How To Decide How Much To Charge For Your Services
By Carl Angotti, Sr. PATCA Certified Consultant
4/10/18
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.
http://consultantjournal.com/blog/setting-consulting-fee-rates
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