Consulting Fees 2

[dar]

I am in the process of starting a Consulting business pertaining to Welding Engineering, Inspection and QA.
I have a BS degree and about 20 years of very good experience. However I'm not sure how to charge my customers. Any guidelines or fee ranges would be very helpful.

 

[xintal]

You can charge for your services on a Project Basis (i.e., fixed fee) or a time-plus-expenses Basis (i.e., per diem). When everything can be pretty much determined before hand and you know what the scope of the project will entail you should go with a fixed fee. However, if you think you might encounter the "iceberg" phenomenon (neither you nor the client knows what lies beneath the surface), then go with per diem.

As to what price you want to charge, I think that should be determined by how much you think you are worth, and what other firms in your area offer.

Hope this helped.

 

[RDK]

See

http://www.apegm.mb.ca/keydocs/cguide/index.html,

which is the guide for the engagement of a consulting engineer issued by the Manitoba association.

It gives some guidance on “normal” fee arrangements. The normal per hour charge out cost is between 2.0 and 2.5 times total payroll cost (salary plus employer paid costs) Fees can also be based on a percentage of the project or a combination arrangement.

This should be taken as guidance only. You should charge based on your perceived value to the client. If you are seen as a real expert i.e. an expert’s expert then charge more. If you are a face in the crowd then charge less.

If you are currently working for a consulting firm what rate are you charged out at now?

How many hours do you think that you will be able to charge for per year, how much money do you want to make. Take your expected salary, add in overhead costs and divide by the hours to see what hourly rate you have to earn. For a new business about 1,000 billable hours per year would be a good starting point.

What is the local going rate for this work in your area? If not sure, simply call the competition and ask them.

Whatever you charge give the client something more than you promise. I will typically set a rate based on the expectation that the client will need some small extras and then bask in the gratitude of the client when I give these services for “free”. Makes for a lot of repeat business.

One thing to watch out for is that the client often sees your asking rate as how much you value your services. You might get more work (and lots more money) by raising your rates.

Whatever your rates you will get most of your business from networking so get out to industry gatherings trade shows and start calling every name in your contact list
Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com