The reason consultants charge higher rates compared to full-time employees is because they should come and offer more value. Consultants provide value in the form of specialized knowledge, guidance and, most importantly, impact. 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 2000-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 start, 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. With a little knowledge and practice, you can trust your value as a consultant and ensure that your prices reflect that. Finding the consultation rate approved by GoldiLocks is easier said than done, but know that it exists somewhere in between. It's natural that you don't like the process of setting consulting fees, but you shouldn't have to give up money or sleep because of it.
As a consultant, you don't get paid for holidays or maternity leave, so you'll have to factor this time into your rates. So, whether you want to use the three-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. Many consultants and freelancers make the mistake of confusing average consultant rates with standard prices; that's not the case. However, some consultants set the fees for their projects using the value that the client obtains from the consultant's advice.
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 offering a 1-hour consulting session, consider the amount of preparation work needed and whether your client will be able to submit any follow-up questions after the consultation. When you become a consultant and during the upgrade or restart, you'll need to set consulting rates. Now that you know your consulting fees and are ready to launch, let us help you cross the finish line.
That's the beauty of consulting and freelance work: you can play with numbers to make them work for you. Here's some information to help you determine what clients should pay a consultant (however, some clients are still likely to receive a penalty in consultant fees). Your client wants a consultant they can trust, and that trust is established through negotiations and working together.