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.
