How to Set Consultant Fees and Rates

A consultant is someone who advises businesses, governments, public figures or other individuals on how to improve some aspect of their work, image or personal life. There are thousands of topics, areas and industries in which consultants operate regularly. One problem that arises with new consultants is how to calculate their consulting rate. Since areas of expertise differ--for example, one consultant my focus on corporate productivity while another helps with home organization--the rate that consumers are willing to pay will also differ.

Research what other consultants in similar fields are charging in your area. Consulting rates will differ depending upon geographic location. For example, a consultant in Manhattan may be able to charge more than a consultant doing the same work in Toledo, Ohio. Get an idea of competitive rates in your area by contacting other consultants directly. This will help you determine what your market will allow.

Set your base hourly rate based on your research from Step 1. The key is to set a competitive price that won't scare away potential customers or send them to the next consultant on the list. However, you also don't want to undersell yourself because you want to make as much as possible and a rate that's too low may convince potential clients that you're not good at your job.

Use your hourly rate to calculate specific daily or project rates. To figure out your daily rate, multiply your hourly rate by 8 (assuming an eight-hour workday). To calculate a project rate, estimate how many days or hours the project will last and multiply your hourly rate by that amount.