How Do You Know What to Charge for Consulting?

Posted on July 13th, 2009, by Meggin McIntosh, Ph.D.

Question that was sent in:

Since you’ve done so much work consulting, I’m wondering if you can provide me some quick advice. A small college has asked me to consult on an evaluation of their promotion and tenure policies. I can imagine how this would work substantively, but not financially. Have you ever done something like this? If so, what type of a fee is appropriate? Thanks in advance for any advice you can provide!

Meggin:

How long do you think this process would take you?

Response:

I don’t know?! I imagine one full day on campus talking to people, one day of prep (reading their written materials and such), and one day for drafting a report and recommendations. Honestly, I’m just guessing.

Meggin:

So three days is a conservative estimate for something like this…and with most consulting…it grows beyond what you are imagining…you’ll connect with people and they will want to talk (as they should) and email you and call, etc. Plus, what if you get into a can of worms (which is very possible). How are going to be doing your report? If it’s just written, then that’s one thing, but if you need to discuss it with the Provost or whoever it is that is hiring you….

I’m not sure what your hourly or daily rate is for consulting, but let’s say it’s $175/hour, then I would charge for at least 24 hours (3 full days + the overflow into a fourth “day” – and it could easily go much past that) so that’s $4200 (plus travel, etc.). If you have a daily rate, say $1750/day, then it would be $7000 for ‘four days’. I wouldn’t say anything to them about days or hours…I would talk about the services you will be providing and give them a price, but not break it down. You are providing value to them that few people could. They aren’t hiring someone from the yellow pages at an hourly rate, so you need to price your services as a package – and then you work til the job is done. After you’ve done more things like this, you’ll have a better sense of how long it will take.

You could also offer options of what you will do at various price points.

Response: