How to Set Consulting Fees
Research the competition., Examine different consulting fee structures.
Step-by-Step Guide
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Step 1: Research the competition.
Consultants are extremely wary about giving their rate information to people, because they don't want to be undercut by new consultants with lower prices.
However, there are other ways to do some research.
Ask friends and family who use consultants in your industry what they have paid for these services.
They may not be able to tell you the exact services, but they can give you an idea of what they look for and at what price.
Use a mentor or professional network to ask people in different but similar markets what they charge.
If someone is a consultant in a different state, they may be willing to share industry knowledge.
Keep in mind that people on the coasts or in cities can charge 25 percent more than in other areas.
Sign up for a consulting session on a business mentor site like PivotPlanet.
During these paid sessions, you can ask successful consultants in your industry the tough questions, such as rate setting and service package options. -
Step 2: Examine different consulting fee structures.
You can price by the hour, the day, by project or with a retainer.
Most beginning consultants use a daily rate or hourly rate structure.
If you don't have a package of services set up, this may be the best way to start until you get a better idea of what your clients will want.
IT consultants and social media consultants usually charge by the hour.
Other consultants use a project-based rate.
This requires you to know the details of the project very well and have a good understanding of your own efficiency.
Marketing, public relations, web design and graphic design often charge by the project.
If you have to supply something and it isn't heavily dependent on other parties, this can be your best option; however, there are some risks to doing this.
If the project gets delayed by the company, or they ask to completely redo it, you can find yourself with a low hourly rate or being unable to bill.
Some professionals, such as lawyers, CPA and financial consultants keep a retainer.
They project an hourly rate and how many hours the project will take and ask the client to pay in advance.
This is an excellent way to guard against potential non-payment; however, a retainer is hard to sell in some industries like writing, marketing and customer service.
Detailed Guide
Consultants are extremely wary about giving their rate information to people, because they don't want to be undercut by new consultants with lower prices.
However, there are other ways to do some research.
Ask friends and family who use consultants in your industry what they have paid for these services.
They may not be able to tell you the exact services, but they can give you an idea of what they look for and at what price.
Use a mentor or professional network to ask people in different but similar markets what they charge.
If someone is a consultant in a different state, they may be willing to share industry knowledge.
Keep in mind that people on the coasts or in cities can charge 25 percent more than in other areas.
Sign up for a consulting session on a business mentor site like PivotPlanet.
During these paid sessions, you can ask successful consultants in your industry the tough questions, such as rate setting and service package options.
You can price by the hour, the day, by project or with a retainer.
Most beginning consultants use a daily rate or hourly rate structure.
If you don't have a package of services set up, this may be the best way to start until you get a better idea of what your clients will want.
IT consultants and social media consultants usually charge by the hour.
Other consultants use a project-based rate.
This requires you to know the details of the project very well and have a good understanding of your own efficiency.
Marketing, public relations, web design and graphic design often charge by the project.
If you have to supply something and it isn't heavily dependent on other parties, this can be your best option; however, there are some risks to doing this.
If the project gets delayed by the company, or they ask to completely redo it, you can find yourself with a low hourly rate or being unable to bill.
Some professionals, such as lawyers, CPA and financial consultants keep a retainer.
They project an hourly rate and how many hours the project will take and ask the client to pay in advance.
This is an excellent way to guard against potential non-payment; however, a retainer is hard to sell in some industries like writing, marketing and customer service.
About the Author
Olivia Simmons
Specializes in breaking down complex creative arts topics into simple steps.
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