Comments on John Kellar's Blog: So you want to be a consultant? – Billable Hours

Thanks Joe, two excellent points. I actually coun...

2009-06-25T08:15:35.616-05:00

Thanks Joe, two excellent points. I actually count these types of tasks as no contract time, but didn't do a good job pointing that out in the post.

- Many people do these types of activities outside of their billable hours, but they definitely take their toll. It goes to show that you should not expect to be a 9-5 person if you are consulting on your own.
- The project versus contracting is definitely different and requires a considerable effort to keep projects coming. Even if you are just contracting, if you are getting your own work it can be very time consuming.

Good information. John! There's also a fair amou...

2009-06-25T06:59:57.460-05:00

Good information. John!

There's also a fair amount of non-billable work that must be done either during the work day (taking way from billable hours) or during the evenings (taking time away from your family). Tasks such as creating/updating your web site, filling out state and local tax forms, etc.

Another consider is that if you're doing primarily project based work rather than augmenting a client's IT staff (contracting), you may end up spending a non-trivial amount of time meeting with prospects, writing proposals, etc.

Most salaried employees have very diverse salaries...

2009-06-25T00:24:44.537-05:00

Most salaried employees have very diverse salaries, so the formula you mentioned could vary widely. I would venture to guess that most salaried employees are not getting paid a market wage either, so you could undercut yourself.

A number of things come into play when deciding a billable rate. For example:
- Supply and demand
- Experience of the individual
- The type of service being rendered (i.e. architecture, development, strategic consulting)

The list can go on. As to your question about $125 being a reasonable rate. It depends. :) I know people who would accept $50/hr and others who charge much more. If you can ask for $125 and someone is willing to pay that rate, then it is reasonble.

Back in the "good old days" of 1998 I was told tha...

2009-06-24T23:54:58.347-05:00

Back in the "good old days" of 1998 I was told that a consultant should charge twice the hourly rate of a salaried employee; does that still hold true? i.e. an experienced FoxPro developer at $50k salaried (estimating 2000hrs/year) = $25/hr salaried would translate into $50/hr as a consultant. And yet, the consultants hired by my employer (in Denver) were charging corporations $125/hr. Is that even reasonable nowadays?