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Consulting Rates

For those who do consulting, what is your hourly rate?  Do you have different rates for different "types" of consulting (programming, networking, advice only, etc.)?  If so, what are those "types" and what do you charge for them?

I've been doing some consulting lately (in the Chicago area) and I'm trying to determine if I am charging enough.  I am a developer, but while consulting I haven't been doing much coding, so I'm wondering if I should be charging less because it is "less technical" so to speak.  So far it has been mostly virus/spyware/adware eradication, fixing their networking setups, fixing broken hardware, formatting / reinstalling the OS, etc.  Just "general" computer type stuff (although those things *are* quite technical to my clients, I guess).

What should I be charging per hour for this type of work?  If that changes to programming down the line, should I be charging a different rate for that?  If so, how much should I charge for programming (MFC/C++/etc)?  What about web programming (ASP/PHP/HTML/database/etc)?

Thanks!
P.S. I'll post what I am currently charging after I get a general feel for what everyone else's opinions are (I don't want to bias any responses).
Edward Livingston Send private email
Thursday, December 02, 2004
 
 
Oh, and feel free to post anonymously if need be :-)

Thanks for sharing!  It will help me tremendously.
Edward Livingston Send private email
Thursday, December 02, 2004
 
 
I don't know if her surveys are still up to date, but Janet Ruhl's books and website used to be *the* go-to place for this kind of information.

Website:
www.realrates.com

Books:
Computer Consultant's Guide, 2ed.
Answers for Computer Contractors

Thursday, December 02, 2004
 
 
i live in the northeast US and do various types of systems and software work (unix and network administration/configuration, database design/development, programming in C, Perl, PHP, Java, etc.)  I mainly concentrate on Unix-based projects and stay away from Windows.

I have different rates for different customers depending mainly on their business size, and if I really want to do the work or not. Sometimes I'm just not interested, and will quote a project high (at a flat fee) just to see what will happen. The most extreme example was 4 hours of work for $1200.

Typically I charge between $70 and $90 an hour.
(I do this part time, and have a full time software engineering job. If this were my full time job I'd need to charge more.. I have been told I should raise my rates, since I do so much more, so much faster than the guys charging $150 an hour.)
unknown
Thursday, December 02, 2004
 
 
I charge $50 to my initial clients to remove adware/spyware per PC and once they come back, I charge $25 to do it again. These are mostly friends/relatives and not business clients.

Since we all live in various parts of the world, most of us in the US, do any of you care to disclose your marketing approaches to getting clients, be it either for tech repairs/support or custome software work?

I think if I can do a couple of PCs a day to clean them of their junk, that could be a good supplemental income. But to reach this volume, some marketing needs to be done.

Or, a tech support can be even scaled up even higher to get a couple of contractors into my company and start to service corporate offices. A different market and approach from B2C.
Alex K Send private email
Friday, December 03, 2004
 
 
We charge 2 standard rates for all work:

1) The "normal" rate
2) The "discount" rate -- used for non-profit and educational (school districts, etc. )

Somehow, though, we've got rates all over the place. Over the years, our rates have changed and not all clients have the same rate. Sometimes we'll reduce the rate for larger/longer contracts.

For us, at least for the forseeable future, a single rate seems to be the impossible dream.
Sgt. Sausage
Friday, December 03, 2004
 
 
We do mostly database dev work, with a little of what you do thrown in.

We're located in rural Ohio, about 30 miles outside of Cincinnati. Our rates vary as explained in my previous post, but they range on the low end of $65 an hour and on the high end at $90 an hour with most work averaging out to 'bout $80 an hour.

I remember the days, not too long ago, when local competitors were getting $120 to $150 and hour in our area. I'll be honest. I was jealous of those rates (who wouldn't be ?) -- but we could never justify raising our rates that high. Now, a few years later, those guys are all out of business and we're still here making a comfortable living. Go figure.
Sgt. Sausage
Friday, December 03, 2004
 
 
I have never been comfortable with the idea of different rates for different types of work. I suspect it would lead to pressure to re-classify certain jobs, in order to adjust the bill, either by the client, the consultant, or both.

I accept that different consultants should be charged out at different rates, even when they come from the same firm and work at the same client.

For me, I do non-trivial web-application design and development within a cash-rich vertical market. My rate is $260 per hour at the moment, but bear in mind the USD:GBP exchange rate makes that look very high. A few years ago, when the rate was about 1.4/1.5, that would be a lot less.

I am at the top of my game right now, and nobody else could do what I'm doing, so as my client's IT manager once said, I get "the big bucks".

Although the rate is high, I do a lot more than design and development, my role generally becomes one of business development too.

In most cases, I am able to help my clients in such a way that my fees are paid for in savings, often many times over. This can be in efficiency savings, opening up new markets, gaining competitive advantage, etc. Even when this is not possible, they are always happy with my work, so everyone wins.
Nemesis [µISV] Send private email
Friday, December 03, 2004
 
 
Just to be a complete pain in the ass here:

Doesn't US antitrust law forbid discussion of pricing between competitors? Kind of a "price fixing" presumption?

Not that I care. If any "industry" needs a little discussion, ours is it. And I'm very glad that Sarge is making a decent living at a realistic price in my metro area. I'm sick of hearing about wage busters working for diddly squat.

PS: http://www.realrates.com contains hourly rate surveys searchable by technical discipline, as mentioned. But Janet's books are specific to the 1990s scene and apply mainly to on site hourly contracting.
Bored Bystander Send private email
Friday, December 03, 2004
 
 
Yes, and it seems that RealRates doesn't have much current info listed for our field (especially for the Chicago area), unless I'm missing it somewhere.  Thanks for the tip nonetheless.  Are her books still relevant for current times if they are specific to the 90s?  What subjects do her books cover, just pricing?  If that is the case they probably aren't worth reading now.  If they contain more general "consulting advise" info it might be a different case.

I agree, Bored.  That's why I started this discussion in the first place.  It seems *very* hard to get an idea of where our industry is heading.  If more people would share their rates (again, anonymously if need be) then we could get a better idea of what we could/should be charging.

Another interesting point is the concept of changing the rate based on location (i.e. your location vs their location).  Any comments on that?  Do any of you others charge more when there is travel involved?  How much?

This has been a *great* discussion so far, please share!
Edward Livingston Send private email
Friday, December 03, 2004
 
 
>> it seems that RealRates doesn't have much current info listed for our field

The best thing to do is to search by skill set and non geographic criteria and interpolate the rate by examining rates that appear in your region. (She really needs a search by radius around zip or postal code.) An example: a search on C++ gets 111 hits.

>> Are her books still relevant for current times if they are specific to the 90s?  What subjects do her books cover, just pricing?  If that is the case they probably aren't worth reading now.  If they contain more general "consulting advise" info it might be a different case.

Janet's career background was corporate IT and contract programming on-site, but information in her later books was gathered from interviews. The career and marketing strategies she promoted were associated with working through agencies, because that was where the demand for her books was. B2B marketing (straight through to the client) wasn't her speciality. For this, I highly recommend Bob Bly's books.

My opinion of working through agencies is that it's become the professional equivalent of temping. The kind of work that Janet documented has all but disappeared and has become a very hit or miss style of work.

>> If more people would share their rates (again, anonymously if need be) then we could get a better idea of what we could/should be charging.

>> Another interesting point is the concept of changing the rate based on location (i.e. your location vs their location).  Any comments on that? 

I have found that higher rates are possible when the contractor controls the relationship and comes to the client known as an "expert". This is also the instance in which you can are most likely to be able to negotiate the work to be offsite.

Most clients who use contractors in a "commodity" mode find them through agencies and they want temping style arrangements on-site, "supervised" like an employee. So, paradoxically, on-site contracting usually pays less.
Bored Bystander Send private email
Friday, December 03, 2004
 
 
Wow, Bored, interesting way to look at that!  It never occured to me that in certain circumstances on-site consultants would actually be paid *less*.  Something to consider when trying to "position" yourself as a consultant.  You need to come across and present yourself as very much an expert... at all times.

Great tip regarding RealRates.  I'll give it another shot.
Edward Livingston Send private email
Friday, December 03, 2004
 
 
> For this, I highly recommend Bob Bly's books.

Any certian one(s) in particular?  As you gather, I'm doing "independent" consultant (i.e. B2B) without any middleman agancies involved.
Edward Livingston Send private email
Friday, December 03, 2004
 
 
> In most cases, I am able to help my clients in such a way that my fees are paid for in savings, often many times over.


Excellent point, Nemesis!  Who wouldn't want to pay a consultant $500/hr for 100 hours of work if that will end up saving them $1,000,000 a year?  :-)  Another thing to keep in mind while positioning yourself as a consultant.
Edward Livingston Send private email
Friday, December 03, 2004
 
 
Edward, about the onsite and agency stuff: all I'm saying is that when you approach an agency as a contractor candidate, they look at one like a heads down non professional temp. Treatment of contractors used to be fairly shabby in the 90s and now there isn't even any money in the market.

Bob Bly is a "cult figure" in the freelance & entrepreneur world. I have: "Selling your Services", "Secrets of Successful Telephone Selling", "Guide to Freelance Writing Success". He has others, too. I think "Selling your services" is the mose applicable to computer work.

I have worked on a B2B consultancy most of this year. What I am finding is that networking with general business people is almost pointless. My current focus is approaching businesses directly.
Bored Bystander Send private email
Friday, December 03, 2004
 
 
Thanks for the info, Bored.  I'll also look into "Selling Your Services".


>My current focus is approaching businesses directly.

How do you go about doing this?
Edward Livingston Send private email
Friday, December 03, 2004
 
 
I use a sliding scale for my independent work.  If the project is short-term (estimated at less than 200 hours/2 months), I use my full rate.

If the project is longer, I give a discount (5-10%) and express this in my proposal.
"Look, you get this many hours for free if your project is this big!"
KC Send private email
Friday, December 03, 2004
 
 
"Doesn't US antitrust law forbid discussion of pricing between competitors? Kind of a "price fixing" presumption?"

Yes, there are laws against conspiring to "fix prices".  But it requires a lot more than just discussing with a couple competitors what rates they charge.  I'm guessing it requires , e.g., an agreement among themselves that they will all set and maintain the same rates so that clients would not be able to shop for best price, etc.
Herbert Sitz Send private email
Friday, December 03, 2004
 
 
I've seen discussion of pricing discouraged on some forums for this reason, though. Methinks there's a lot of anti-entrepreneur FUD floating around.
Bored Bystander Send private email
Friday, December 03, 2004
 
 
>>  Thanks for the info, Bored.  I'll also look into "Selling Your Services".

You're welcome. Initially I loaded up on "computer consulting" books. What I have found is that all of the computer consulting specific books and courses are too narrowly focused and most of them tend to emphasize "soft influence peddling" approaches like joining trade groups and waiting for osmosis and goodwill to occur.

>> >My current focus is approaching businesses directly.
>> How do you go about doing this?

I think I'm going to start a new thread on this subject.
Bored Bystander Send private email
Friday, December 03, 2004
 
 
Consulting:
DBA, in the Washington DC/Baltimore area is wide open.There just isnt enough skilled people in the field.  Everything here is Gov't Contracts/Consulting.  Just go to this page and check it out.
http://www.dbforums.com/f24
I stop consulting just 6 months ago but I did it for most of the 90's.  Depending on what is needed, SQL Server /Oracle DBA rates here are based on the lenght of the contract and what the specs are.  Every job is differenct.  I have a base now of $40 per hour that's the absolute minimum.  Again, please check out the dbforum job opportunities.  I'm not consulting anymore but these guy just wont leave me along.  Referral bonuses are cool to.
GDawkins Send private email
Friday, December 03, 2004
 
 
Thanks for the tip, GDawkins.


> Referral bonuses are cool to

Could you elaborate on this?  How does the referral process work (who referrs who) and who awards the bonus to the consultant (the referrer or the referree)?
Edward Livingston Send private email
Friday, December 03, 2004
 
 
$150/hr for Software Architect work.  Doesn't include expenses for airfare, hotel, car rental, meals, which are billed back to the client.

I don't code professionally any longer, but I design applications and supervise the implementation, down to the level of code review and implementation support.  These applications are high volume transaction systems pushing large amounts of revenue.

This is in a secondary market in the US. (Large city of a few million people MSA but not of primary interest in any industry.  I.e., not Chicago, NYC, DC, SF, Seattle, LA.  Think Minneapolis, Indianapolis, St. Louis, etc.)

Sorry for the vagueness. :-)
Anonymoose
Friday, December 03, 2004
 
 
Thanks for the numbers, Anonymoose... much appreciated.


> Sorry for the vagueness. :-)

Not a problem!
Edward Livingston Send private email
Sunday, December 05, 2004
 
 
"Doesn't US antitrust law forbid discussion of pricing between competitors? Kind of a "price fixing" presumption?"


Only if we controlled 90% of the market and secretly agreed to set the rates.

Sunday, December 05, 2004
 
 
When I had a guy in to fix my Fridge, he was quite happy to charge me his full hourly rate ($80) for a job that took less than 5 minutes to "fix".  At least I can now clean the drain pipe myself after watching him do it once...

My wife got fed up waiting for me and paid a guy $75 to put a bit of silcone on a crack in our eaves-trough, and then clean the debris out.  Since its a short run I'm sure it took hime less than 30 minutes.  The kicker is that the temp has been so low the silicone didn't seal properly so the leak isn't fixed.  I doubt we could get a refund...

So I wouldn't be quick to start creating a variety of rates.
Decide waht your rate is, set you minimum.  And if you want to givce breaks do it on a case by case bases.
Honu
Monday, December 06, 2004
 
 
Good point, Honu.

Okay, I was hoping to get a better response to this thread, but what was I expecting :-)  Thanks to those who responded, and if anyone else is willing please share!  I'll be monitoring this thread for a while.

Anyhow, true to my word, here's what I charge in the Chicago area: US $90-$120/hr depending on the work that needs to be done.
Edward Livingston Send private email
Monday, December 06, 2004
 
 
"
Anyhow, true to my word, here's what I charge in the Chicago area: US $90-$120/hr depending on the work that needs to be done.
"

And do you have any takers? Unless you have domain knowledge in a specific industry that rate is BS for the skills you originally posted.
Tom Vu
Saturday, December 11, 2004
 
 
>And do you have any takers?

Absolutely.


>Unless you have domain knowledge in a
>specific industry that rate is BS for
>the skills you originally posted.

My skills go beyond what I originally posted.  I have a masters degree in Computer Network Systems so I'm often doing other "more advanced" stuff as well.

Why do you feel that rate is BS?  Do you consult, and if so, what is your rate?
Edward Livingston Send private email
Saturday, December 11, 2004
 
 

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