http://www.moneyandinvesting.net/2007/02/16/mechanics-of-consulting-how-much-to-charge-average-rate/ Making you richer every day. Tue, 22 Dec 2009 00:16:54 -0700 http://wordpress.org/?v=2.8.6 hourly 1 http://www.moneyandinvesting.net/2007/02/16/mechanics-of-consulting-how-much-to-charge-average-rate/comment-page-1/#comment-155 No Shortage of Salespeople: Of Workers Maybe : Money And Investing Fri, 16 Mar 2007 03:43:35 +0000 http://www.moneyandinvesting.net/?p=19#comment-155 [...] The second finding I get is that what percentage of the earnings go into each bucket has a direct impact on the minimum amount of money that the salespeople could charge to their clients for consulting services. I have seen too many salespeople who try to outbid (or underbid) their competitors in order to win the business to later find out that they can’t find consultants willing to work for the amount of money they can pay them. For example, in our 15/15/20/50% example, this means that if you charge $1000/day for a consultant, the most you can pay such person is $500/day. From my previous 100 day/year billable time analysis I can conclude this consultant would earn $50,000/year (before paying all of his/her taxes insurance and administrative costs). Almost no computer worker would be willing to work for that amount. $2,000/day ($1,000/day for the consultant) would be more realistic, matching more closely what big companies charge for their average consultant. [...] [...] The second finding I get is that what percentage of the earnings go into each bucket has a direct impact on the minimum amount of money that the salespeople could charge to their clients for consulting services. I have seen too many salespeople who try to outbid (or underbid) their competitors in order to win the business to later find out that they can’t find consultants willing to work for the amount of money they can pay them. For example, in our 15/15/20/50% example, this means that if you charge $1000/day for a consultant, the most you can pay such person is $500/day. From my previous 100 day/year billable time analysis I can conclude this consultant would earn $50,000/year (before paying all of his/her taxes insurance and administrative costs). Almost no computer worker would be willing to work for that amount. $2,000/day ($1,000/day for the consultant) would be more realistic, matching more closely what big companies charge for their average consultant. [...]

]]> http://www.moneyandinvesting.net/2007/02/16/mechanics-of-consulting-how-much-to-charge-average-rate/comment-page-1/#comment-112 And Like That, He Was Back : Money And Investing Wed, 28 Feb 2007 22:51:47 +0000 http://www.moneyandinvesting.net/?p=19#comment-112 [...] Just like that, a month and a half since I left the world of gainful employment I will start at a new job in a Pre-IPO startup company (beginning of April 2007). So much for my self-employment trial, and I say that with sadness as I was already enjoying the fun of having my own business (which I will keep on the side for miscellaneous purposes).There is something I discovered during my numerous hours thinking about the business model: there is a stage in anyone’s career where the value of the ability to decide how perform a work exceeds the value of the ability to perform the work. My late employer valued my ability to decide how to perform a task or implement something a lot. The market also values my ability to perform it, but I have discovered that if I did 100 days of billable work at my current rate I would make close to what I made in gainful employment in base salary. If I do more than a 100 days of billable work the number will most probably come closer to what I have been doing, plus bonuses. [...] [...] Just like that, a month and a half since I left the world of gainful employment I will start at a new job in a Pre-IPO startup company (beginning of April 2007). So much for my self-employment trial, and I say that with sadness as I was already enjoying the fun of having my own business (which I will keep on the side for miscellaneous purposes).There is something I discovered during my numerous hours thinking about the business model: there is a stage in anyone’s career where the value of the ability to decide how perform a work exceeds the value of the ability to perform the work. My late employer valued my ability to decide how to perform a task or implement something a lot. The market also values my ability to perform it, but I have discovered that if I did 100 days of billable work at my current rate I would make close to what I made in gainful employment in base salary. If I do more than a 100 days of billable work the number will most probably come closer to what I have been doing, plus bonuses. [...]

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