How Do You Set Consulting Fees?

One of the most frequent questions I receive
from those who are trying to start or grow
their own consulting business is: “How and
what do you charge clients for your consulting

The ways of billing clients are numerous.
There are hourly rates, by-the-job fixed rates,
contingency or performance arrangements,
flat fee plus expenses, daily fee plus expenses,
and many other methods of charging for your
consulting services. Which one is best?

Let us consider some ways of billing for your

1. Hourly or Daily Rate

Many consultants charge by the hour or day.
To establish an hourly or daily rate, they try
to calculate the number of billable hours in a
year. Many hours will be spent marketing and in
administrative and other functions, so this
time is not chargeable to the client. As well,
vacation time, holidays, sick days, and so on,
can not be directly billed to the client.

Consultants, like other businesses, must charge
enough to cover their overhead expenses and also
earn a profit. If a consultant wants to earn
twenty-five dollars per hour of working time,
he (or she) might have to charge one hundred
dollars per hour to the client. This assumes
one half billable hours and fifty percent
overhead and profit.

Your hourly or daily rate may be limited by
what your competition charges, especially if
you have not positioned yourself as different
from them.

2. Fixed or Flat Rate

Some consultants charge by the job or a flat rate.
For example, a tax consultant might charge three
hundred dollars to prepare a tax return for
you and your spouse, including an unaudited
income statement for your business from information
supplied by you. If the consultant takes only one
hour to do this, he grosses three hundred dollars
per hour. If, though, the tax consultant
miscalculates the time required, he could take
twenty hours to complete the job and make only
fifteen dollars per hour.

Of course, consultants can also make a profit on
the labour of their employees or subcontractors.

Many consultants claim to make more on a flat rate
than on a hourly basis. Advantages include being
able to give a quote to the client up front and
less disputes on price (as the total bill was
agreed upon in advance).

To protect yourself on flat rate assignments,
always limit the scope of your engagement to
something that you can calculate easily.

For example, if you are asked to give a quote
for setting up a website for a business, you
might break this project into smaller assignments.

First, you could give a quote for preliminary
research and recommendations. Estimate the time
required to meet with the client, learn about
his business and goals, develop strategies and a
budget, and prepare recommendations on how to
proceed. Then, give the client a quote (perhaps
in the form of a one page letter agreement or
proposal). Upon acceptance of the offer by the
client in writing, you may proceed with this
phase of the project.

Some consultants collect one-half of their fee
up front and half upon assignment completion for
each phase of the consulting project.

If the client doesn`t like your recommendations,
at least you get paid for the work you did.
Perhaps you can charge him to prepare
alternative suggestions.

If your website project was not broken into
smaller steps or assignments, you could find
that you spent way more time on the project
than anticipated.

Also, you might not find out until you present
your bill for the whole project that your client
won`t pay, either because he is not satisfied
with the results or because he is unable or
unwilling to pay.

Breaking down a project into smaller assignments
helps you estimate more accurately and limits
your financial exposure.

3. Contingency or Performance Arrangements

Sometimes clients will ask you to become their
partner. If you do, you are no longer an
objective consultant.

What if your client asks you to do management
consulting for twenty-five percent of the net
profits? Will there even be any profit by the
time he writes off his car, home office,
entertainment, travel, wages to self and
family members, and other expenses?

On the other hand, if you are a marketing
consultant that is absolutely certain
that you can increase a client`s sales, you
may feel confident charging a fee based on the
increased sales volume of the client. Are you
sure your client will co-operate with you in
the attaining of this goal?

Some consultants charge a flat rate plus a
percentage of ownership or profits for their

Fees based on contingency or performance
arrangements are risky. Most consultants are
better off charging a fair price for their
services and leaving the risk of the client`s
business to the client.

4. Value Based Fees

Sometimes consultants can justify fees based on
their value to the client. For example, if you
save a client one million dollars in taxes, your
fee may be higher than normal to reflect the
value of the services rendered.

You might pay an accountant or lawyer a fee of
fifteen hundred dollars based on time for certain
tax related services. What would you be willing
to pay to legally save an extra million dollars
in taxes? Ten thousand dollars, one hundred
thousand dollars, or more?

Can you apply this information to your own
consulting practice? Is there some particularly
valuable service that you can render that would
justify premium rates?

However and whatever you charge, be sure that
your fee is a good value for your client
and also compensates you fairly.

For further Information and resources about
consulting, visit:

The Different Types Of Internet Consulting Services And Their Advantages

Internet consulting services can help businesses in many ways. Firms that offer these services employ professionals and can do anything from website design to increasing conversion rates. Other consulting services include strengthening a company’s online presence and marketing a website or products online. There are many benefits of hiring a consulting firm and taking advantage of all the consulting services they offer.

Increasing Conversion Rates

A company has a website for a variety of reasons. Most companies like to sell their products and services online so they can increase their customer base and their profits. It can be very difficult to prompt a potential customer to purchase a product on a website. Internet consulting firms offer services such as increasing conversion rates.

They have the tools and experience necessary to convert a person who is simply browsing a site into a customer. The more people who purchase products or services from a company’s website, the higher the company’s profits will be. E-commerce websites that don’t help a company succeed are only hindering it and are not worth the money, time, and effort. By using the many services provided by internet consulting firms, e-commerce websites become a worthy investment.

Strengthening a Company’s Online Presence

Businesses won’t get as much traffic to their website or customers at their stores if they have a weak online presence. It can be difficult to figure out how to create a strong online presence. Consulting firms offer services that include strengthening a company’s online presence and spreading the word about the company’s website and products online.

The consulting firm will utilize social media websites to market a business and its products, and they can create a professional business blog to help businesses connect with potential customers. By creating a blog and using social media, businesses will get the exposure they need, and traffic to their website will increase as a result.

Saving Money

Businesses that want to be successful online will have to invest in a plethora of tools and books to give them the ability and knowledge they need to help their business. Purchasing software, books, and other items can cost a lot of money, and even with all of these tools, success is not guaranteed. By using consulting services, people can spend a lot less money, and they’ll be able to hire professionals that will do a much better job.

Website Design

Another service offered by internet consulting firms is website design. Websites are a crucial part of a company’s online presence. A website that is badly designed will deter users from browsing the site and purchasing items or services. Websites need to look professional, and they need to be easy to navigate. By using an internet consultant firm’s web design services, businesses can attract more customers with an easy-to-use, professional website that is appealing.

Being More Productive

Companies that attempt to manage their website and online marketing by themselves will waste valuable time that should be spent on other important aspects of their business. By using the services offered by internet consulting firms, businesses can concentrate on other important things like the quality of their products or customer service.

Internet consulting services have many advantages and can help businesses succeed online. There are many different services available to help businesses in every way.

Starting a Startup Business? Choose the Right Business Consulting Firm for Success

Being your own boss is the dream of many and lately, the instinct seems to be taking the world by storm. People are now more inclined to start their own firm, it seems to lure many people and running an own business shows the larger than life picture, however, the reality is a bit different. As an entrepreneur willing to start a new business you need to understand the market, do the need analysis and many researches before executing your plan. You might be budding with business startup ideas but mere planning will not help you succeed, rather you need a right plan of action to succeed.

The upsurge of small business consulting firms has proven to be a panacea for startups. They offer the consultation and startup mentoring services which work as a guide for entrepreneurs to successfully implement and execute their business plan. Not only it supports the Business Startup Ideas but provides feedback to improve the business plan which helps in removing bottlenecks usually faced by startups.

Why do you need startup mentoring?

There is no denial to the fact that many startups fail in their nascent stage, and they may have a number of reasons for the same, the likes include entrepreneurs being naiveté and lack of supportive startup ecosystem, lack of funds, poor market conditions and much more. But, the most important factor that most of the startups miss is a lack of guidance, inspiration, and feedback from small business consulting firms and no startup mentoring. It might sound absurd to a few strong-headed entrepreneurs to take the support of a mentor to execute their business plan but these firms are a must to make your business successful.

Startup Mentoring – your ultimate supporter and motivator

In the lead to succeed, most of the entrepreneurs break rules or make mistakes which they are not even aware of, these mistakes, however, can adversely affect their business. Also, many times as an aspiring business builder you find yourself stuck in a situation where you don’t know how to proceed. Startup Business Consulting firms and mentors work as a savvy guide who constantly provides you feedback.

Initially, you may be having a lack of confidence but with the mentorship of a good startup mentor, you can move ahead with confidence and without hesitation.

How to find the right startup consulting firm or a startup mentor for your company:

You are entrusting your faith and vision on a person who will be your mentor or support or guide, hence, it is very important that you have a strong relationship with them and at the same time, it’s important that your startup mentor’s or consulting firm’s vision should coincide with yours. A good startup has the following qualities:

  • An expert-level experience
  • Already a successful entrepreneur
  • Are patient and action oriented
  • A harsh critic yet supportive

Before moving ahead and getting associated with any firm or person, as an entrepreneur you should check for the aforementioned qualities.

What does a good startup mentor do?

A good startup consulting firm or a mentor will:

  • Listen to your concept and give honest feedback
  • Will give you time and talk through your areas of difficulties. Since they carry with them good amount of experience, they also share their experience which helps you understand your problems and come up with right solution
  • They are action oriented and hence, always suggest practical ways on how to start a business by making optimum use of available resources


You must accept the fact that it takes a village to become a successful entrepreneur, of course, your vision and idea is important but what’s paramount is its right and timely execution which only comes with the right support system. The upsurge of companies like Virgin startup is a move to support and guide the newbies in the business world to succeed and survive.

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