| To someone who isn't, the life of a
consultant can seem like quite a racket. Many
choke on what they believe to be an outrageously
high hourly rate. I never get a complaint about
my fee from the for-profit sector (not that I get
much work from them), but rather mostly from the
non-profit sector. Here's why I charge what I
charge.
1. I can get away with it.
Welcome to the world of supply and demand.
I have more offers for work than I can do.
2. I'm worth it.
See above. You're hiring me for what I
know, who I know, what I can do, and what I
can make (or not make) happen.
3. You need me.
One hires a consultant because either
they:
a. need expertise that their
organization doesn't have; or,
b. have the expertise, but don't have
the time to do it.
4. I'm available when you need me.
When contracting for the private sector,
paid work usually begins after the first
call. For the non-profit sector, it usually
means after several calls to precisely
determine what I'm going to do and how much
it is going to cost. Then it usually takes a
few months to a year or more to go raise the
money for the project.
5. I may get that much an hour, but I don't
bill every hour.
Part of the reason for the hourly rate
being higher than an hourly wage or salary is
to cover the hours I'm not billing for. It's
not like I'm sitting around waiting for the
telephone to ring. I'm:
• writing proposals, estimates or
grant language;
• schmoozing potential clients;
• negotiating contracts;
• keeping current in my fields of
expertise;
• keeping books and billing; and,
• keeping an office in some
useable form.
6. The hourly rate is more than I take
home.
The hourly rate also covers:
• basic office overhead (rent,
phone, utilities, equipment, etc.);
• taxes;
• insurance;
• professional dues and fees;
It doesn't cover:
• out-of-pocket travel expenses;
• conference calls that I set up;
• off site (large) amounts of
copying, printing, etc.
7. What I do take home, unlike a salary,
must cover:
• retirement;
• sick leave;
• health insurance; and,
• vacation.
8. Covering all those free consults.
Often, someone calls seeking my advice and
they get what they need from me in the first
hour. It is often helpful, if not critically
important, advice. However, it soon becomes
clear that's all they needed from me. If I
were an attorney, I (actually my billing
department) would just send a bill at the end
of the month and you'd just pay it.
I don't have to market myself much, but other
consultants have to.
Here is how I keep myself affordable.
• I set my rates lower than I
could.
It's not really sacrifice. I could make more
working in the private sector, but I'd just spend
most of the difference on alcohol, cocaine and/or
Prozac, because I'd hate what I was doing.
• I try to do only what you need
me to do, not all that needs to be done.
That work that can be done in-house or by
other less-expensive consultants should be.
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