Consulting Fees

[Scott Sawyer]

As a long time consultant (since about 92) there are many ways to find out 
what to charge.

1.  Are you doing work so that you can build experience?
         I charge less for this because I will be in a completely new area 
of technology and it would take me longer to figure something out.

2.  Are you working on references and building up your consulting resume?
         This is a marketing expense so charge what you need to get the 
business assuming it will pay off on the long run.

3.  Are you so busy you can't see straight?
         Raise your prices until you get some breathing room.  Do this 
incrementally and not too quickly.  I have personally charged in excess of 
300 dollars an hour to get some breathing room and keep at a steady state 
of customers.  The other option is to hire some help but this has a 
massively different set of complications and turns you into a manager more 
than a consultant.

4.  Are you losing money and having your bills pile up?
         I would review what your delivering to the customer or raise your 
prices.  If you raise your prices and your customers go away then it's not 
worth the value you place on it.  In extreme cases I would look for a 
different line of work.

5.  Another view for knowing how much to charge is how much money are you 
going to save your customer by doing this work for them and what's a fair 
percentage of that savings to charge.  Say you save your customer 
$1,000,000 by doing some work for them.  Would it be fair to collect 
$100,000?

6.  Charity work - I give this away or charge enough to cover expenses.

My consulting resume is as follows:
MicroMagic - Owner (head consultant) from 92 to 99
VA Linux Systems - Professional Consulting Systems Engineer and then 
Project Manager from 2000 to 2001
Red Hat Inc - Professional Consulting Project / Engagement Manager. 2001 to 
present.

These are some thoughts I have on consulting in general and your mileage 
may vary.

To know more about consulting in general I recommend a book by Royce 
Callaway.  I forget the title but I have worked with Royce in the past and 
he knows consulting from A to Z.

-Scott



Scott Sawyer
Project Manager - Red Hat Inc.                          http://www.redhat.com
Member of Linux Users of Northern 
Arizona               http://luna.flagstaff.az.us
Personal 
Website                                        http://www.scottsawyer.org
"We are the Masters of ourselves and that is both good and bad."