Working for yourself and being your own boss maybe your ultimate end goal. Working on a variety of projects with a spectrum of clients can be empowering and gratifying.
As a consultant you are in charge, you have to register as self-employed, set up the consultancy, find your clients, put contracts in places and manage your workload. Not to mention, ensure you are delivering a top-notch service, whilst cultivating new leads and managing your finances.
But when it comes to finances, many don’t know where to start, not only do you need to file your taxes but also set your fees. Yes, there’s lots to do but taking a bite size approach to it all, is key.
Setting your Fees
For some reason when it comes to discussing money with clients, whilst we all want and expect to be paid well, nobody seems to want to talk about it. There is a reluctance to tackle this head on, we end up feeling awkward about asking to be paid for our services. Rather than being a taboo subject, it should be something we talk about more openly.
Setting your fees can be tricky, many questions spring to mind, such as, how much do you charge and how do you work it out? Do you take your current salary and multiply it? Do you charge an hourly or daily fee? Should you set a retainer fee? If you set your fee too low, you are doing yourself a disservice, and if you set it to high you may find yourself struggling to get any work at all.
There’s lots of advice out there about setting your fees, for example The Association of Independent Professionals and the Self-Employed (IPSE), has suggested taking the equivalent earnings you would have received as an employee and adding a third. This approach may work for you but if you’re like me, you’ll want to look at all the advice before making a decision.
So here are some tips on setting your fees:
Do your research, check out the competition and ask fellow consultants what they charge.
If you plan to consult via a recruitment agency, they will have set day rates, depending on your experience and the industry which you can adopt for private work.
Take into consideration your skills set and charge accordingly. However, be prepared to be flexible and negotiate but don’t sell yourself short.