Should I charge my clients a setup fee, and how should I structure my offer?

Votel recommends combining a one time setup fee with a recurring monthly fee. You can also add a commitment, such as three or six months, and you decide what is included in the monthly price.

Always include a recurring piece. This matters most for transactional services that end, such as building a website or running Facebook ads. The software subscription keeps the relationship open, and the client keeps paying after the project work is done.

How much to charge: a common guide is a setup fee of at least one month of service, so if you charge $997 a month, charge at least $997 to set up. Depending on the client, setup fees of $1,000, $2,000 or up to about $5,000 are reasonable, for example for a personal injury law firm. Tie the amount to the value you provide.

What it covers: the extra work up front, such as installing and tweaking the snapshot, a discovery call to learn where AI fits at each touch point in the business, building a custom agent, integrating with the client's tools (for example their CRM and project management system) or building a database reactivation sequence.

How it is billed: normally the setup fee does not include the first month. The setup fee and the first month are both billed on day one, so the setup fee is extra revenue on top of the subscription. If you run a trial with a setup fee, the first month can be billed later. Splitting the price into a setup fee plus a monthly fee also tends to sound like a better deal than one large number.

A setup fee is also a negotiation lever. Many people dislike paying up front before they see results, so offering to waive it (telling the client you normally charge a setup fee but will waive it for them if they sign up) can help you win the client.

When you may not need one: if you only plug in a snapshot, create the sub-account and enter the business name, a setup fee mostly adds friction to the sale. Charge one when the client asks for extra work.