Re: Consulting Rates?

"SolarCat" <[EMAIL PROTECTED]> wrote in message
news:[EMAIL PROTECTED]
>
> After applying and interviewing for a Marketing Director position at a
> small high-tech company, I was told they've decided not to fund a
> full-time position now but may wish me to work with them as a
> consultant on specific projects. I'm open to such an arrangement, but
> having never consulted in this field I'd like some feedback on what
> rates might be considered standard and/or reasonable under the
> circumstances.
>

A few things:

1) The rule of thumb for the multiplier for an hourly rate is 2.5. That
takes into account that you have new expenses to pay on your own, like SS,
plus the fact that you won't be billing forty hours a week.

2) After having sold their soul by the hour, most consultants figure out
that they can make more money if they take a higher level of risk by working
on a per project basis. The point is to base your price on the value of what
you do for the company, rather than charge by the hour. Its a harder sell,
but hey, you're a marketing guy and I'm sure you can figure it out.

3) After you've been self employed for long enough, or too long for that
matter, trapped between the above two paradigms, you come to realize that
you aren't a business owner in the true sense of the word. You are nothing
more than your own boss and, even worse, you live and work from paycheck to
occasional paycheck. (Steak and hot dogs syndrome.)

What a "business owner" is supposed to do is build a machine, and that
machine is what makes the money. The business owners job is to take care of
and grow that machine. If you look at it like this, you can see how
difficult it is to build a "business", with true growth potential, when you
are the machine. (Read _The E-myth Revisited_.)

What I'm saying is that there is more to this than just coming up with a
fair rate. You have to perform the kinds of tasks that you can leverage, and
you have to look for opportunities to build a residual income, and multiple
streams of income, off the work that you do.

For example, this company you want to work for. Can you take on an exclusive
territory for yourself? If you accomplish more than a certain amount of
sales, are they willing to pay you a commission, perhaps in exchange for a
lower rate for now? OK, here's a tough sell: get them to give you some stock
in their company for free. You take their company from sales of 500M/year up
to 10MM and you all get rich.

Just my .02.

Mike