December 16th, 2010 
admin 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
services?”
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
time.
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.
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