consulting gig

[pedanticromantic]

Hi
I got a consulting gig (yay!) but I'm not sure how to approach my fee. This is a *major* corporation--is $250/hour reasonable?

[polly_mer]

What is standard for your field?

What does this company bill its own people at?

My current company does bill my time at slightly more than $250/hour for external consultation.  That covers my pay, benefits, and employer contribution to payroll taxes.

At a different employer, my time was billed out at four times my standard hourly rate (e.g., $40/hour internally was $160/hour externally), again to capture not just my pay etc., but also use of the company computers etc. since that wasn't charged separately.

[ciao_yall]

Go to a website like glassdoor.com, salary.com, etc and see what the salary would be for someone hired to do that job full time.

Let's say it's $75,000 per year. Since a FT job is about 2,000 hours per year, that works out to $37.50 per hour.

Using Polly's math, that would work out to $150 per hour. If they ask how you came to that fee, you can do the above math for them and show that it's reasonable.

[pedanticromantic]

Thanks--I have no idea what people in my area would charge, nor do I have anyone I know who has done consulting to ask!
I would say it's a major multinational company that makes over $500m/year

[polly_mer]

The question isn't how much money the company has; the question is what is common practice for services like those you will render.

The Glassdoor suggestion is good to get a baseline.  If you're in the US, the Department of Labor has data on salary ranges that might help.

Otherwise, talk to a trusted colleague either at the company or who can put you in touch with those who do similar consulting work and ask directly whether $250/h is a reasonable sum.

Or you can just try floating the $250/h in a verbal discussion and see where it goes.

[pedanticromantic]

Thanks! I said $250/hour USD and they didn't seem to balk.  I'm not in the US, but I also have some unique skills so I think they'd be hard pressed to find many people in the world who do what I do.  It also gave me an idea for my next book that will help to situate me as the person who other companies could approach for that kind of work, so even if it doesn't work out this time, that's a bonus!

[polly_mer]

Excellent!

Next time, you should ask for $275/h and see what happens.  After all, you'll have more experience and are thus worth more.

[Kron3007]

The rule of thumb that I was told was to charge about 3X your standard hourly pay rate.  So, if you normally make 100K per year, which works out to about $50/hour, then $150/hour would be typical.  Obviously this is just a rule of thumb, but it seemed like a reasonable starting point. 

I recently started consulting and am being paid far less than any of this in cash, but it also comes with stock options which are hard to assess but another good option.  The advise of my banker/finance friend was to go for as much in options as possible since this is a consulting gig that is above and beyond my salary.  The reason being that I dont "need" the money, and while options carry risk they also have a much bigger potential upside.  I mention this just to say that cash is not the only possible compensation, so other things could come up that are worth considering.