What do consultants charge?

leftieM

I hope there are some consultants out there! What is the going rate for a scientific consultant? I will be based at home and have a PhD and 6 years employment experience. I have had a couple of figures so far - a university based consultancy charges £480 a day. Someone on a business course I went on said the rate was between £350 - £400 a day. I am thinking of charging £50 an hour/ £200 for a half day.
I hope some of you have some information! As you know, it's really important to get this right at the beginning.

Astaroth

For IT consultants we pay £300 - 430 a day for programmer types and up to £1000 for strategic IT planners

In my last job (business/ strategy consultancy) we charged £400 a day for our junior staff going up to £1500 for my boss/ head of the department

A lot depends on if you are a true "consultant" or really a glorified temp - the latter tend to significantly less money but the contracts are often longer and more numerous

ffeindadifyr

Excuse my stupidity, but what exactly does a Scientific Consultant do? I can see what an IT consultant or a consultant who is specifically trained i.e. in Environmental studies does.

What I'm trying to get at is... do you need a speciphic knowledge base or do you just apply your scientific skills in general?

Astaroth

It is the same as any other consultant... they are brought in to "help" a company and have skills that are either lacking or in too shorter supply within the company but demand is not such that hiring a new member of staff is more efficient.

as a very basic example - if you are developing a new make up and you have all the experts on skin reactions etc but your lab tests show a change in metabolic rate you could either outsource the testing to another company to find out why, hire an expert on this type of biochemistry or hire a consultant to work with you to find out the cause.

leftieM

My consultancy will be based around a new EU directive that requires all new and existing chemicals to be registered and tested as necessary. It's a load of bureaucracy - hence the opening for a new business. I'm an organic chemist by profession so I'm hoping to apply my training to assist companies to comply with the regulations. They could do it themselves but it will take an employee to train up and if they 'rush' an application it will probably be sent back to them for alteration, costing them more in time and application fees.
Judging by posts so far, £50 an hour is reasonable for a consultant.

bert&ernie

It really depends on the market for your skills in a particular industry. From what you have said, £400 day would seem reasonable for your line of work. You might have to drop your rates in order to secure some business in the beginning though.

How are you going to invoice your clients? Are you going to set up a limited company or go down a different route like an umbrella company?

Tax can be a tricky issue if you go Ltd. You should probably try and get some advice from an accountant or tax expert before you start making income estimates. Remember that you will need to earn considerably more than a permie to offset the risk or being out of work for any length of time.

leftieM

I'm going to be a sole trader. I'll have to do more market research to decide my fee - I'll phone up a few potential clients and ask what they're prepared to pay (if anything!)

Astaroth

The "old trick" with these things is to phone some of your competitors with a job brief similiar to what you want to be doing (claiming to be a new startup etc) and see what the quotes you receive are. You can even try negotiating with them and see what they will go down to

leftieM

Great tips - thanks.

WHA

I would never recommend lowering your rates to get work when you first start up. You're a professional/consultant, not someone selling boxes of corn flakes. If your charges are too low, you will have extreme difficulty in increasing them further on and you may end up with too many clients, making you a busy fool (nothing personal, just a saying!!).

Charging too little is nothing more than devaluing yourself. As others have rightly said, you need to find out the going rate for your industry - if that means being sneeky and phoning competitors for quotes, then so be it - your future competitors will do it to you believe me!

If you really "have to" discount yourself to get work, don't reduce your charge, but offer to do more for the same rate. Tell your customers that you're half day rate is £250 and full day rate is £400, but that you'll do the first full day for price of a half day "to give me the opportunity to prove myself to your organisation". By doing so, you've clearly told them your charges for the future so they'll know what to expect and also show that you believe in yourself.

I suspect your customers will be medium to large companies and perhaps charities/govt quangos, so they'll be expecting to pay £500 per day or more for a consultant as that is what they're already accustomed to. However, if your target customers are small owner-managed business with few employees, then you're probably out of their affordability league and would have to charge less.

Astaroth

Large organisations are more motivated by things like credentials, availability, flexability etc rather than price.

Small organisations by their very nature have to be more cost concious