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Hey guys,

So I’ve been working in the industry for awhile mostly as a network admin which stretches upon every aspect of the “network” including windows, linux, virtualization, storage, networking, etc… and i’m starting to get interested in going solo with my career.

The work itself is not in question, I feel I’m capable of planning for people’s business needs however where I really draw a blank at is pricing. How should I really determine my rates, and how much to charge. What do typical solo consults use a rule of thumb when coming up with their rates.

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A “rough average” is about $100/hr. Some go as low as $50-60… others on up to $140/hr. If you work with non-profits you could do a discounted rate and write the remainder off as a tax write off / donation (my buddy does this).

A good option is to do a contract where your client buys a set of hours per month for a discounted rate also (10-20 hours)… if they don’t use all the hours, it’s their loss.

Last place I worked at we (3 man operation) had a defined set of services that ranged from $80/hr for rebuild/reimaging desktops to $120/hr for network/server issues. We also charged 1-way travel time if it was outside our metro area.

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what ^ said plus it depends on where you live. All I did when I went solo was call a few IT support companies and ask them their rate. It was simple. I then priced myself slightly less per hour. I ended up charging $95/hr. I wanted to be under that magic number.

Good luck

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Rates are usually calculated on 3x what you want to make for salary.

So say you want $20/hour (kinda low, but lets go with it) you would charge $60/hour. 1/3 would cover salary, 1/3 for taxes/fees and 1/3 for expenses like car insurance/gas/and such.

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Guys,

Thanks a ton for this info I really had no clue how to calculate that stuff. This is really helpful,

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Now let me ask this,

Do you guys change your rates depending on the type of business/type of work. I would probably be doing SOHO stuff for the time being and moving my way up into larger businesses. Should I adjust my rates accordingly? As I feel like some places would just go to the local computer repair shop to get some work done like networking a small office.

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My rates were always the same. Don’t forget you need to pay MORE taxes on your income than if you were a regular W2 employee someplace.

The tip of the day is Don’t do residential! It’s brutal. They only residential I did was of a dedicated home office of an executive type person-and at that these homes were of business clients I had already.

You need to be easy to do business with. Don’t complicate your billing/minimums/etc…
There’s a million tech guys out there running around saying they can support “you”. Well how are you different from them? Are you smarter? or just cheaper?

A little sale/marketing/business acumen is helpful.

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Your rate should be the same. People are paying for your experience.

Easy way to sell them is, since you’re an experienced tech it may take you 1 hour to fix their problem, but someone else it could take 1/2 day because they were troubleshooting it all wrong. If you’re at $95 and they’re at $25 it just cost that person $100 or $5 more and 3 hours wasted.

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Were any of you guys working full-time while making the transition into solo consulting? How did you manage your time, were clients responsive about requests to meet at later hours or weekends?

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$100 is what the geek squad charges. if your not charging that I’d argue your doing something wrong.

This isn’t legal in the US to do with Labor.

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Assuming 100% utilization. Assuming if your having to do, Sales, Marketing, Travel. I’m not even sure if you would make minimum wage working $20 an hour as a sole prop.

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Retainer is a solid way to build a steady income.

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Just going through your last project (VMware, EMC storage, Cisco ASA’s) For solo I wouldn’t say anything under $140hr. Realistically doing contracting with 40 hour commits, and a 6 month project you should be able to get at least $80Hr based on some things I saw recently.

Just curious, whats prompting you to want to go solo? Its stressful. You’ll work insane hours. You’ll make less money.

If you just want to work in different environments and do projects, why not joing a Professional Services company? If you want to maintain a larger enviroment that includes diverse environments, join a MSP. And if you want to fly around a lot join a vendor’s PSO or SE force. All these options involve fewer audits, more booze/money/men/women than the boring old in house job IMHO.

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I always liked the idea of being your own boss type situation. Plus the money seems awesome. But overall I have a fear of getting pidgeon holed into one area of IT, say since I’m about to have my CCNP - I’d be looked at as a “network” guy but I really want to get into overall design, plus implementation. I feel going solo allows me to really flex my design muscles and get a lot of technical implementation experience also.

I work full time right now, and I’m not exactly sure how to transition smoothly into a solo career however if there’s other options I’d definitely look into them also. I’ve heard negative things about working for MSP’s but it could have just been a case based scenario. With PSO and SE - that seems to be very specific in nature, I’d like to stay really on full enterprise network design, working with microsoft, linux(if applicable), and networking.

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For most small businesses, if you position your services as IT consulting, advisory, and support, you can easily transition between disciplines.Networking, software, true consulting (planning, strategy, vendor selection, etc.).

As a general rule, avoid being the “computer guy” - which ends up being the “break/fix/support tech guy” and relegates you to that work only.

I have an article at informit.com on starting consulting part-time and moving into full time consulting work.
 http://www.informit.com/articles/article.aspx?p=2141277

Also, I have, “12 Weeks to Profitable Consulting,” one of the chapters of my book available as a free download. And no, you do NOT have to give me an email address or anything else to get it… at least, not yet.
 http://www.itcareertoolkit.com/12weeksconsulting/

Regarding Rates:
While I understand the concern about pricing yourself out of the market, I strongly recommend you establish a rate of at least $100/hr - and avoid companies that balk at that. Chasing lowest cost provider work is wasted time. Make yourself a boutique and trusted advisory to the best clients. As soon as a client questions an invoice or late pays an invoice more than 1 time, find a new client so you can prepare to drop the slow pay client.

Also, setting a reasonable (for you) rate is important because, if you DO NOT allocate time for administrative tasks, sales & marketing, and other downtime, you will not be able to stay in business. The mistake many consultants make is believing they will be billing 40 hours per week for 50 hours a year.

Determine what you need/want to earn in a year and calculate how to get there if you billed 25-30 hours per week and worked only 9-10 months consistently. You can end up with more, for sure, but using this calculation you can account for your own sick time, vacation, administrative time, sales & marketing, etc.

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Matthew,

Thanks a ton for the resources and advice, very helpful.

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