Do you have a policy for onsite IT consulting fees, or do you negotiate each situation on a case-by-case basis?
As I've mentioned before, I don't go onsite very often; I do almost all my IT consulting work from my home office via the Internet. Some of my clients I have never even meet in person — one of whom is right across Puget Sound in Seattle!
When I do go onsite, it really messes with my routine because I'm used to working for two or three clients in a day. But when I work at a client's office, I'm theirs for days at a time. So does it still make sense to bill by the hour?
I don't have a firm policy for this situation. Sometimes I continue to bill at my hourly rate; there are times when I work out a daily rate; and, occasionally, I go for a flat fee for the visit. (The flat fee is really just a restatement of a daily rate — presuming you know how many days you're going to be there.)
The difference between daily and hourly pay, though, can be significant. Before you decide which way you want to go, there are a number of questions you should ask yourself to help set expectations for you and the client.
- How many hours per day will you work once you get onsite?
- If you charge by the hour, your incentive is to work longer days, but is that what you want? What does your client want?
- Does your client want to know upfront how much the trip is going to cost them? If so, a daily rate can be useful, and it lets you know how much you're going to take home.
- If you decide on a daily fee, how do you determine what to charge? Do you multiply your hourly rate by how many hours you think you'll be working? Do you give a discount for volume?
- #1: Exclusivity The customer has your dedicated attention. This is worth something extra because you will be more productive for them by staying focused on their tasks all day long. Plus, you'll be able to interact personally with all their people, which always has unforeseen benefits.
- #2: Other clients' needs become secondary You'll have to ignore your other clients while you're onsite. If you do get to work for your other clients, it will probably be early in the morning or late in the evening. You're taking the risk of not being available for them if an emergency or a new opportunity should arise, which could lead to lost business.
- #3: Expenses associated with being away from home You're away from your home and family. Not only do you miss them, but there are probably some extra expenses attached to that. For instance, I'm going to have to board my dogs when I'm out of town later this month because my wife can't handle both of them. I'm not going to bill my client for that as a line item.
- #4: The inconvenience factor You'll sleep in a hotel, eat restaurant food, and drink whatever excuse for coffee they have at their office. You'll have to figure out some way to exercise; you won't be able to listen to your own music without headphones; and you'll probably have to sit in a cubicle. You won't have all your own equipment; for instance, I usually bring my computer but not my 24" second monitor, my external keyboard, or my server.
- #5: Security The financial certainty provided to your client by a daily rate should be worth something. It's like insurance — people are willing to pay more overall to avoid sudden surprises.
Do you have a policy for onsite fees, or do you negotiate each situation on a case-by-case basis?