This is your starting hourly rate. If you feel it's too low, turn it up. The scope of work should be a major determinant of your rates, but it's difficult to estimate the price per hour or project. For example, you might find it faster to write a 2,000-word article for a company than to help produce a 5-minute podcast episode.
For example, if a client offers you a huge sum for a large project, you might analyze the work and find that it takes twice as much time and effort to do what a smaller project with a smaller budget rewards you. However, remember that these types of pricing still exclude the true value of your work. Consider the example of the Declaration of Independence. If you're doing business-disrupting work, that also comes at a financial price.
If a client asks: “How much do you charge for consulting? From the beginning, try to guide the conversation to the details of the project. For example, you can say, “I'd like to have a good idea of the scope of the work before we talk about rates. Sometimes, you'll have to compromise. For example, a customer's budget might not be able to afford it.
Instead of completely rejecting the customer (or having the customer reject you), guide the customer toward negotiation. When you become a consultant and during the upgrade or restart, you will need to set the consulting rates. Consulting pay and fees can be calculated in a variety of ways. Here's some information to help you determine how much clients should pay a consultant (however, some clients are still likely to receive a penalty in consultant fees).
With this in mind, you can determine typical consultant rates: what companies pay consultants for their hours, days, projects, and expert opinions. Keep in mind that your personal experiences and background may influence how you set your rate. To set fees, some consultants simply take the hourly wage (plus benefits) they would earn if they worked 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 option.
Some consultants opt for a triple rate because of what they call the rule of thirds: one third goes to real salary, one third to expenses and one third to administration, low utilization and bad debts. It's a pretty simple math, which is also one of the reasons why it's popular. If you prefer help, use our hourly rate calculator for this step. It all comes down to what the market is going to endure and what your competitors are doing.
If you stand in line charging the same as everyone else, you are indicating that you are a worthy (qualified) consultant who plays fairly. You also make sure you get the base rate for consulting in your market. Multiply that by your hourly rate and then add a profit margin of 10 to 20% for unexpected contingencies, and voila, you have a rough estimate of a consultant's fee per project. There are consultants who live in countries considered to be less developed and who can still charge and earn significant fees, especially if their client base is global.
That's the beauty of consulting and freelance work: you can play with numbers to make them work for you. Even if you have a full time job, you can start a part-time consulting business by working nights and on weekends. Because your fees are an expression of value, low consulting fees don't necessarily generate work or respect. Most consultants I know add a margin of 30 to 50% to their hourly rate to account for all of these expenses.
Keep in mind that you can work 40 hours a week, but you're not necessarily available all that time. So, whether you want to use the 3 times per hour method for equal rates or the more complicated 52-week method, your initial fee is critical to the long-term viability of your consultancy. I recently joined a specialized consultancy (a small team over 50 years old) that is part of an international consulting and advisory organization. Regardless of how you set your consulting fees, be sure to use a consulting contract and agreement for consulting services.
I speak of decades of experience advising on my own and founding my company when I say that for people like us, there is nothing more rewarding than running their own business. This last piece of advice may seem silly, but sometimes it does make sense to charge what everyone else charges for consulting. However, setting your consulting rates doesn't have to be an experience that causes you anxiety and keeps you awake at night. With a little knowledge and practice, you can trust your value as a consultant and ensure that your prices reflect that.