How To Decide How Much To Charge For Your Services
By Carl Angotti, Sr. PATCA Certified Consultant
This article is based on my years of working on the New Consultants Roundtable, and what I have heard from others regarding how to set the price you can charge for your services. If you are a seasoned consultant, you might also consider if you should change what you charge based on market conditions.
- 1. Seek out Consulting Rate Surveys – PATCA, Women in Consulting, IEEE National Survey, Institute of Management Consultants, etc.)
- 2. Consider if you will do projects on a short, medium or long-term basis
- 3. Consider if you will work on a time and materials, or a fixed price basis, or a mixture of them both.
- 4. Consider if you will vary your rates depending on project size, or engagement length.
- 5. Decide to price below, at, or above the market (Perception Strategy) Higher prices = lower hours billed = more marketing effort, etc.
- 6. Use the “1000 invoiced hours rule” or “50% Fractional Hours Invoiced rule” (Includes Overhead, Marketing, Education)
- 7. Consider the value of your services compared to those of an employee in your skills area. (Alternative pricing)
- 8. Check out your price with “job shops” (Alternative Pricing) Assume a 40% discount for Marketing Agents
- 9. Ask other Consultants selling similar services what they charge.
- 10. Try an amount and see how potential clients receive them.
- 11. Read about pricing strategies on the Internet (See the list below)
Articles on Setting Consulting Rates
https://www.forbes.com/2006/11/06/bostonconsulting-marsh-mckinsey-ent-fin-cx_mc_1106pricing.html#4460823e6781 — Seems pretty good.
https://www.wikihow.com/Set-Consulting-Fees — OK, a little fluffy.
https://www.mbopartners.com/resources/article/how-much-should-i-charge — Has a free download .pdf, seems OK.
https://www.consultingsuccess.com/consulting-fees-calculator — A crude calculator for estimating
https://www.skmurphy.com/blog/2014/07/15/q-pricing-professional-services/ — Involved PATCA Member
https://patca.org/resources/patca-consulting-rate-survey-2016/ — Link to 2016 PATCA Consulting Rate Survey