{"id":6699,"date":"2021-01-27T09:12:22","date_gmt":"2021-01-27T14:12:22","guid":{"rendered":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/?p=6699"},"modified":"2021-01-27T09:12:22","modified_gmt":"2021-01-27T14:12:22","slug":"what-should-i-charge-as-an-independent-consultant","status":"publish","type":"post","link":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/what-should-i-charge-as-an-independent-consultant\/","title":{"rendered":"What Should I Charge As An Independent Consultant?"},"content":{"rendered":"<p>One question that\u00e2\u20ac\u2122s always out there for consultants and others who work for themselves, or even own small businesses, is how much should they charge for services. Truthfully, even seasoned consultants struggle with this question.<\/p>\n<table align=\"right\" cellspacing=\"5\" cellpadding=\"5\">\n<tr>\n<td><img decoding=\"async\" src=\"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-content\/uploads\/2021\/01\/shoe-shine-kit-419x480.jpg\" alt=\"self employment\" width=\"240\" class=\"alignright size-large wp-image-6702\" srcset=\"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-content\/uploads\/2021\/01\/shoe-shine-kit-419x480.jpg 419w, https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-content\/uploads\/2021\/01\/shoe-shine-kit-218x250.jpg 218w, https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-content\/uploads\/2021\/01\/shoe-shine-kit.jpg 429w\" sizes=\"(max-width: 419px) 100vw, 419px\" \/><br \/><center><b><\/b><\/center><\/td>\n<\/tr>\n<\/table>\n<p> Price point is a problem because all of us want to get work and close contracts, and we\u00e2\u20ac\u2122re perpetually battling someone else who wants to undercut our rates.<br \/>\n<!--more--><br \/>\nI once interviewed a friend of mine who\u00e2\u20ac\u2122s an entrepreneur in SEO services. Before that he had started a company that made windows, and was doing really well because they built quality windows. Then one of the largest window manufacturers in the area decided to get tough to drive him out of the market. They not only drastically reduced their rates, but offered to pay for free advertising for any of his former clients who\u00e2\u20ac\u2122d left. Within months my friend had to close down that business because he couldn\u00e2\u20ac\u2122t compete with that.<\/p>\n<p>So, figuring out what to charge is a valid concern, but it\u00e2\u20ac\u2122s not always the case when there are others who offer what we consider as the same services for more money. Check out this video where the presenter is talking about why he paid <strong>$310<\/strong> for a haircut:<br \/>\n<br \/> <br \/>\n<iframe loading=\"lazy\" width=\"480\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/cjCdf8n7hzo\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><br \/>\n<\/p>\n<p>That's another way of looking at pricing services based on knowledge, talent, experience and, best of all, word of mouth advertising. That's pretty hard to beat, which means if you can make yourself the person or business that people want to work with, you can pretty much name your price.<\/p>\n<p>I acknowledge that might not be enough information for you to figure out what to charge based on what you do, so here\u00e2\u20ac\u2122s a few things you need to think about, some beyond thinking about what you do:<\/p>\n<p><strong>1. How much money do you need to live on?<\/strong><\/p>\n<p>This is the major question you have to answer and it\u00e2\u20ac\u2122s not as cut and dry as it seems. If you only want to make what you were making when you were working for someone else you might as well go get another job.<\/p>\n<p>In essence, you have to make enough to pay your bills, be able to put some aside for those periods when you\u00e2\u20ac\u2122re waiting for your next contract, marketing expenses, equipment and supply expenses, etc. You need to have enough money to pay for health insurance, food, at least a little bit of entertainment... things you don't put a lot of thought into until something comes up like problems with your car or some of your appliances.<\/p>\n<p><strong>2. How many clients\/hours do you need to make the yearly amount you\u00e2\u20ac\u2122ve calculated for yourself?<\/strong><\/p>\n<p>I told you it wasn\u00e2\u20ac\u2122t easy. Say you want to make $50,000 a year, and you want to make $50 an hour at a minimum. This means you\u00e2\u20ac\u2122d have to work at least 1,000 hours a year, or the equivalent of 25-26 work weeks a year; that's not a bad life if you budget well. If your projects usually take 2 hours to complete, it means you need at least 500 clients a year; if it takes 4 hours you need at least 250. If you're a consultant and can get a 6-month contract with just one client, you're solid.<\/p>\n<p>But... could you get away with charging $100 an hour? That would bring you down to 500 hours for 2 hours, which is 250 clients, or 125 clients for 4 hours. If as a consultant you can get that same 6 month gig with one client you've doubled your money for the year and have more money to work with.<\/p>\n<p>Can you reach that? Do you need clients who need recurring services, which makes it easier because you need fewer numbers? Can you actually get a lot of clients in a year, even if the number is just 125? What figure does your industry seem to need? If you believe you're really good, charge more; if not, learn more to you can afford to charge more.<\/p>\n<p><strong>3. The client\u00e2\u20ac\u2122s ability to pay should be the least of your concerns.<\/strong><\/p>\n<p>This is a hard one to overcome for most new consultants because they want to get established.<\/p>\n<p>Truth be told, you can\u00e2\u20ac\u2122t expect to get everyone as a client, so you might as well shoot for those you believe can pay you. Being so exorbitant that you can\u00e2\u20ac\u2122t get any clients makes no sense, but settling for an amount that you really can\u00e2\u20ac\u2122t live on or sustain over the long haul isn\u00e2\u20ac\u2122t worth it either. There\u00e2\u20ac\u2122s nothing wrong with discounting here and there for whatever reason but don\u00e2\u20ac\u2122t go into negotiations expecting to drastically discount your services.<\/p>\n<p>I know what you're thinking because I've been there as a consumer. We get offered things at least weekly that will \"only\" cost \"this much\", and it feels like it's beyond our budget. If we're like that, won't our potential clients be the same? Possibly, but business is a different animal than general consumption. As long as what you offer is needed, you'll find clients who'll be willing to pay what you ask for as long as you can find a way to prove to them that you're worth it.<\/p>\n<p><strong>4. Can you determine your value?<\/strong><\/p>\n<p>What makes one consultant worth $30 an hour and another worth $500 an hour? Two things: what you bring to the client and your own feeling of self worth. Let\u00e2\u20ac\u2122s look at these.<\/p>\n<p>On the first, you have to ask yourself what your typical clients are going to walk away with after you\u00e2\u20ac\u2122ve helped them with whatever their needs are. Are you going to help them make a lot of money? Are you fixing something they need to make their life or work easier, or it\u00e2\u20ac\u2122s a necessary thing? Are you offering them something they might not think they need so it ends up being more about you than them?<\/p>\n<p>On the second, how well can you evaluate your own worth? Do you see yourself at an expert or an authority? Do you have a track record, whether it was while you were employed or as an independent, for solid performance? Are there a lot of people who do what you do, and if so are they better than you? Did any of their other consultant's help a former client <a href=\"https:\/\/www.ttmitchellconsulting.com\/730_Million.html\" target=\"_blank\" rel=\"noopener\">increase their revenue $730 million in one year<\/a> (that's my line lol)?<\/p>\n<p>These are stepping stones to define for yourself as an independent consultant; set a rate and start working from there. You can always look online at others in your industry who do what you do to see if you can find what they\u00e2\u20ac\u2122re charging and modify yourself towards that. Just remember that, if you\u00e2\u20ac\u2122re independent, there\u00e2\u20ac\u2122s so many more things you\u00e2\u20ac\u2122re responsible for that many of those who are employed don\u00e2\u20ac\u2122t have to worry about.<br \/>\n&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>One question that\u00e2\u20ac\u2122s always out there for consultants and others who work for themselves, or even own small businesses, is how much should they charge for services. Truthfully, even seasoned consultants struggle with this question. Price point is a problem because all of us want to get work and close contracts, and we\u00e2\u20ac\u2122re perpetually battling [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[19,1634,1633],"class_list":["post-6699","post","type-post","status-publish","format-standard","hentry","category-general-business","tag-consulting","tag-how-to-charge-clients","tag-self-employement"],"_links":{"self":[{"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/posts\/6699","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/comments?post=6699"}],"version-history":[{"count":0,"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/posts\/6699\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/media?parent=6699"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/categories?post=6699"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ttmitchellconsulting.com\/Mitchblog\/wp-json\/wp\/v2\/tags?post=6699"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}