This article will help you find the correct consulting rate that works best for you. Use this information as a starting point to determine appropriate rates based on your consulting type, experience level, and industry. Just like everything else in business, setting your rates should be flexible. You are free to increase your rate if you are gaining new clients than you can handle or lower your rates if you’re not getting any interest or prospects feel it’s way above their budget.
Then, you charge a monthly fee to cover ongoing consulting work. As an entrepreneur and consultant, you’ll be paying for your own benefits, buying your own computer and workspace, what is a good consulting rate and no one will be paying you to go on vacation. You’ll also spend at least half your time (in the beginning) tracking down new clients rather than working billable hours.
Track your rates in your CRM.
Think of yourself not as a person comparing what you do to a salaried role, but rather a business serving a specific audience. At this stage, you should have calculated—or understand how to calculate—your bill rate cost, or the point at which your bill rate can begin to turn a profit. If you’re feeling frustrated by all the options, we’ll also walk you through common fee structures and how to get started with calculating your own rates. Overall, it’s best to opt for an alternative payment method.
If you expect to need to work 25 hours per month for a client at $50 per hour, your monthly retainer would be $1250. Finding your monthly retainer is very similar to finding your per project rate, just at a larger scale. Add on to your rate until it more closely reflects other consultants at your expertise level.
How to Calculate Your Consulting Fees
Find out if you’re charging too much or too little by benchmarking your own rates with this free report. But how can you convince clients to pay such a high number? Consultants who help clients with product management can charge between $175 to $250 per hour. Accounting consultants, who should also be CPAs, can charge between $150 and $450 an hour. If you consult clients for diversity training, you can charge between $150 to $250 per hour.
- InvoiceOwl is an invoicing solution tailored to serve all contractors—whether you’re in landscaping, construction, consulting, photography, auto repair, or the medical field.
- According to the Payoneer survey, which covered 150 countries and over 7,000 freelancers around the world, freelancers on average make $21/hour.
- The conversation about rates happens with every client, sometimes more than once.
- So let’s say you want to make $100,000 per year, calculate your running costs and add it to your salary expectations.
Based on data, we can determine the compensation range of consultants from some of the top consulting firms in the U.S. Now, you have your starting point for a consulting rate per hour, $200/hr. Now, it’s more complicated than the simple example above.
How to estimate your monthly retainer for consulting services
Don’t forget to charge for all the parts of what you do. Your client has the option of choosing providers, some of whom may be far away. You, too, may be pitching for business that is not at your doorstep.
Maybe you create websites or develop marketing plans — no matter what you do, you’re bound to get better at it the more you do it. You could raise your hourly fee to compensate, but clients may have a hard time swallowing the higher hourly rate. Of course, this assumes you use an hourly rate for your consulting services.
Don’t Talk Numbers Until You Understand the Scope
If you don’t have money to pay a lawyer’s retainer or hourly fees when you start a case, look for a lawyer who will use a contingency fee arrangement. In a contingency fee arrangement, the lawyer takes on the risk that your case might be unsuccessful. If you don’t get any money, your lawyer won’t get attorney’s fees, but you still might have to pay for expenses related to your case.
A higher hourly charge covers any gaps in a genuine consulting strategy. You’ll also need to include any other expenses your employer has previously paid, such as healthcare, vacation days, sick time, and a 401(k) plan. Finally, another thing to keep in mind is the market rate for similar services in your area. You don’t want to charge too much and price yourself out of the market, but you also don’t want to charge too little and leave money on the table.
Restaurant Consulting Fees
The rate charged for consulting or coaching can vary widely, making it tough to figure out where you stand. In an ideal world, all your consulting clients would pay the same rate and follow the same payment schedule. If you’re going to charge by the project, make sure to clearly outline in your contract what that price includes. If you need to set limits to revisions or phone time, do so. Charging per project eliminates the need to watch the clock while you’re working and can give you some extra wiggle room if you finish a project early.
Multiply that by your hourly rate and then add a 10-20% markup for unexpected contingencies, and voila—you have a rough estimate for a per-project consultant rate. When making your calculations, feel free to play with the numbers to satisfy the lifestyle you want. As a consultant, you’re not getting paid for vacation or maternity leave, so you’ll need to factor this time into your rates. Note that your pricing structure should be under consistent review, especially as you grow your skills and attempt to expand your consultancy.
How Much Should I Charge as a Consultant? (Guide)
The amount you’re charging is impacted by so many factors—experience level, tenure, location—that it can be hard to lock down a figure that you feel confident pitching to clients. You calculate your hourly rate and charge the client based on how long you work on the project. The second approach to charge clients is by a fixed fee, which is common in the form of a package deal, such as completing a specific service or supplying them with a product. If you’re ready to start a full-time business in consulting but want to keep your existing cost of living, figure out how much it costs to run your business. To determine that, the popular advice is to charge roughly three times your current hourly rate. The first portion of this guide covered the cost-based method of bill rate calculation, which offers all consultants a thorough breakdown of a consulting business into its cost components.