Whether you are in the research phase or firmly established in your independent career, you have likely asked the question: "How should I charge for my consulting services?" As an employee, you understood your market value, but how do you charge for your time as a business of one?
As an independent consultant, you maintain sole responsibility for how much you earn. Your consulting rate can be as high as what a client is willing to pay -- but finding out how much that should be is the tough part. Are you charging too much or too little? You do not want to undersell your services but you also want to be market competitive. It is important to understand the scope of the project and the needs, wants and urgency of the potential client to set your consulting fees.
Figuring out an hourly billing rate is the first step in developing a solid business plan. Whatever your strategy, you should review your rates often (at least annually). You'll need to account for changes in the economy, your overhead, and market conditions, along with inflation or deflation. In addition as your own experience level increases, you will want to evaluate your value in the market.
When you're an independent consultant, having a bill rate strategy is critical for running a successful business, but coming up with the "right" rate can be a serious source of stress and confusion.
This comprehensive guide helps you evaluate not only how to determine your bill rate, but what type of bill rate is right for you. You can also use our bill rate calculator to get started.
Contracts should clearly articulate services to be performed, timelines for completion, and payment terms and conditions. Here are 6 best practices for drafting the right contract for your independent consulting services.
Using the market-based bill rate approach, you'll learn how to benchmark your internal cost-based rate against external conditions to remain competitive.