Author Topic: How to set a consulting rate/fee?  (Read 2879 times)

etselec

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How to set a consulting rate/fee?
« on: April 15, 2013, 12:00:31 PM »
Mustachians,

I'm courting a small part-time consulting gig, and need advice on setting my hourly rate.

Here's the deal: I am two years out of college and have a full-time job that I like okay, but probably won't stay at past six months/a year from now. At my current job, I do a little bit of work in the tiny niche field that this company (they're a for-profit, let's call them Awesome Inc.) focuses on, and apparently people with any experience in the field are kinda rare. But I'm only two years out of school and it feels flat-out ridiculous to bill myself to Awesome Inc. as an expert in anything at all.

Most of the work I do at Current Job is less skilled than the tiny niche area, and Current Job is nonprofit while Awesome Inc. is for-profit - which leads me to believe that my current salary isn't a good guide for a consulting rate. So how the heck do I determine this? The field is so tiny that I have no idea how I'd even go about finding other consultants to ask their rates.

Any advice? Similar stories? I'd love to hear how others have solved similar problems.

daverobev

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Re: How to set a consulting rate/fee?
« Reply #1 on: April 15, 2013, 02:13:43 PM »
Find your hourly rate at your employed gig, and... double it.

More advanced work, niche work, for profit; no benefits, etc, etc.

Honestly I have no idea; the usual markup vs an employment is ~50% but it sounds like you're doing more on the side gig.

If you know and like the people you're side-gigging for.. just ask them. What do you think is reasonable for my time? Bearing in mind x, y, z I was thinking ballpark a to b..

Don't get too greedy, but don't undersell. How much 'arsing about' time is there that is NOT billable? How much travelling, dressing up in a suit with shiny shoes, etc?

etselec

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Re: How to set a consulting rate/fee?
« Reply #2 on: April 15, 2013, 03:13:33 PM »
Thanks for the advice! They wanted to move quite fast, which I suppose is a good sign, and we settled on (you guessed it) pretty much exactly 2x salary, if I include benefits in my salary calculations.

Since the side-gig has almost no overhead costs, I'm looking forward to banking this extra cash and growing my 'stache that much faster!

daverobev

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Re: How to set a consulting rate/fee?
« Reply #3 on: April 15, 2013, 06:20:44 PM »
Guesstimates are a wonderful thing :)

michaelrecycles

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Re: How to set a consulting rate/fee?
« Reply #4 on: October 30, 2013, 01:09:32 AM »
In case the OP sees this, congrats on snagging the gig! Questions for you or anyone else willing to chime in:

Did Awesome Inc consummate this with a consulting contract?
Did you incorporate?
Decide to carry insurance?
Do you submit invoices?

I'm trying to get some good ideas on my way to (hopefully) consulting for a former employer.

Mumintheburbs

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Re: How to set a consulting rate/fee?
« Reply #5 on: October 30, 2013, 02:50:31 AM »
A late chime in.
Congrats on your rate!
I would also suggest finding out consulting or contracting rates in your field. Always ask for the top rate you've heard of. You can negotiate down if you need/ want to, but no one is going to offer you more than your initial suggestion : )
In my field (HR/ Training consulting) an hourly trainers rate is $25-30, but a contractor or consultant earns close to $100 per hour.