Consulting fees, consulting fees…How do you set consulting fees? Here’s a guide to setting consulting fee rates. (It’s also applicable to those wondering how to set consultancy fees – an independent consultant is still a consultancy and so is a freelancer!)
When you become a consultant and throughout scaling or rebooting, you’ll need to set consulting fees. Consulting pay and fees can be worked out in several ways. Here’s some information to help you figure out what clients should pay a consultant (some clients are still prone to consultant fee sticker shock, though). With this in mind, you can determine typical consultant rates — what companies pay consultants for their hours, days, projects and expert opinions. Note that your personal experiences and background may influence how you go about setting your rate.
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Consulting fee models
The main strategies for setting consulting fees include:
- Doubling/tripling your hourly wage
- Using a daily rate for consulting
- Setting consultant fees by the project
- Setting consulting fees based on performance
- Setting consultant fees strategically using real-life data
- Charging what everyone else charges
- Moving to Solution-based Fees (best choice)
By the way, I’m happy to send this article to you by email, along with a free six-part  mini course – click here.
(Want even more info? Get 200+ pages on setting consulting fees in my Consulting Fees: A Guide for Independent Consultants).Â
Main Strategies for Setting Consulting Fees
1. Double/triple your hourly salary-based wage as basis for consulting fees
To set fees, some consultants simply take the hourly wage (plus benefits) that they would earn when working on salary for someone else and then double or triple it. If you’re doing this, you’ll probably find that tripling your hourly wage is the best move. Some consultants choose a triple rate because of what they call the rule of thirds — one third goes to your real wage, one third to expenses, and one third to administration, low utilization and bad debt. It’s pretty easy math, which is also a reason it’s popular. (If you prefer some help, use our hourly rate calculator for this step.)
Let’s say you make $60k a year plus benefits and you get four weeks of paid leave .
 ($60,000 salary + $15,000 benefits) / (48 weeks * 40 hours) =
= $75,000 / 1920 = $39.06
If you double this and round up to the nearest multiple of $5 or $10, your consulting rate should be about $80 an hour. ($39.06 x 2 = $78.12, rounded to $80.)
If you triple this, your consulting fee should be about $120 an hour. (Or $39.06 x 3 = $117.18, rounded to $120 per hour.)
I recommend rounding up to the nearest $5 or $10 multiple, because a $78/hr or $117 fee looks odd. And while that may work for certain big box discount stores, it’s probably not the approach that will work for independent consulting.
Of course, this assumes you use an hourly rate for your consulting services. Many people work out an hourly rate, but actually charge by the half-day, day, project or another arrangement.
2. Setting a daily rate for consulting (per diem rate for consulting)
To charge a daily rate, simply multiply the hours you work in a day by the hourly rate from the above example.
8 hours * $80 hourly rate = $640 per day
3. Setting Consultant Fees by the Project
Some consultants set their rates by the project. They estimate the number of hours they expect to spend on a project, then multiply by their hourly rate.
However, some consultants set their project fees using the value the client derives from the consultant’s advice. There’s an old joke about physicist Niels Bohr that illustrate this principle.
A company’s machine breaks down. The company’s owner, an old school chum of Niels Bohr, calls in the physicist for help in fixing it.Â
Bohr examines the machine. He draws an X on the side and says, “Hit it right here with a hammer.” The company’s mechanic hits the machine with a hammer. It springs into action. The company’s owner thanks Niels Bohr profusely and sends him on his way.
A few days later, the owner receives an invoice from Bohr for $10,000. Shocked, the owner phones Bohr!
“Niels! What’s this $10,000 invoice? You were only here for 10 minutes! Send me a detailed invoice.”
Bohr agrees to send the invoice. A few days later, the company’s owner opens a new invoice.
INVOICE
Drawing X on the side
of your machine    $     1
Knowing where to
put the XÂ Â Â Â Â Â Â Â Â Â Â $ 9,999
———————————————
Total              $10,000
Knowing the value of your work can go a long way in helping you establish your fees.
4. Setting consulting fees based on performance
Some clients offer consultants a share of future revenue, profits or commissions, pushing the consultant to a pay for performance model. Others offer the client a commission. Still others offer pay based on the results of the consultant’s work. Consulting fees based on performance pose several risks. For example, the company’s performance in other areas may affect the area in which you you are measured. It may take months or more to see the results of the work, meaning that the consultant will not see any revenue for a long period, effectively giving the company an interest-free loan. The company may not cooperate with you in implementing your full recommendations, compromising your ability to reach the potential you projected. Moreover, you may have a hard time checking to see whether the client has manipulated results. Can you be sure that your results are being reported accurately? Most importantly, you shift the focus from high quality planning to short-term gains. If you essentially become a partner by sharing in the client’s risk, you lose your objectivity. At the very least, seek a base rate plus performance pay or share of ownership. Sticking to contingency and performance-based fees opens a can of worms.
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5. Setting consulting fees strategically using real-life data
This involves several steps:
Setting a consulting fee based on working days
In this calculation, you base your charges on working days per year.
52 weeks in a year
Allow six weeks for vacation, stat holidays and sick time.
= 46 weeks
46 weeks x 40 hours = 1840 hours a year
Notice that this is a bit more precise than the estimate of hours we used earlier.
Determining your billable hours as part of your consulting rate
As noted above, you have 1840 working hours available each year. However, what percent of your time will be spent on work that brings in money, as opposed to work that helps you find clients but for which you aren’t actually paid?
 100% possible hours
– 20% spent on administration, running errands, paperwork, etc
– 20% spent on marketing, networking events, website management, etc
– 10% spent on other non-billable work
————
 50% spent actually working for pay
1840 hours x 50% utiliization rate = 920 billable hours
Notice that you might be working 40 hour weeks, but you’re not necessarily available for all that time. In the example above, it’s 920 hours.
Considering bad debt rate as part of your consulting fee
Despite your best intentions, not all your clients will pay you. Some will take weeks or months to pay, but a small percentage will never pay the bill. So consider this in setting your fees.
 Collection rate: 95%
 920 hours x 95% = 874 hours
Because I use contracts and am diligent about following up, my collection rate is almost 100%. However, the economy and how you set up your business may mean a less than perfect collection rate and it’s better to plan accordingly.
Rate of Pay as Basis for Consulting Fees
How much would you earn if you were paid a salary at a company?
$60,000 base salary + $15,000 in benefits = $75,000 salary
Salary / Billable Hours = Hourly Consulting Fee
$75,000 salary / 874 billable hours = $85.81
Overhead rates for consultants
If you’ve got the kind of consulting business that entails pure profit, you might not have to worry about overhead. But most consultants need to allow for:
- rent or mortgage interest
- utilities
- maintenance and upkeep
- property taxes
- Internet
- telephone
- cell phone
- office gadgets
- Internet connection
- laptop or desktop computer
- printer
- shipping and postage
- printer toner/ink
- home office supplies
- paper
- stationery
- business cards
- accounting (if you don’t do your own)
- legal services (in some cases)
- office furniture — desk, armoire, chair, shelves, bookcase, filing cabinet, lighting, etc.
- business licenses and permits
- insurance — health, life, disability, liability, etc
- car — insurance, maintenance, gas, lease
- advertising and marketing
- subscriptions
- professional associations
- meals and entertainment for professional purposes
- continuing education
- professional meetings, conferences and tradeshows
- cleaning supplies and cleaning services
- other
Divide the total cost of your overhead by your billable hours:
$5,000 overhead / 874 hours = $5.72
$5.72 overhead + $85.81 fee = $91.53 fee
Profit margin and consulting fees
As a consultant, you’re taking a risk and running a business. So it’s reasonable to expect a profit margin on your fees. Consultants usually mark up their fees by 10% to 33%.
 $91.53 + 25% mark up = $114.41
Since consultants tend to round to the nearest $5, our example results in $115 per hour rate.
6. Charging what everyone else charges for consulting
This last tip may seem silly, but sometimes it really does make sense to charge what everyone else charges for consulting. It comes down to what the market will bear and what your competitors are doing. If you fall in line by charging the same as everyone else, you’re signalling that you’re a worthy (qualified) consultant who plays fairly. You’re also making sure you get the base line rate for consulting in your market.
7. Moving to Solution-based Feesâ„¢
Given all this, in the long term, it’s better to move to a model that represents the value you offer and that allows you to move beyond the limits of charging by the hour. My Consulting Fees guide goes into detail about the steps to moving to Solution-based Feesâ„¢. Many people find that booking a strategy session or some coaching can help them get unstuck too.Â
Final thoughts about setting fees
No matter what way you set your consulting fees, be sure to use a consulting contract and agreement for consulting services.
Coming up with your consulting fee for the first time may seem daunting. However, once you’ve found a strategy in which you really believe, you’ll be good to go. You may want to revisit your decision from time to time, taking into account your experience, client feedback and even your competitors’ activities. You’ll also want to make sure you keep on top of managing scope creep.
Like this article? Get practical tips and 200+ pages on making money as a consultant! Check out my Consulting Fees: A Guide for Independent Consultants – ebook and print versions available.
Posts related to setting consulting fees and rates
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- Billing travel time rates for consulting projects.
- Sample consulting invoice
- New business line of credit
- Finance for consultants
- Consulting Fees: A Guide for Independent Consultants
- Discover Your Inner Consultant
 Looking for consulting salary information? More info here.
“Setting consulting fee rates” from Become a Consultant Blog at ConsultantJournal.com.
(c) Copyright by Andrea Coutu and Consultant Journal. All rights reserved. Reproduction or translation of this article or articles on this site in any form, without express written permission of the copyright owner, is prohibited.
Yikes. I always just took whatever the client said. Maybe I have more wiggle room than i thought.
The issue of not talking rates because of price-fixing laws comes up consistently, and has (at least in the U.S.) been proven false. As with nearly everything else in our litigation-riddled society, anyone can sue you for anything – but you’re not afoul of price-fixing laws if you discuss your rates and/or how you determined them with colleagues who are in the same field.
The notion that discussing prices with colleagues (or merely those in the same field) constitutes price fixing is incorrect, at least in the U.S.
In this economy (I’ts now Feb 2009), IT consulting rates are much much lower due to the competition from the H1 visa holders. As the jobs are low and the H1 visa holders are willing to work for scraps, dont’ even bother to triple your salary hourly rate for consulting. You’ll be luck if you’re a IT consultant and get $60 or $70 in this economy. If the government does not cut the H1s and keep the insourcing and outsourcing for IT, the IT industry will pretty much become like the Auto industry and other manufacturing industries where all the jobs are taken by insourced resources and by outsourcing.
Hmmm. I should take another look at the law. In Canada, I think it’s illegal for me to tell someone else what to charge. I can, however, discuss my own rate and how I got to it.
Hi What is the current market price for doing a Strategic workshop and writing the plan?
Is it a good idea to charge higher rates for out-of-town clients than in-town clients to cover travel expenses? Or to have a single rate for everyone with potential travel expenses included?
For years my job for corporations is to increase profit margin by reducing cost and saving money, lots of it. I thought, I’ve been able to do this for large companies but they get the benefit, I think I can do this for smaller companies but it would be me making the profit enhancement.
My consulting business model is to provide companies with recomendations to reduce cost structure – save a ton of money – and I also provide the system for the company to manage, just as I am doing for my current employer.
I am looking at charging a fee of $25K – $30K depending on the identified savings and based on the ROI timing – targeting one year.
What do you think? am I in left field?
Any thougts, comments, suggestions, clients
email MR.J345@yahoo.com
Wow this is great information thank you! By luck and serendipity I have gained unique skill set that is becoming more and more in demand. A former associate has informed me that there is an immediate need for just my unique skill set on a less than full time basis with a large DoD agency and the host of contract companies that support them (SAIC, Raytheon, Bechtel, etc) can you tell me does the Federal government set fee limits or guidelines as to what the DoD or the rest of the federal government can pay. And can I be an IC for more than one contract company that is bidding on the same piece of work?
Consaltancy cuts through all the professions not just IT. Think of Legal, medical,media, etc- the question is, should a consultant charge his fees based on the value he has placed on his service(s) coming from his expertise or rely more on the market forces of demand & supply? should he/she be constrained by the fact that someone else will charge less fees in order to secure the job? If no stadards orregulations of sorts, then the consultants fees amounts to a guessing game.
tony odiadi.
Is there any rule of thumb for negotiating a consulting rate? I proposed $90/hr for contract/proposal preparation for a very small defense contractor. They came back at $60. They are my first (and right now only) client. Is there a typical expectation of how far they’ll go up and I’ll go down? I don’t want to lose the client and it is only 8hrs of work per week. Also, I need to drive 2 hours each way per week to work for them – I was thinking of rolling mileage ($0.55/mile) into the rate – but what about gas?
This is my first consultant opportunity: to consult with a non-profit that received a grant for a teen mentoring program. Are the fee formulas mentioned on the site applicable to non-profits as well? I want to be sensitive to their financial situation, but not give away my services either.
Hello,
I have a year old consulting buisness and am now bringing on staff members(other consultants) to help with the workload. Can someone give me a sense of the formula for figuring out their rate on contracts. I know I have to account for my overhead and the company needs to make a profit but I am not sure what the range should be. Also do consulting firms let their employees/consultants be aware of the actual amount a client is being charged? I have had a few clients “leak” it to my staff and I have felt a bit uncomfortable.
Deb,
Have you tried working through the model above? My Consulting Fees Guide may be of further help.
Hello,
What is the best way to determine what other, similar consultants are charging (besides just asking colleagues?)
Gary, if you do a search for “travel” on this site, you’ll find some info on charging for travel time. However, if you use the above model, you should still be able to come up with a rate. One would assume that, if you travelled extensively in a full-time position with a company, you’d be compensated for it. So perhaps you need to mark up the base salary.
I am new to the consulting world and one of my first jobs requires me to be away from home for two week periods every 2 months. I have developed a fee based upon the models you presented for working at my home/office. However, I feel that this home/office fee does not adequately compensate me while I’m away for extended periods. Along a similar line is charging for travel time legitimate in the consulting world. To me travel time is lost productivity time or lost leisure time at home.
Thank you
Gary
The day rate is usually more than the hourly rate x 8, because there is risk you could work longer hours, making your effective rate much lower. Some clients like day rates because they can manage their budgets better. If a consultant starts working 12 hour days at an hourly rate, the actual cost would be much higher than they planned for in their budget. An example I saw was $80/hr or $900 per day.
That’s a good point, Will. That’s why I suggest using the hours you work in a day. If you’re expecting to work more than 8 hours a day, you should definitely use a different number for your multiplier.
That being said, if you work from 9 am to 5 pm, but you take an hour for lunch and two 15 minute coffee breaks, you’re really working 6.5 hours. If you’re there till 6:30 and taking those breaks, you’re still only working eight hours.
I think I’ll make this the topic of a future post. Thanks for the idea.
Mike, did you consider how much the agency is taking on top of that $59/hour or $75/hour? I think what Andrea said is applicable, too. If it’s a long term gig the rate is going to be lower, but for 1 day to 1 month, triple is happening all around. For a six to twelve week gig, double is common, too. Rates go up with increased need to find new work sooner…
I have been asked by my former employer to return and conduct adoption training classes for a group of ten perspective adoptive families.
I have a master’s degree in social work and I’m currently pursuing a doctorate.
What should I charge for my services?
Deborah
I am a social worker w/ a Master’s degree w/ a job offer to do consulting work for residential care facility…w/ re: to working w/ diff. levels/types of memory loss: staff training, environmental design, family counseling etc. I am not sure where to begin in terms of proposing a prof. fee and/or which model is best suited to this type of work? any suggestions would be appreciated….
This is great information but I will have to respectfully disagree with how hourly rate is calculated using multiplier.
In my example, I have 10 years of IT experience doing PM, Analysis, Coding, etc. I was employed by a top consulting firm and was paid $94K and my benefits come out to be $22K, which gives me an hourly rate of $59. Now, if I were to use double or triple multiplier ($118 or $178), I am sure no one in this day and age will give that kind of money.
By using Corp-to-Corp contract I am able to fetch in $75/hour in Chicago.
The model provided here needs to be adjusted to reflect 2008 time.
I just finished full time, five month opportunity billing $230 an hour. Of course, I alone did not take home that golden egg. In concert, I have several head hunters looking for “jobs” to place me in.
One technique is to build a placement firm as many companies work with up to 25 placement firms. That ghost firm can then be your placement firm for your contracted services. This way you are not submitting bid after bid for your professional services; rather you are placing your self.
Mike, I know several consultants charging out at $175 or $200 an hour for what you do. I certainly charge a lot more than $75 an hour and I’m in a lesser demand industry.
I’m wondering if you’ve established “consulting” positions where you’re essentially a contract employee. As I note in my Consulting Fees Guide, there’s a trade off when you establish a long term in-house contract. The work you are doing may not be entirely consulting-like in nature and thus you may command a lower rate.
Is there any rule of thumb when deciding what to charge a university? I have a potential consultant job for some technical work that they need done in a hurry (high value?) but I have no idea what I can get away with charging them.
Mike I’m not sure what your background is but we regularly charge 150-200/hr for experienced project managers/ enterprise software developers and for business intelligence related work. Anything less than $120/hr simply is not worth it for 1099 work, and if you are subcontracting to another consultant within your own business anything less than $150 is not worth it. $75/hr for 1099 is crazy. Your taxes are much higher to pay, you have company overhead to pay, your own retirement and insurance payments (health dental, vision, etc.), …, …, …
As it is curious.. 🙂
Rule-of-thumb for an independent consultant or interim on a (>75% utilisation) assignment lasting one to six months is a day-rate at 1% of the equivalent salary of an equivalent full-time employee. For longer assignments, the rate drops to one which is closer to a annual contract, with a day rate about 0.75% of the equivalent full-time salary. For shorter assignments, it is obviously higher but it is not possible to offer general guidelines.
I wonder if this will get answered!
I now know how much I am going o charge my clients…so, how do I go about finding these clients then?
Curious…
Why are all these posts (except the last) dated November 30, at 12:00am? I think they were OK last time I looked.
And why did the post I previously left appear briefly and then disappear?
Something strange is happening in Consultant-Land
Bill
I have taken off for 10 years to take care of my aging parents with Alzheimer’s.During this time I have been submitting my own successful legislation, staffing the bills all the way to passage. All on my own, out of my own pocket. So I have not worked for anyone. Totally out of my pocket. I wanted the experience, getting all of the bills passed was a shock to me. I also have been on two high profile boards, however all were unpaid situations. Now I want to get paid with my great background. I have no way of how to start setting a fee when I have given my work away for free. Now that my caregiving has been resloved, I have to pay the mortage and need to get started. Any suggestions
Hello,
Who can help me? I need to find calculation of payback period in business consulting.
Thanks
I have of Masters of Science in Counseling Psych with courses in Clinical. I’ve been at home for 19 years, but have extensive volunteer work in the field…began and worked a support group for homeless women 15 years ago that is still in existence and have done crisis intervention for at risk families for 13 years, working with a variety of local resources. I previously worked for 13 years in a psych. hospital, many of those years with children. I also have 4 grown children of my own.
I keep hearing there is a need in the local schools for someone to come in and consult with parents and teachers to give guidance and counseling for families who are struggling with emotional/behavioral issues. I can’t find any comparable position on which to base a fee. I would appreciate your thoughts. This is Baltimore County, (Towson) Md.
You could start by looking at what a teacher with your experience would make. Or someone who’s a manager/director at a non-profit. Don’t be afraid to ask around. Look at what your competitors charge. And review the value you provide — are you saving parents time, tutoring fees, lost tuition, etc?
Google is your friend.
What field are you working in?
Aside from the professional fees that they already charge, do consultants generally charge their clients travel fees such as airfare, hotel accommodation, mileage, travel vaccination, etc., as well as per diem meal allowance? How about things such as postage/courier fees? I am not a consultant, but the non-profit organization that I work for has hired a consultant and this particular consultant seem to be charging such things.
I’ve recently secured a consulting engagement with a VERY large retailer through a local consulting firm. This firm quoted a rate which according to my understanding is considered quite low. Their explanation is that because this VERY large retailer works a 45 hour week that the over time I would be paid drives the low rate. This is my first experience with consulting and don’t want to set the bar too low for myself by accepting this low rate. Can someone help a newbie out and provide some advice/guidance in negotiating a better rate? I feel like I’m being taken advantage of and if I continue to work with this firm I’ll be setting a precident that I will regret if I accept this initially quoted rate.
Are you sure it’s consulting and not simply contract work dressed up as consulting? The word “overtime” stood out for me.
That sounds pretty typical to me. The contract would set out the conditions. If you collected RFPs or quotes, you’d have a point of comparison, of course.
I run Masterclasses for large organisations on how to buy consultancy so I can pass on what I tell them is a fair rate for individual consultants or interims – there is not a lot of difference. Note that individuals are NOT paid at global consulting rates, for lots of reasons. For an assignment of two to eight months the daily fee is 1% of an equivalent annual salary. Incidentally, I’m in Europe where there are 225 working days in a year if you’re trying to work it out. For shorter assignments the rate has to be higher, so I am in the same park as the double/triple ratio in the article. For longer assignments the ratio falls to 0.75% of the equivalent annual salary, because then you are really looking at annual contracts. It does not go lower.
Very short assignments (half a day) should be very expensive but most consultants use them as opportunities to pitch for more substantial work so there is no guidance.
Regarding discounts and lowball offers that some correspondents have encountered. Do not set precedents: if you want the work, take it, keep your original rate but offer free days for a limited period. That way, you keep your integrity whilst getting your knees under the table.
I am happy to discuss this or related topics with anyone either here or off-line.
Bill
My former employer, a healthcare organization, has contacted me to return as a consultant to assist in training the manager they hired to replace me. This is a medical staff office where such things as credentialing, Bylaws, etc., originate. They have offered me $30/hour which isn’t even close to what my hourly salary plus benefits was when I left. I left for health reasons but was in the position for 28+ years and they have hired a financial analyst to fill the position and she knows nothing of the functioning of a Medical Staff Office.
Any direction from anyone?
Do you have other options? Are you desperate for income? It seems to me that, if they really need you, it would be silly for you to accept such a low offer. How do you benefit from this arrangement?
I am a systems developer and automation specialist with over 15 years of experience in all aspects of the IT industry. Until recently I have been setting a “per project” rate based on the estimated overhead and expenses I will encounter, plus an expected profit to cover living costs during the duraton of the contract. This method has not worked too well (especially with regard to unforseen expenses and client’s unwillingness to accept liability when such expenses are directly related to their project), so now I’m switching to a “per hour” basis.
I think what needs to be considered is not only the overhead (which of course you MUST cover) as well as the expected value your work provides to the client(s), but also their ability to pay such costs in any given economy. For example, a small business will find it far more difficult to cover your fee than a multinational organization. Therefore I believe that no matter what field of dicipline your consultation role covers, it is ESSENTIAL to understand the entirety of the company’s workings (their costs and profits) to set a rate appropriate to their means of paying. In my field of business, that’s not so difficult given that 99% of my past clients have hired me to automate large portions of their business to save literally thousands of man-hours per year. With that in mind, my rate could be equal to as much as 75% of those man-hours, and it’s still more reasonable for the client to pay than the entirety to “data entry clerks” manually performing the same task.
As I see it there is no “1 answer suits all” in the consultancy industry. Certainly with respect so some of the comments I have read, you should definatley NOT accept a lower rate than you could be earning as a 9 to 5 employee in a similar industry. That (in my view at least) falls into the category of exploitation.
Additionally (again with regard primarily to my experience in the IT industry) you MUST factor in for if you can complete a project faster than your competitors. In my line of work with automation systems, I can develop insanely complex software solutions in a miraculously short space of time (completing one such project in just 25 hours). To charge the same rate as a competitor who would take 6 or more MONTHS to achieve the same result leaves you out of pocket, and to an extent exploited by the “employer”.
If you don’t know what value you can provide to any given client compared to the average of your competitors, you need to figure that out BEFORE looking for consultancy work.
Never under-value yourself, but balance your value with the client’s ability to afford you. Once you figure that out, you can truely call yourself a consultant.
For me, I’m based in the UK and have been offered a consultancy contract by a prospective client in the USA. I am well aware that US laws work differently to here in the UK, and thus I will be getting a specialist lawyer to peruse the contract before I sign it. I shall be charging the prospective client for this service whether or not the contract is signed. In my opinion this is a fair expectation. Should the client require me to perform an on-site evaluation of their business (or should that be a requirement) this will be accounted for within the contract, and the client covering any such related expenses.
The question I have is… do I require any sort of legal documentation to perform consultancy services for a client within the US? Technically I’m not employed by their company, and thus a “work permit” should not apply.
Google searching has left me a little perplexed as to the answer, as so many ambiguous conflicting results provide no solid answer.
Would I be best set by consulting the specialist lawyer with this question?
If I provide consultation services to a US client, am I expected to pay US taxes as well as my income tax to the British IRS?
I am also faced with having to research what consultants in “similar” fields charge in the US (since it’s an unfamiliar enconomy to me) though since my field is incredibly niche (there are VERY few people in the world as versed in automation systems as myself) I do have something of a monopoly when setting a rate. Again, I shall remain ethical and base my rate on relevant enconomic factors vs the expected ROI the client expects from this project.
Sorry if this seems more like a rant than a useful comment, I just like to convey the suggestions I provide with a relevant background to show how I reached them.
I hope people find this useful and perhaps can provide a little insight into the questions I have asked.
I have 10 years as a municipal employee; 3 years in an entry level position and 7 years as a supervisor of a small unit. I also have approximately 7 years in Retail, again 4 years in an entry level position and 3 as a Asst Mgr. I also own and run my own fledgling website offering niche products such as comics and scifi books. I am considering whether or not to enter the consulting market, but I have no ide what to market my services as. My current thought is marketing myself as a Retail Management Consultant. I’d like your advice.
Nice post. I agree that charging % from performance only is too risky, better charge hour plus % of sales
I am a Brand Strategy Consultant. I made different calculations and all point out that your recommendations are correct. However, the truth in our business is that you have to go by the project.
This is a very useful article. I am looking forward to reading your book.
Gunter Soydanbay
Hi
I am a Health Information Professional and I run my own company. Right now I have an hourly rate of $55 that I charge. I’m being offered a job as an employee that would pay $34.57 per hour plus 4% vacation pay. Because my $55 per hour has to include paying my income tax etc., but the employment job wouldn’t how do I compare to see if the two rates are comparable?
Thanks.
Hi
I am a consultant and have a contract with a hospital. They are trying to make my position an employee position for much less pay.
When I asked them what was it about a contract versus employee they told me that by CRA rules they have to make me an employee. They also indicated that auditors told them they had to flip contracts to employees citing the same rules (but they weren’t specific about what those rules are).
I am a legally registered business and pay taxes and GST as any business would. I have an agreement that is signed yearly by all my clients. I have other clients and have had them for 7 years and this has never come up.
So is this true? I looked on the CRA website but couldn’t find reference to this – thanks.
Shelley