Consulting Fees - How much to charge

E

Eloy Gomez

#1
Hi: I need help. What would be a fair price to charge a company for consulting and/or advicing them? I am being asked to help and assist this aerospace company in preparation for their upcoming third party audit.

Do I charge by the hour, by the day, by number of employees or by audit? and if so, what is a fair cost to charge? The work is in California.

It appears they already have a system in place I am just to analyze any gaps in their process.

I know I have to charge travel time, mileage and work related expenses, but I am a bit confuse on how to break down the work fees.

I would appreciate any advice given. Thanks.
 
Last edited by a moderator:
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Randy

Super Moderator
#3
Here's what I got last time I did private work in S. Cal helping implement a system (they got it 1st shot, no NC's)

$85 per hour & and additional $16.95 hr/per diem at a guaranteed 40 hrs per week minimum for 25 weeks.

Do the math, it comes to $101,950.00

The per diem was tax free

Now you gotta ask yourself, "What am I worth?"
 
Last edited:

Wes Bucey

Prophet of Profit
#4
Hi: I need help. What would be a fair price to charge a company for consulting and/or advicing them? I am being asked to help and assist this aerospace company in preparation for their upcoming third party audit.

Do I charge by the hour, by the day, by number of employees or by audit? and if so, what is a fair cost to charge? The work is in California.

It appears they already have a system in place I am just to analyze any gaps in their process.

I know I have to charge travel time, mileage and work related expenses, but I am a bit confuse on how to break down the work fees.

I would appreciate any advice given. Thanks.
You might benefit from reading through these two threads:
Consulting – Is it in YOUR Career Future?
Contracting/Temping - Viable Alternates in Tough Times

My point is:
Most consultants, not contractors, charge a flat fee for their work, not hourly. Consultants also don't "nickel and dime" for minor expenses, but do charge actual cost for air or train travel and overnight lodging, if required.

Before setting the fee, a consultant gets a good idea of the scope of the assignment. Sometimes, this means looking things over for free and then making a proposal based on an estimate of the time and effort to complete the assignment.

The tough part for newbies is to avoid getting mired in a no-win situation, which may only detract from the consultant's reputation. There is no impact on a contractor.

The reason clients turn to consultants is that they really don't have a handle on what needs to be done. They turn to contractors (hourly or daily pay) when they do know, but are unwilling (economics or mentality) to deploy or hire a full-time employee.

Your first task is to determine if the organization or the scope of the job requires consultant or contractor (defined in the first thread listed above.)

I'm elitist and don't do contracting, but refer those tasks to other folks who do. But, remember, I'm semi-retired and can afford to be elitist - it's a personal choice for any individual. The difference is that consultants often make much more money (when compared against hours worked) than contractors.

In real terms, a contractor is justified in charging two to three times the hourly rate of a comparable full-time employee because of the temporary nature of the work, lack of benefits, and time and effort spent marketing services. As an example, duplicating the work of a $50,000/year quality engineer for one full week could easily be priced at $3,000.
 
K

kgott

#5
In my last job a bloke rang up one day and said that he worked for a very large Australian company and that he was a contracts manager and wanted to award the company (I was working for) a contract to build 300 accommodation units, a big order, but that I had to forward a copy of our ISO 9001 certification first.

I told him that we were not certified and told the boss about it and gave him this callers name.

The bloke rang back the next day and said the same thing.

The boss got a little suspcious and phoned this bloke back.

Turned out this bloke was a consultant who used this kind of a trick to drum up busienss getting work implementing 9001.

It knocked my very naieve socks off to realise this kind of thing went on but I could'nt help but think 'what a novel idea?
 
M

MRWardell

#7
Hi: I need help. What would be a fair price to charge a company for consulting and/or advicing them? I am being asked to help and assist this aerospace company in preparation for their upcoming third party audit.

Do I charge by the hour, by the day, by number of employees or by audit? and if so, what is a fair cost to charge? The work is in California.

It appears they already have a system in place I am just to analyze any gaps in their process.

I know I have to charge travel time, mileage and work related expenses, but I am a bit confuse on how to break down the work fees.

I would appreciate any advice given. Thanks.
I charge $80 per hour, or $800 per day (not a 10 hour day!). I charge travel expenses without a mark up, but not a per diem (just actual expense). When traveling, I charge $40 per hour. If the client is interested in a longer term relationship and a set number of days per month, I will offer a reduced day rate. I also contract audit for a CB, and this is slightly more than I get from them as a lead auditor.
 

Wes Bucey

Prophet of Profit
#8
What does this mean? :confused:

Stijloor.
As I wrote in my thread (Wes Bucey offers service as "Strategy Advisor" - Seeking Case Studies for Book), I'm not interested in being a worker to someone else's direction, but
Here are some "should have" criteria for the target organizations:
  • I deal with chief executive and/or Board of Directors directly and interact with any or all staff as necessary
  • organization should be in self-perceived "crisis" due to pressure from time, regulators, or customers
  • I don't do work by myself, but will "mentor and advise" existing staff to do it so they can continue when I am gone (for example, I don't "perform" Gap Analysis by myself, but will help personnel learn how to do it themselves, keyed to the organization's circumstances, and will review and suggest modifications as required)
  • There is no minimum term for the assignment - some issues could be resolved in as little as one or two days, but still be important to the organization and pertinent for my book.
  • the maximum term might be as long as a year, but would involve my full time presence for only a fraction of the time to help personnel learn to do a task, returning from time to time for evaluation and suggestions for improvement
  • organization may be any size, from small business to transnational giant.
This pretty much marks me as "elitist" which is a derogatory term (self mocking in this case), usually defined like being or characteristic of a person who has an offensive air of superiority and tends to ignore or disdain anyone regarded as inferior <the complacent, elitist attitude of the members at that suburban country club>
With my knowledge and experience, my energy is better employed helping others learn how to do "stuff" than doing it for them. Think of the aphorism about "Give a starving man a fish and you feed him for one day; teach him to fish and you feed him for life." Many "elitists" assuage feelings of guilt by practicing noblesse oblige.

Thanks for the opportunity to expand on my original comment!:thanx:
 

John Broomfield

Staff member
Super Moderator
#9
Hi: I need help. What would be a fair price to charge a company for consulting and/or advicing them? I am being asked to help and assist this aerospace company in preparation for their upcoming third party audit.

Do I charge by the hour, by the day, by number of employees or by audit? and if so, what is a fair cost to charge? The work is in California.

It appears they already have a system in place I am just to analyze any gaps in their process.

I know I have to charge travel time, mileage and work related expenses, but I am a bit confuse on how to break down the work fees.

I would appreciate any advice given. Thanks.
Eloy,

Design and specify your services to fulfill the client's objectives showing who does what (including the client's responsibilities).

Obtain the client's approval of the spec.

You can then work out the value of the project to the client then halve it.

Charge this as the lump sum inclusive of expenses paid for in monthly installments over the length of the project.

Arrange for the client to keep 10 to 15% until they are completely satisfied.

This approach greatly streamlines billing and cash flow.

All the best,

John
 

Statistical Steven

Statistician
Staff member
Super Moderator
#10
Here's what I got last time I did private work in S. Cal helping implement a system (they got it 1st shot, no NC's)

$85 per hour & and additional $16.95 hr/per diem at a guaranteed 40 hrs per week minimum for 25 weeks.

Do the math, it comes to $101,950.00

The per diem was tax free

Now you gotta ask yourself, "What am I worth?"
Randy, if you are a 1099 contractor/consultant the only way the per diem is tax free is if you have real expenses to offset the income. Unless you know something I should :)
 
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