Discussion on:

Going solo? Get top dollar for your services

$90 an hour average? Please get serious or put your money where your mouth is. I'll give you 10% of my sallary if you find me a job for that "average" (and I am, mind you, worth much more than average). So, find me a job or stop selling me ridiculous sums that no one is willing to offer in the real world.

rates. I'm sure the author was looking at salary surveys from big 5 contract houses, not the solo practioner. If you have the "hot" skill set, you might be able to squeak the $90 for consulting, but generally I think you are looking at less. A good source for "real rates" is a web site I found which has rates listed by the solo consultants by title worldwide. Overall average was $66K/yr (~$33/hr) in Feb.):
Janet Ruhl's Computer Consultant Resource page(I have no connection with this site).www.realrates.com
It uses data collected from a survey consultants are asked to fill out.

Since I checked in Feb, the site has gotten much more information. Upon going to their contract page, the average for all titles was $82/hr for contract work.

rates.

I am sure the author of this article is
correct as well. However, if you want to get
a sense of what freelancers/consultants can
actually make, there are a number of websites
that can allow you to do that.
Just go to http://www.google.com, and type
in "Freelance", without the quotes. You will
find out soon enough how accurate the
original authors story actually is.

The issue isn't rates, it's results. Clients don't mind spending $90 dollars an hour if you can produce serious results in a "fixed" period. No one will pay top dollar to watch a consultant wander around... they are paying for stream-lined, no-nonsense efficiency. (Not 9:00 to 5:00 clock watching)The real issue is "what are they willing to spend on this project." If you can produce the desired result for the price they are willing to pay, the "hourly" rate is inconsequential.

You need to be realistic about your ability to produce, know your customers needs then the rate will set itself.

to many times clients haggle over the hourly rate and seem to forget the hours involved. Contracting costs are time versus rate. And, as well as price, the client needs confidence that the work will be completed and to a correct standard. All these factors are "costed" in.

It is not at all unusual for a "freelancer"
or "consultant" to start at 75/hr, and rates
do go up from there depending on expertise.
As noted in the article, when a freelancer
or consultant takes the time and energy to
research a new client (see career discussion
forums) and understand what the need really
is, it is not at all uncommon to ask for 2.5
times a full-time employees rate for the same
position. In the US, we have to pay for our
jobs...the IRS still has the power to require
it of us.
The differences comes in terms of how much
the consultant/freelancer needs to be a
consultant/freelancer just to maintain a
lifestyle similar to what they were
experiencing during their time as a full-time
employee of some corporation/organization.
In fact, the freelancer/consultant has
more bills to handle due to the US
requirements of Income Tax. A full-time
employee doesn't need to have as much because
the employer handles deductions, benefits, etc.
As a freelancer/consultant, you must pay
for those benefits out of your own pocket
(retirement, State and Federal taxes and/or
fees).
Thus, 2.5 times your full-time employment
rate is actually quite conservative depending
on your freelance rate. Thehigher your rate
as a freelancer/consultant the more you have
to pay (see above) in order to maintain that
rate.

You are what you think that you are worth. You just have to put your worth in something other than a per hour rate. I have been a consultant since 1986. The first thing that I realized is that if you know your trade and can show your confidence, themoney that a client (customer) will pay is secondary to their faith in you. This has worked for me on every consult. I have faith in myself and know what I am talking about and I exude that. The last thing that a company or person wants is to get a low quote then have to do it over again with another person. They would rather pay someone who knows what they are doing in the first place. The last thing anyone wants is "Pie on their face."
Rather than an hourly rate figure what you are worth on a daily or weekly bases and give them a figure. It is much more professional. Of course, if you aren't confident of what you are doing...go back to the books and learn. Craig

is that they don't take the area in which you work into consideration. In some areas, the market just will not bear what it will in others. If you use figures from a survey or web site that don't apply to your area, then you may lose some businessby basing quotes on those surveys. For example, in Richmond, VA where I do consulting, you just can't get the same rates as you can 100 miles north in the Washington, D.C. area. However, you can also buy a house here for literally HALF what you would pay for the same house in the D.C. metro area. To really get a feel for your LOCAL market worth, you need to network with other consultants or simply ask clients what they are paying your competitors for similar services. You'll be amazed at how many clients will actually tell you this, if you just ask in a polite manner, e.g., "I'm new to the area and want to be competitive. Would you mind sharing the scale that you normally pay your other vendors for this type of work?" Most clients are sophisticated enough these days to know not to low-ball you, or you'll just bail on them in the middle of a project to get a fair rate elsewhere. If you've done a little local homework before asking this, you'll also know if the client is in the ballpark with their answer.

The author is referring to the going rates that customers are paying for consultants. When I was consulting, my firm would charge $150/hr for my time. However, I was lucky to see 25 percent of that.

And he's not talking about finding you a job making that much, he's talking about you employing yourself for that much.

In a consulting business, the difference between the hourly wage or salary of the employee and the hourly rate being charged is the multiplier. It gives an idea of how much overhead, profit etc. is needed beyond the base salary. The author suggestscharging 2.5 times more than you are making as an employee - this is maybe slightly below average for a typical consulting firm. Not a bad ballpark for an initial cut at what a suitable rate should be.

As you say, you're lucky to see 25 cents onthe dollar - a multiplier of 4. Pretty high, and a little disconcerting to the employee who sees the other $0.75 going somewhwere else.

I shoot for 5.0 to 6.0 as a multiplier when I quote work, and I get it. The main thing, as others have said, is to understand your client and what they want to do, show your confidence in your ability to help them solve the problem, then do such an awesome job for them that they want you back for more - and tell their friends how good you are.

These consultant rates are interesting but I'm not sure at all that you can actually charge that much all the time. There's something called competition and depending where you are working, you might be forced to charge an average base salary + expenses. This means a much lower figure...

As you said, you might keep your price higher and hunt for clients willing to pay but in the meantime you have no income and the word might spread that you are expensive. This is not a good thing for your business. There's also another aspect in this ball game: educating the client. Too often clients can't make the difference between an idiot charging 20$/hr and you charging 65$/hr. How can you explain you will work more efficiently and you will spend less time than this idiot? Cheap rates are music to client's ears. Go explain them that.

Yes, competition is out there. But, it's important to remember that clients are not ignorant to going market rates. If a competitor comes in with an extremely low rate, clients are leary. Why so low, they ask? Bidding lower than your competitorsisn't always the smartest thing to do, and in the long run, may hurt you professionally and financially. The biggest hurdle is getting out of our own way - we don't fully appreciate what we are worth and so, often settle for less. Rather than lowering your rates to generate business, what extra value can you offer your clients that your competitors can't? What makes you better? What makes you stand out among the rest? Why should the client hire you instead of Joe down the street?

I formed a consulting company 8 years ago and bill clients $200 an hour. My daily is $1700 for existing clients and $2000 for new clients, with a weekly rate of $8500.

Depending on the project I bid the job and may average less to as low as $120if it's a long range job, but never lower and more are likely to average $150+. So maybe you are not working with the right companies or not offering the right services!

I charge $125/hr and have no problem retaining clients. There is a ton of work out there and not all clients are able to pay that rate. You should not want all the work ? just the top 10 percent of the work in your area.

What services do you offer and where are you located?

So what do people do for $90 per hour?

How much down-time is there between gigs?


If I am a $17 per hour tech support geek, can I put my MCSE to work for me and be a "consultant?" Or do I need get some magical powers too?

I commend you on this. I am tired of hearing all these "mambe pambe" -- said consultants. If you are a consultant you should bill as such. Too many "consultants" are billing as if they are still employees -- trying not to offend the client. The client could give a rip about you. They just want the work done. If you are the person to do it -- "Bully for you". My word to all consultants is Stop short changing yourself. The money is there -- just put your hand out and take it. Stop feeling like you are asking for too much. Will it seem like you billed too much when you are on the beach? Of course not. Get your self image up and your income with it. Make the client feel like they are the crooks -- because they are. And you consultants that are excited about this -- stop bringing things to the clients place of business to help the project unless they pay for it. I bring nothing with me but me --- PERIOD !! They want something else --- they pay for it --- or provide it to me. I assure you they will never pay more than what it takes to replace you, and if they do -- that is their problem -- not yours!! Your only there as long as you get paid.

Again I congratulate this consultant for doing the right thing and setting the right example.

The rest of you stop crying about your rate and do something about it.

If you don't please go get a job (J)ackass (O)f (B)oss. You are driving down the rates of the real consultants and forcing us to argue about what we bring to bear becausethe "quasi consultants" (staff augmentation people)are like street ******.

Although I agree with you that we need to respect ourselves and charge what we're worth (and I do), I think your attitude toward clients is one that can't help but coming out in an engagement. What an arrogant way to approach an issue. We should be looking to help a client, not just get money out of them.

It's clients with attitudes like this that give us bad names, even if our checks are bigger.

I wrote that message for the people who are constantly crying about their rate, what the client is doing to them, etc.... We as professional business people must never display an attitude that openly says "give me your money". However, I will say this -- Is there any company out there that does not say "Give me your money"? If we are in business for ourselves then we must stop thinking like employees and start saying (without overtly saying) "Give me your money". If we cannot say that, and billproperly for our services then we should go out and get a job. Our security must be in the service we provide. We must provide it at the highest level. We must bill at that level, and have no questions in our mind that question the billing. I will say it again -- If the client wants it -- they pay for it. When my mortgage company, bank, credit card company, phone company, utility service, drycleaners, etc... stops billing me for every little thing, -- then, and only then, will I stop billing for every little thing. By the way -- it is those very companies we work for that are billing for every little thing -- why shouldn't I -- I am in business for myself just like they are.

I rest my case.

Hi Im a French Canadian consultant to be...

The services that I like to offer are software/hardware configuration & repair, Web site management, and Internet Graphic design...

Can u or anyone else tell me what is worth in Canada or to be more precise in Hull Quebec.

BTW: anyone know a french equivalent for this site.

Tks in advance for ure help.

I commend you for your straight-forward, and accurate, testimony.

I have been "consulting" through brokers for 17 years, 27 years in applications development. I work in a depressed market (Houston) with obsolete skills (mainframe).

I have found full utilization of my skills only a couple times, out of dozens, and only after years of work and intense jockeying for the client. Most clients have never seen what a "high powered" consultant can do. Employees with 10 years experience have been blindsided to the unique installation and software of their employer. Eventually they become managers and employers themselves, still with no knowledge of possibilities beyond the walls of their company. When I explain to them that I can single-handedly deliver a system in 1 year that a Big 5 group has estimated at $100 million, 5 years, and 60 FTEs; I get shown the door with advice to commit myself to the care of a shrink.
Most of the "consultants" I work with are really not consultants, they are just good (maybe) programmers, staff filler. Indeed, in some circles, contractors have a bad name, due to non-delivery and inexperience. The brokers are responsible for this. Most have never been programmers and have no idea how I make my living, they don't understand anything on my resume, and they don't seem to work very hard for the easy living I provide them.

Let's say the industry average is $90 (did you bother to notice it was also included that a rate could be as low as $65...?) and then let's say you are worth more than the average...

Okay, so why don't you get it? If your attitude on the post is anything like your attitude in dealing w/ clients then perhaps you can see why you don't get paid as much, or more.

Nothing personal here, pal so don't fire flames off at me out of spite... The questions I've asked are actually semi-serious because I've been there and I'm there now.

Besides, the article did NOT "quantify" what they determined to be the job listings they mentioned... If you are not well-rounded in your IT knowledge then you aren't worth as much as someone w/ at least 3-5 years of real experience, hands-on and all that...

Best of luck!

-_- D.

Certify, Certify, Certify. Having a well-known vendor stating that they think that you are qualified to manage their products is a big plus.
Document, Document, Document. I know that us techies hate that word but our clients love it! What's moreis that you are being paid $95/hr to type.
Lastly, ask for a written refrence when you complete the project. My last one was a simple four sentence letter that stated that I completed the project under time and budget and that I knew mt stuff. This is ammunition to those asking you to lower your rates!

I own my own consulting and network installation company. We charge 110.00/hr. I have one partner, we always charge 110.00/hr or discounted 100hours blocks @ 90.00/hr. We have been discussing raising our rates to 125.00/hr. Welcome... to the world of the real (Matrix )

Your rate really depends on your skillset and where and for whom you work. My firm's rates vary from $150 to $600 per hour. I know many independents that command $125 to $150 per hour and up because of their specialized skills. If you are having trouble making what you want, try specializing in an area where there are not many consultants available. Can I get the 10% if I find you a job?

I see that I srirred up quite a discussion with my post, and I have read some very interesting and usefull replies, including this one. The diference of opinions, views and attitudes expressed here proves that this is not merely an issue of rates and averages. Having in mind that the article was all about bare-bone rates (and that I might have taken the wrong pill after all ), my 10% offer still stands.

$90/hour is not ridiculous for NJ/East Coast market. Here in St. Louis I charge $80-$95/hour and keep super busy. I have friends that charge $100+/hour and have no trouble finding work. You may have to work at a lower rate to build up experience,but don't be afraid to raise it every 6 or 12 months.

Do you live in a buttcrack town the size of a small populated school bus? Becaues that would be one of the only ways you wouldn't be making $90 an hour. If you use your brain and have good business sense, you too can make $90/hr.

I find your response to this humorous...Find me a job LOL. Sounds like you don't have the right attitude to find one yourself. I currently consult for Medical product startups in Washington and charge $100/hr for PC work and $175.00 for networkingdesign and implementation. I have been in the field for 5 years and have minimal certifications. These number sound more than accurate to me, but please. Stay in your full time position. People with attitudes like you will soon ruin the consulting world.

Thanks!

Are we talking about a job or being frelance, working for a consulting firm or offering consulting to end customers?
Seems to me the author was referring to frelance consultants "going solo"... and Vladan Marinkovic about a job "So, find me a job or...".

Here is some considerations:

When you say 90$ an hour, what do you mean by hour? hours you breath? hours you spend talking the customer into accepting your bid, hours you spend posting and replying to message boards here, hours spent studying that new technology that just came out, or just the hours you spend strictly working on their project?
I would gladly settle for "hey I'll just charge you 40$/hour, by the way, I've spent a total of 1 hour emailing you and came here twice for 1 hour plus a 30 minutes commute each way, that will be 200 dollars" (some lawyers do that! :-)).
Guess what though, you did spend that time into that project (unless you're good enought for customers to hunt you down begging you to take this already well defined project) and time like that went to projects you never got. If on the other end you work trough a broker 10% or so of your bid goes to them one way or the other.

Continues in part 2 (sorry, I got in the mood :-))

....Continued

Oh, it's tax time, need to meet with the over-paid-but-worth-it accountant, there goes another hour, need to go order those brochures, check the proof then pick them up, there's another hour, gotta shop for insurance and oops, that customer isn't paying, that otherone is braking the contract , contract what contract? hmm time to see another overpaid consultant, the lawyer...... list goes on.
Account for all of those 90$/hour is worth if you were paid 25$ on a full time job (maybe)!

If you ask me I like to quote the project, after is well defined, as a "cost to do what you need = x". It takes skills and an organized mind to be able to do that right, gotta keep so many things in considerations that if I listed them I'd be writing a whole new article. But clients like it better: after all most likely they have a budget for the whole project rather than an "hourly" budget, and if you're good at what you do you'll get it done faster than they think in "hours" of work.

The way I am most times pride takes over and I end up spending much more time on it than expected because "it's my baby and it's gotta be perfect, they don't really need this feature but it would be cool and they sure wouldn't mind".
That's whatI gotta work on and I'll be fine

The article is serious and very accurate. In my current company, even our staff (entry) level people are charged out at $149/hr. So, I think that they are being serious and accurate. I know a few people who have gone out on their own and are making similar rates per hour.

I bill out at $110 or 125 depending on the work. Pay attention.

If you want to know how to make the most money possible as a consultant, you need to look beyond the technical aspects of your offering, and help the client understand the business value that you are providing.

I make $120 per hour for my consulting gigs.

The best resource I know of for helping you understand the key concepts is a fantastic book by Alan Weiss - Million Dollar Consulting. http://www.amazon.com/exec/obidos/ASIN/0070696284/ref=sim_books/002-5444587-0478453

He also has another book that I haven't read called Getting Started in Consulting.

Check it out. It's well worth your time to read it.

Also, technical skills alone are not sufficient to earn even average rates. Excellent communication skills, business acumen,and the ability to look at a project from the clients' point of view are critical.

Hope this helps!

In the UK, most IT service organisations operate on a minimum 3 x slary multiplier. This is to cover their costs such as:

training
slack time
organisational overheads
investment in professional methods, techniques & standards,
leverage of knowledge / experience within the professional services company
premises
pre sales costs
etc.

The question is not is this what people are paid, but Do I have confidence that I will get value for this money?

I don't think that the $90/hr rate is outragious. I do consulting work on the side and charge between $65-$85/hr depending on the job. I have several associates that won't even look at outside work for less that $120-200/hr. Now there is a great deal of difference between what a salaried employee and a contractor makes, its about job security and perks at that point. (Note all rates are given in Canadian dollars)

Friends of ours, self-educated in the ways of chip design layout (basically a technician level job supporting design engineers), command a range of $80-$110 per hour for their contracts. They ask for it, and get it, every time. They make a killing, are in heavy demand, and have as much or as little work as they want. Don't know what IT consultants would bring, but $90 per hour doesn't seem unreasonable given what these prior English and Philosophy majors are getting.

Rates in CA for computer consultants are $75 - $250/hour (maybe more).
I am a I.S. Manager at a non-profit organization in San Diego, CA. The rates for computer consultants quoted in the article by Pam Gersh are "right on the money" herein CA. (Note that these are CONSULTANT rates - - not "employee" rates). I do most of the administration of the LAN (2 file servers, ~35 workstations, ~16 printers, DSL Internet connection using a router, etc). But, when things get more difficult than I feel qualified to take care of - - I call a consultant. Now, I don't get paid anywhere near the $75 - $125/hour that we usually pay our consultants (I am an "employee" not a "consultant". There is a BIG difference.).

(end of Part 1)
(more later . . . )

(Part 2)
(continued . . . )

Here are some of the issues that I am faced with when hiring a consultant - - (1) Is the consultant knowledgeable? Can he/she "do the job" or will it have to be re-done? I used to hire a company that sent out "rookies". What a nightmare. I feel that $75 - $125/hour means that the consultant should know what he/she is doing. Does he/she need to get on the cell phone to the boss back at the office for help in solving the problem? Not too impressive. And, if the consultant does not know how to fix the problem, does he/she admit it? That is much more preferable to spending a lot of time (and, therefore "my money") spinning the wheels. (2) Can the consultant supply prompt and reliable service? If we have an EMERGENCY situation, can I get service within 24 hours? or, better yet, within 2 hours? If the consultant says he/she will be at our company at 3 PM - - are they? Are they always late (by more than 1 hour)? Do they not show up at all? Do they call me to let me know? (3) Is the consultant easy to work with? Does he/she "have an attitude"? If I have a choice (and, currently, I do), I would pick the consultant who is professional, knowledgeable, and courteous. Oh, and a consultant that has good personal hygiene is preferable (when did he/she last comb his hair, take a shower, shave, brush his teeth, etc?). Cleanliness counts. Suit optional (indeed, detrimental, if crawling under desks is part of the task). (4) Is the consultant willing to educate me? If this problem happens again, can I fix it? If so, will the consultant share his/her knowledge and teach me a little now, to save me money later? Or is he/she a "knowledge hog"; not willing to share knowledge because it may lose him/her a call-back next time?

(more to come in Part 3 . . .)

(Part 3)
(continued . . . )

I realize that $75 - $125 sounds outrageous. But, this is "condensed" knowledge. The consultant comes out and fixes the problem and leaves (at these prices, "No loitering, please"). I know that, back at the office,a good consultant does research, reads, studies, etc. And a good consultant has other clients with similar problems. So the consultant (for a majority of the tasks) has previous, hands-on experience. A good consultant comes out and gets the work done in a minimum of time. I am paying to get the job done quickly and correctly.

About 2 months ago I did some "comparison shopping". I only looked into one company, so I haven't done any extensive looking recently. The company that I looked into charges at least $160/hour, wants pre-payment for 40 hours of time (40 x $160 = $6,400) and will only do work in 4 hour blocks. And, here is the clincher, I very much doubt that their employees are half as knowledgeable as the consultant that I currently use. And, I am not willing to pay the price to find out.

A GOOD consultant is hard to find, makes my job much easier, and is worth at least $100/hour.

So, the question is . . . Are you a good consultant - - or a wannabe?

The author was speaking of consulting fees, not salary. My company charges $100/hr. Few customers complain. Most are very appreciative if a timely solution is given.

No kidding, I may have an assignment for you if you qualify.

Our company pays anywhere from $75-$150 an hour for consultants. We are a small company, and don't overspend in any area of our company. We only hire consultants who provide high productivity, and those that don't aren't used again. Getting high productivity out of a consultant @ $150/hour is cheaper than low productivity @ $70/hour. A highly productive consultant can often do in 1 hour what a lower productive consultant takes 4-8 hours to do.

I find $90 per hour is quite a conserative figure for people who are competent in their field of expertise. I work for a company that has paid $150 for a second opinion to mine and recieved less compentent information than I had already provided for them.

I was a Third level Support person for a worldwide printing manufacturer. We had distributors all over the place. These people were mainly SOHO types, Most were great salesmen but when system issues arose they needed outside help. The first thing I noticted was that almost ALL of them were getting ripped off by local consultants. Our distributors were using all flavors of Windows, with a DOS based Foxpro database, and a Windows FTP program to transmit orders. It got so bad that I started havingthe distributors either send me their systems or have the onsite Tech deal with me only and they were not allowed to touch the system unless I was on the phone with them. mention DOS to these guys and they were totally helpless. I was based in the Northeast, so here I am driving to Baltimore and NY to fix MSCE certified consultants mistakes and Fiasco's. I'm not kidding. I started outsourceing myself to these Distributors on weekends and stuff charging up to $200.00 an hour. They had no problems paying me. Word of mouth spread and pretty soon I was picking up tons of business. Novell/NT/Small Business server, DSL Installs. I finally gave it up cause I couldn't keep up and just stuck with a few clients. If your good, fair,honest and straight forward you'll not have any problems. Everything that I fixed for these people was done using basic troubleshooting.

I work for a company that regularly pays $100+ per hour for good NT/Exchange consultants (mostly for special projects). It's a shame you don't think you're worth that kind of compensation.

You obviously do not know what is going on in the market, that is what the company is gonna pay, easily more, of course you may not be making all of that, unless you are on your own. Did you miss the whole point of the article.