I like to see some very old TV shows like “The Waltons”. Some might remember this 70th TV show with “Good Night John Boy” in the end. What I really like is that these simply and short episodes have a story to tell, simple to understand and people can see the link to their own reality. Even today a lot of things have a valid point, especially when it comes to integrity of people. When I look at all the stories people telling me about their SkatteFUNN experience with consultants, you can make an own TV show out of it. It has all parts which is needed for a good movie, like greed, love, hate, loyalty, trust, lawyers, police, parties and money. Sometimes it sounds more like Sergio Leone’s “the good, the bad and the ugly” with Clint Eastwood from 1966 or Oliver Stone’s “Wall Street” with Michael Douglas.
When remembering “The Waltons” I was always impressed what level of integrity was shown by John Walton, Sr and his clear way of doing things in having principles.
Integrity is important when it comes to the relation between the client and the consultant. And we all know, when the game is about money, there is always someone who tries to find his edge, his advantage to earn better money. There is nothing bad with that, but at some stage, people react very negative when it goes a bit over the line.
This has created quite some negative reputation in the SkatteFUNN world when it comes down to consultants and that’s why I write this blog as I got “Why do you do this” questions several times now. I still believe that there is a clear need for business consultants and also a broad market demand for supporting the SkatteFUNN application. But I also believe that the time of cowboy business from the Wild West with Las Vegas Business models and unrestrained money making should be over.That’s why I try to put some light into it so people have a better understanding and can do the decision themselves if they need help or not and if yes with whom and for what conditions and prices. And I am a very strong believer in that people should have the choice. Information is the basis for every decision, so let’s move on after my disclaimer ….
It is my intention to put some light into SkatteFUNN and regularly upcoming questions I receive. It is not meant to be totally complete, comprehensive guide, covering everything and some details might have changed. Tax rules can always change. For this, please have a look at the websites of Research Council of Norway which is available in English under www.rcn.no or call them directly.
When it comes down to consulting and their prices, one major argument I always hear is risk, that’s why I believe we should look into this a bit more since it is one major or maybe THE major criteria.
There is always risk in doing business, also in the SkatteFUNN services business. From a consultant point of view there are several risk factors to look at.
First there is the pre-sales risk. Means talking to potential clients, meeting them, quotation work and eventually sign the contract or not. This is a standard risk, which you can find in any business. So nothing special with that, only that it has to be calculated into the final price somehow.
The first major risk is the level of rejection for the application. The Research Council of Norway self has published numbers that the success level for 2014 was over 81% for all applications. This is already quite high. Nevertheless I believe that a serious consultancy must have a success rate close to 100%. Why ?
For a professional and serious SkatteFUNN consultant, it shouldn’t be that difficult to bring the project over threshold that it gets approved, when it is eligible to be a SkatteFUNN project. SkatteFUNN is not a competition it is a “right to get”. And when the consultant is serious, he also says “NO” sometimes. Because when he says “YES” to every project, he will automatically sink his hit rate by trying projects which are not fitting that well. As you might remember that I am not really a supporter of “what is not fitting, we make it fit”. “Stop” is sometimes the better alternative also for the client.
In any case 81% or 100% this can be seen as marginal or – close to zero – risk of losing the SkatteFUNN project and will allow cross financing with other projects in case of loss from a consultant point of view. Means when one project gets rejected, the next 8-9 will be approved most likely. So when people talk to you with customer scaring scenarios like “Boooh, this is complicated and risky”, think about how serious this is.
There is no reason to use a consultant for the danger of getting the SkatteFUNN application rejected.
Another risk or THE MAJOR RISK in terms of SkatteFUNN is related to the “no cure no pay” business model when the remuneration is a percentage of the money received back from SkatteFUNN. In simple words, your SkatteFUNN consultant gives you a supplier credit and does not know when and how much he gets for the job, so he puts an interest rate on top. Interest rate is always a function of risk. How this looks like and how much interest rate they take, you will see in my next blog. Plenty of variations related to this does not really provide a better understanding. So I hope you have enjoyed my today’s writing and never forget to press LIKE and share it with others.
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