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Will You Add? - Setting Fees For Your Consulting Business
I’ve always considered Intel to be one of the world’s best-managed technology brands. Last year, Interbrand ranked Intel as the fifth most valuable brand in the world. And it consistently stays in the top ten because management works hard to make sure the brand remains relevant in the fast-moving semiconductor market.Of late, Intel has garnered a lot of press regarding the sweeping changes man
The computer age has changed the face of job searching tremendously. Massive job databases as well as individual company websites make it easy for jobseekers to find and contact those companies looking for new employees. Not only is locating and job matching made simpler, but submitting resumes is now an easier process as well. Cutting and pasting resumes into company forms as well as emails have negat
There are several factors that determine the correct hourly rate for flat consulting fee. The most important is quite simply, how much do you need? There is a formula for setting this rate and you'll be surprised how closely the result parallels what others charge.
X = hourly consulting rate
To find X
X=y+H+M+P+F
How do we find X?
First we need to define a few constants. We'll start with our base rate which is Y.
A= is the salary you desire B= the number of hours you can realistically bill in one year.
To define the base rate (Y) A/B So for example if you desire a salary of $80,000 per year and you can bill 1500 hours as an IT consultant you are left e rate of $53 per hour. This is not your base rate, you still have one more calculation.
Next we have to add in the self employment tax. This is the tax for Social Security and Medicare for a self employed or small business owner. This rate is 15.3% Add this to the $53 (53 * .153)
Now we have a base hourly rate (Y) of $61.
At this point many independent consultants set their rate and hang up the shingle. This is why many of them are out of business within a year or two. You must consider all of the other things you'll need that your employer paid on your behalf, and money to grow your business.
H = Health insurance costs
The first and most costly is health insurance. If you have a family of four you can count on at least $500 per month. Health insurance for self employed can be very expensive. Check with several brokers do get the best price and then divide the total yearly cost by the number of hours you will bill. Taking a rate of $500 per month, or $6,000 per year, at 1500 hours your rate will need to increase by $4 per hour to cover health insurance.
From sea to shining sea, America is a place where transportation has become one of the most essential parts of functioning for businesses and individuals. If you are looking into freight shipping, you want to make sure that you know exactly what you are looking for. Finding the best quality in freight shipping carriers in America will give you the best opportunities for transportation in the land of
X = hourly consulting rate
To find X
X=y+H+M+P+F
How do we find X?
First we need to define a few constants. We'll start with our base rate which is Y.
A= is the salary you desire B= the number of hours you can realistically bill in one year.
To define the base rate (Y) A/B So for example if you desire a salary of $80,000 per year and you can bill 1500 hours as an IT consultant you are left e rate of $53 per hour. This is not your base rate, you still have one more calculation.
Next we have to add in the self employment tax. This is the tax for Social Security and Medicare for a self employed or small business owner. This rate is 15.3% Add this to the $53 (53 * .153)
Now we have a base hourly rate (Y) of $61.
At this point many independent consultants set their rate and hang up the shingle. This is why many of them are out of business within a year or two. You must consider all of the other things you'll need that your employer paid on your behalf, and money to grow your business.
H = Health insurance costs
The first and most costly is health insurance. If you have a family of four you can count on at least $500 per month. Health insurance for self employed can be very expensive. Check with several brokers do get the best price and then divide the total yearly cost by the number of hours you will bill. Taking a rate of $500 per month, or $6,000 per year, at 1500 hours your rate will need to increase by $4 per hour to cover health insurance
I’ve said it in a hundred training workshops. Listening is important. I don’t know why I say it – everyone already knows it. Whether talking to leaders, coaches, trainers, meeting facilitators, plant operators or anyone else, I’m sure the reaction is the same.“Duh, Kevin, that’s profound.”I believe we all know how to be great listeners when we really want to be. Times like: on a secon
Next we have to add in the self employment tax. This is the tax for Social Security and Medicare for a self employed or small business owner. This rate is 15.3% Add this to the $53 (53 * .153)
Now we have a base hourly rate (Y) of $61.
At this point many independent consultants set their rate and hang up the shingle. This is why many of them are out of business within a year or two. You must consider all of the other things you'll need that your employer paid on your behalf, and money to grow your business.
H = Health insurance costs
The first and most costly is health insurance. If you have a family of four you can count on at least $500 per month. Health insurance for self employed can be very expensive. Check with several brokers do get the best price and then divide the total yearly cost by the number of hours you will bill. Taking a rate of $500 per month, or $6,000 per year, at 1500 hours your rate will need to increase by $4 per hour to cover health insurance
It’s that time of year again – recruiting and starting the graduates. This whole area is one which needs to be considered and reviewed as it is a major commitment for the organisation. Getting it right can help the future of the business – the alternative is just an expensive waste. In this article I will cover some key points to help you increase your success rate in both getting and keeping the ri
At this point many independent consultants set their rate and hang up the shingle. This is why many of them are out of business within a year or two. You must consider all of the other things you'll need that your employer paid on your behalf, and money to grow your business.
H = Health insurance costs
The first and most costly is health insurance. If you have a family of four you can count on at least $500 per month. Health insurance for self employed can be very expensive. Check with several brokers do get the best price and then divide the total yearly cost by the number of hours you will bill. Taking a rate of $500 per month, or $6,000 per year, at 1500 hours your rate will need to increase by $4 per hour to cover health insurance
Imagine you’ve worked hard to market your services; you’ve attracted a prospective client, set up a “sales conversation” and gone through the whole sales process. Great job, but sometimes, no matter how hard we try, prospects don’t always sign up on the spot.Sometimes, a prospect needs some time to make the decision on whether or when they’d like to start working with you. What I’v
M= Marketing and sales costs
For an independent consultant your business is only as strong as your next engagement. We recommend a minimum of 5% of your first year estimated sales to keep the pump primed. $2.6 would be our hourly rate at this salary.
P= Professional fees.
This is the cost for your accountant, attorney fees, answering service, and any other monthly or quarterly fees you'll need to pay throughout the course of the year. We'll use a figure of $2400 for this example, so P= $1.6 ($2400/1500 hours)
F=Fudge factor.
The fudge factor is the small things that are going to come up from time to time. Stamps to mail out invoices, a one time cost for your accounting software (QuickBooks, or Microsoft money) and the dozens of other items that pop up from time to time. As your business grows the F factor will have other expenses like rent, and overhead for non-billing employees, extracted and divided by the number of employees and the number of hours worked. For now just use your best guess. If you need starting point $200 per month is not unreasonable. F=$1.6
Now we can figure out X
X=$61+$4+2.6+$1.6+$1.6
Or an hourly consulting rate of $71
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