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Determining Fee for Services

Determining Fee for Services

Determining Fee for Services

I’m in the process of writing a business plan to open my own Electrical Engineering Firm in the Northwest Region of the US.  The most challenging aspect of this is to determine the value of my services.  I’m interested to know is there a typical method of billing for engineering design services by a licensed engineer: Time & Materials, Fixed Fee, or a percentage rate based on the project cost?  How do you determine what this fee is once the method for charging is determined?

Also, since I would be the only employee of the company, I would be performing both the drafting and the engineering services for clientele.   For billing purposes, do clients expect a reduced hourly cost for time spent drafting vs. time spent performing the engineering services?

Any insight is greatly appreciated, thank you.


RE: Determining Fee for Services


You will be getting all kinds of advice on this one.  Personally I offer my clients the option of having me work for them on an hourly basis, day rate, lump sum, or a cost+.

I am solo also, I don't provide engineering services, more on the management side of the oil & gas, but I do get into conceptual & design aspects of projects.  What I do for a project that is a lump sum is this - break it down into work packages and then, to be competitive, I assign hours to each work package and while I do all of the work, if I charge it all out at the highest rate, I'll not be competitive.  So, I use hourly rates equivelent to what a client would exppect to pay for each "discilpline".

If they want to go hourly, then I charge my standard hourly rate or pro-rated up to a day rate if they want, regardless of the work done.

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website: www.oil-gas-consulting.com

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