructure (sometimes all payroll processed through the foreign entity) and in some cases “on-site executives” (legally empowered executive level management; CEO, VP and/or COO to be resident to the foreign corporate headquarters rather than the domestic market area). 

Off-shore income reporting does not mean “hidden income”.  Sheltering a corporation on foreign soil should only be entertained for legitimate enterprise, in order to achieve a lower (and compliant) liability than the alternative.  If your intentions are to avoid reporting income, you won’t be in compliance with U.S. or State Law anyway.  Two jurisdictions already monitor your compliance for fraud and liability (State & Federal), with a dizzying tax code and redundant regulations.  Why compound this scrutiny and penalty by adding the jurisdiction of a third government entity?   If you are breaking U.S. Law, it doesn’t matter where your company is “based”.  Don’t be an idiot.   If you are, however, seeking a legitimate option it may very well be the best option.  Consult an accountant…then a lawyer.  At that point you’ll be equipped to budget for a migration support system (like ours) or consider the alternatives with a keen eye on risk assessment and life-cycle.

CONSIDER THE ALTERNATIVE:

There are tax incentives that may exist outside your industry (as a simple line-item deduction).  Some of these things simply require you to think “outside of the box”.

Example:  Did you know that if you produce a documentary about your company or leadership (or industry), with the intent of packaging it for retail or distribution (as a “Movie” or “Production”) that you qualify for a tax credit in many states (in addition to Federal Tax Credits)?  Do you have to advertise?  What is your advertising budget?

In some cases, this single “line-item deduction” (no schedule) essentially becomes an advertisement (one that people could foreseeably PAY to view or that a Network pays you to air) can off-set your tax liability for less effort/expense than migrating your company off-shore.  Not only does it feel more patriotic, but you have to advertise anyway.  Why not turn your tax credit into a potential piece of intellectual property? (with a potential revenue after it serves it’s initial dual purpose of advertising and tax exemption)

Packaging affordable alternatives is what we do…and that one example obviously creates four tiers at which there exists potential recoupment of investment (Tax Exemption, Marketing Savings, Licensing, Retail – to say nothing of the proper presentation resulting in branding from a social responsibility standpoint).  No smoke and mirrors.  These and countless other creative domestic solutions are available right now, through Mahar Enterprises, Inc. as part of our proprietary “passive marketing strategy” and we would be pleased to offer you an assessment.

Regardless – Through any alternatives you might consider, there should be a sequence of qualifiers – Compliance, Cost, Savings, Life Cycle.  Humbly, I would submit to you that the life cycle of foreign profits is “tax light” (foreign wealth accumulation – for tomorrow), whereas the life cycle of strategically executed profit is “tax neutral” (domestic economic agility – for today).  You don’t have to be a uniquely qualified, lobby-backed or administratively savvy corporation to exert your inherent agility…you just have to be proactive and compliant (domestically or abroad – whichever the case may be). 

“How” you use an asset or resource can be just as beneficial in reducing your liability as “where” you do business. 

Simply put: Geography isn’t everything (it is just one thing).

CONSIDER THE SOURCE:

We do not offer legal or accounting advice.  As either a partner in your migration effort or as a partner in your domestic strategic solution (passive marketing strategy or other proposed alternative), our role is to provide you with a compliant model – identifying any obstacles to achieving ”integrity” for your intended life-cycle (as advised by your legal and accounting team, in conjunction with our resources).  Please seek legal and accounting advice prior to engaging our services. 

We also have a “horse in the race”, as they say – we want your business.  Our opinions on this topic are inherently biased.  I personally believe that there is nothing immoral or unpatriotic about averting the blatantly selective tax grab that has been perpetrated by congress (and at the hands of lobbyists).  If congress didn’t convolute the marketplace, dilute the natural order of supply and demand, attempt to buttress failing industries (and their failing leadership) or incentivize failure, U.S. Corporations would have no reason to pursue a more clear and predictable alternative.  I’m a capitalist (just as my clients are).  We are here to earn your business and we have a perspective.

Business is conducted aggressively when it can be forecast with even the smallest certainty (there will always be risk-takers who see a straight line through even the most dynamic conditions).  Congress, however, has effectively fogged the eyeglass of many otherwise savvy and risk-willing corporate leaders…removing all sense of depth-perception from the marketplace.  The maxim that “perception is reality” is only true for business in the sense that perception as view of the market is what drives business decisions (and business brings ideas into reality).  Sometimes the importance of sequence (linear concept) gets lost with politicians (politics is inherently philosophical – consisting within a theoretical sphere of implications…not a mostly linear science as business is).  Congress would have citizens believe that a social consciousness is what creates perception/reality.  I would argue that social consiousness only impacts demand, whereas “supply” is a device of the business community.  As congress pushes on one, the business community will continue to find ways to AFFORD the risk required to pull on the other (supplying an idea with it’s birth into reality by leveraging resources – leveraging risk).

As I type this, the Federal Government is half-way into the fiscal year without an approved budget, while adding to a record deficit and essentially debating the constitutionality of financial insolvency as the debt ceiling caps for a fourth time in as many years (if that doesn’t demonstrate an abandonment of linear thinking, sequence, and consequence, I don’t know what else to tell you).  This is the hobgoblin of philosophy…just as the quest for agility is the hobgoblin of enterprise.

Corporate Migrations are a device of congress and a pragmatic risk assessment to many corporations.  Politicians set the game.  Corporations follow the rules.  At Mahar Enterprises, Inc. we only work with clients who are interested in following the rule of law (and I personally still think this is the greatest nation in which to launch a business).  It is because of our patriotic domestic interests that our focus on risk assessment and a life-cycle are weighted in ”domestic agility” …and drives the bias of our recommended services (it keeps JOBS and REVENUE domestic…while migration does have benefits for some, but not all, corporations).

Our/my perspective should not be the only perspective you seek in a consideration to “spend your way out of tax liability” (and I would point out that this statement feels counter-intuitive for a reason – listen to the little voice in your head).

Be proactive -  exit strategy, life-cycle and domestic agility are far more important than lowering your tax burden (and you can design to achieve all of them with the appropriate strategy).

This is one opinion from one source.   Thanks for visiting.

Mark Mahar,
President

Valuing a “service”

One constantly shifting factor in a service business is finding that magic “happy medium” between the divergent concepts of “cost” and “worth” (what it costs your business to be useful to a client and what you think your clients are willing to pay for something useful).

In today’s economy, keeping a steady workload can sometimes force you to abandon both of those considerations in favor of approaching the problem from a more survivalist approach: “How cheaply can I afford to offer my services?”

Before you undervalue your services for survival (or undermine the market your competitors have established FOR YOU), let’s take a look at the cost of doing business.  In this example I’ll break down a Owner/Operator service business (Self-Employed “wage earner” as opposed to “business owner” who employs many).

There is a dramatic difference between earning a wage and owning a business – I’ll discuss that in another article.

In either case “time is money” as they say – so I’ll start with wages (and some assumptions):

• Assumption 1: Let’s say you’re a billable independent service provider w/$15k in supporting equipment and/or software (musician, photographer, videographer, graphic designer, web designer, writer, analyst, etc…).
• Assumption 2: You don’t have any employees and your business operates with the least amount of overhead possible.  Whenever something gets out of your area of expertise you hire other subcontractors to help you pick up the slack.

TIME: For this example I’ll use a $50,000/year salary as a baseline (rough national average).

For a W2 employee earning $50k/year it would cost the employer about $65,000 per year (taxes, benefits, insurance, etc…).  Sole Proprietors are not W2 employees but they do still have liabilities on their earnings and a responsibility to their retirement planning, all of which will likely make their costs about the same.  That means if you want to earn $50k/year you have to bill $65k/year (that is the base pay multiplied x 1.3).  Want $100k a year? Use $130k for the math.

MATH:

• $65k/52weeks = $1250/week
• $1250/36hours = $35/hour

Why 36 hours?  Even if you work a 50 or 60hour work-week it isn’t all billable to a client – you own your business and you don’t charge your customers by the hour to do your own books, deal with your accountant, plan your marketing and advertising, pay your bills and bid jobs, etc…  It is reasonable to assume you will burn at least 10hours a week that you aren’t paid for.

Using the above math we have established that your survival as a “wage earner” (not a business owner) requires you to bill for your time at a minimum of $35/hour and for a minimum of 36hours/week (assuming all client expenses are reimbursed at exactly what it costs you).  That’s the cheapest you can work (before factoring in anything like additional equipment, job materials, insurance liability on subcontractors, etc…).   It doesn’t matter if you work in your business (or on your business) for 60 hours each week – you still have to bill at least $35/hour for 36 hours (or $1250/week).

OVERHEAD / SUBCONTRACTORS:

To determine whether you are charging the appropriate markup on subcontractors/vendors, you simply need to determine three things:

1. Does the difference between what you pay your vendor and what you bill your client equal your minimum rate after factoring in the amount of time it takes to manage/communicate with that vendor? ($200 in markup in a situation that takes you 10 hours to coordinate the work of your vendor only equals $20/hour).
2. Can your subcontractors/vendors provide services at lower rates than you presently charge your client? (if there isn’t any built-in margin you will want to either raise your rates to create a natural margin or value a quote using #1 to calculate the margin)
3. Is the perceived value of what you can provide by using a vendor or subcontractor worth the “perception” it has on your rates? (if you charge a customer $35/hour but your graphic person is charging $100/hour what is the perception of your talents to your client?  This is how you determine whether you quote a “project” or an “hourly rate” because the perceived value of a project may be completely different than the perceived value of your time).

ASK YOURSELF (do these assumptions match your business):

1. Can I bill 36hours/week in my field? (If not, you need to divide your weekly target by however many hours you can actually bill to a client).
2. Can the clients that I have access to afford my rates?
3. Can I deliver my service reliably at this rate? (and have client successes result in more work)
4. Is my rate too affordable (this is a perception…and is mostly based on the market you work in – sometimes pricing yourself too low can actually hurt your ability to be taken seriously)
5. Am I valuing the cost of my education?
6. Do I have more than $15k in equipment?
7. Are you above or below “average”?

In Short (this example):  The least you can charge is $35/hour.  The most you can bill is 36 hours.  Is that a value for a useful service?  Is that enough to survive in your world?

PERSONAL TAKE:

At Mahar Enterprises, Inc. our base rate is $65/hour (which is based on my personal baseline for all consultants).
The only time we charge more is when we can’t handle a scope of work with our existing pool of talent (or when travel is required).  Travel changes everything – if only because most of the expense of my business is the equipment, software and technology which all live in my office (it isn’t as mobile as I am personally, people still need it in my absence and it has to be “duplicated” at a cost that is always applied to the job at hand for my clients).  We have established a few services which are budgeted lower because we have made them more efficient (and in some cases they even replace “advertising”  – a cost we would otherwise incur, so we can afford to apply the savings to that service).

Our competitors charge $250/hour for some of the services we provide.  We have chosen to undercut the market so aggressively because the concern of “perceived worth” is less important to me personally than is actually “delivering something that any client can afford” (and doing it better than someone who charges so much more).

Because our core services are either “Delivery” or “Management”, we can remain focused on the simple cost of “our time in delivering the service” (and not worry about the perceived value of what we are delivering).  Vendors worry about that, not us.

Each business is different.  I value services based on my ideology of “removing handcuffs” from business owners.  Everything has a cost.  We operate on the most basic “Cost +” mentality rather than the value method our competitors and clients use (their method being more of a salespitch or rationalization which says, “this saves you $X so it is worth $X”).

Let’s be honest: If it doesn’t save you money or make you money it’s not worth doing.  The perceived value and the cost are two different things.  I couldn’t care less what someone says a service is “worth”…all I care about is that my clients can afford the “cost” (and that the cost is worth incurring).  In answer to that question we’re always the most affordable and creative solution so I don’t have to defend the perception of “value”.

TO BE CLEAR: We don’t always recommend the “Cost +” approach for our clients in THEIR BUSINESS because the reality is that successful business revenue models rely on exploiting “perceived value” (in my business, however, I’ve reserved perceived valuations for PRODUCTS…not SERVICES).  For the purposes of Mahar Enterprises, Inc. we’ve simply shaped our perceived value as “the most affordable solution for a truly necessary service” (rather than demonstrating “return on investment” in order to emotionally provoke clients to choose us over our competition).  I personally find it easier to clearly say to business owners “once you decide something is necessary to your business, we are without question the most affordable place to get it done properly”.   That approach may or may not work in your business but it works for mine (but I am also a business “owner” instead of just a “wage earner” – as mentioned, I’ll discuss the distinction in another article).

Feel free contact me to schedule a valuation study of YOUR RATES.  We can do it under an hour, in real time and it costs $65.  We conduct our services with complete confidentiality.

Regarding MY VALUE: I look at it this way - if a client doesn’t feel it is worth $65 to formally dissect their rates/business and gain access to some really candid/helpful advice, they might as well stop shopping consulting services in general because my competitors start at $150/hour….and I already gave them free advice (above).

Doing business is easy…but only once you’re valuable and useful…as an enterprise.  That starts with “rates”.

- Mark

UPDATE: 9/24/11

After 11 years of operating with minimal overhead and providing all services exclusively with in-house talent, our workload has required that we add production personnel and programmers (all of whom are $100/hour or more).  As a result, we’ve been forced to modify our rates.

Beginning October 1, 2011 our 2012 rates will go into effect at $130/hour (which is a 30% margin on contractors, and includes use of all production facilities at our disposal [no room rental fees for any production, taping, broadcast or commercial media]).