How To Decide What Consulting Fee To Charge

Consultants are a valuable resource to the business world and individuals. Each year the demand for consultants grows and more and more people with expertise in a field are choosing to enter the world of consulting. So how do you decide what consulting fee to charge?

The first question you have to answer is what is your time, your expertise, and your experience worth. It can be a bit tough deciding what to bill your clients and there is no industry guidelines to follow. You want to be fair but you also don’t want to work for nothing.

Start by looking at what you are being hired to do and why they are not using their own staff to complete the job. Sometimes companies will hire a consultant to obtain an unbiased opinion.

Employees of a company tend to go with the flow of what they believe their boss wants to hear. After all he writes the checks. As a consultant you are an independent and so you have no problem with going against what you think the company wants to hear or voicing your opinion. Often this is exactly why companies choose to use consultants rather than staff members.

Believe it or not sometimes companies hire consultants because it’s actually cheaper to do that then use their own resources. You might find it hard to believe that your $80 an hour rate could be cheaper than what a staff members wages work out to but if you do the math you’ll see what I mean.

Let’s say an employee makes $25.00 an hour, then their benefit package costs an additional 40% and overhead is 45% giving a total hourly rate of $47.25. Now that employee works 1820 hours a year for an annual salary of $85,995. You on the other hand can be hired as needed. So let’s say you are needed for 12 weeks for a total of 500 hours, the companies cost is $40,000.

That’s a savings of $45,995 as well as the company gets the project done quicker. It’s a very valid reason why some companies choose to use consultants rather than keep someone on staff all year.

Your expertise is also another reason why a company might request your services. Sure the company team has people with plenty of experience as well but you bring a whole different perspective to the game because you are an outsider who has had experiences in many different environments. This combined with your expertise can shed a whole new light on a situation.

If you plan to make it the consulting world you are going to need to complete projects on time and on budget, and of course on task. Your quality of work is what your reputation will built on and companies are quick to refer a good consultant to another business and of course to call them again should the need arise. It’s always a bonus for you if you can complete the project early and for less money then you originally quoted. Even if it’s just a small discount like 10% the company will appreciate it and remember.

You are going to want to know your competition in the field and know what they charge, and what they offer their clients. Then you’ll need to evaluate if you can provide more services or different services than the competition, and if you can provide better customer services or a lower rate.

Sometimes the only way you can stand out from the competition is by having a rate that is lower. As you become more established and have a proven track record you will be able to increase your rate.

Once you’ve examined what you can offer, how you can offer it, and what you will charge it’s time to get busy and drum up some business. Your expertise, your ability to finish projects ahead of schedule, and your reasonable consulting fee should have you busy before you know it!

Deon Melchior is the Editor and Publisher of Article Click. For more FREE articles for your ezine and websites visit ArticleClick.com. Article Click is a free content article directory. This means that as a publisher you may reprint the articles that are included in our site, as long as the article is unedited and the author box is included with it's live hyperlinks.