Consulting Fees

[Alan Pratt]

Sorry, Derek, but I need to comment on your math....

I've been there and, although you have the right idea, your missing a bunch
of the numbers. First off, I don't know any consultant worth their salt who
doesn't chunk at least $10K (more like 20K - 30K) into supplies, software,
hardware, test beds, etc. You must also consider that you aren't billable
100% of the time. Many times, you average somewhere around 50-60% billable
time (and don't forget, even when you are billable, you have a bunch of time
doing office chores, training, etc, that you don't get 'paid' for). Vacation
is on your own, as are sick days, holidays, etc.

I could run on about corporate and social security taxes (you are going to
establish a corporation to protect your assets, right?), administrative
costs, etc., but I hope you understand that getting $100/hr for sporadic
consulting isn't robbery, just smart business. If you are on a long term
job, then I think the rates can go down some (towards $50/hr).

- Alan


----- Original Message -----
From: "Derek A. Neighbors" <derek@gnue.org>
To: <plug-discuss@lists.plug.phoenix.az.us>
Sent: Tuesday, March 05, 2002 7:07 AM
Subject: Re: Consulting Fees


> Just in case no one has done the math
>
> 60,000 / 2080 (hours) = 28.85
>
> Now of course there are things like a normal employers benefits (and
> their tax contribution to factor in)  So say you figure in 10,000 for
> benefits and lump 10% for tax contribution and you are at 77,000 a year
> add another 10% for office supplies space etc... and you are at 84,000.
>
> The other way is when you hire someone you figure 30% of salary will be
> needed so if the salary is 60,000 72,000 would be the outcome so the
> above of 84,000 is pretty high.
>
> 84,000 / 2080 (hours) = 40.38
>
> So I am curious to those that give consultants a bad name buy wanting
> 100 plus an hour.  Do you really think that 60,000 is paltry salary, or
> do you expect companies to burden your time without work?
>
> Based on these numbers anything more than 80 an hour is HIGHWAY robbery.
>  As you would only be working half a year to earn 60,000 or if working a
> full year making 120,000 with full benefits etc included in the
> calculation.  I just ask that you re-evaluate bagging on 'the microsoft
> tax' if you are charging more than 80 an hour and ask are you charging
> 'the consultant tax'?
>
> ;)