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Sunday, October 08, 2006

IT Consulting: What Rates Should Act as a Starting Point?

Rates can vary quite a bit in IT consulting. Some charge zero, others at $25 - $45 per hour. But none of these are the most desirable rates for your IT consulting business.

IT CONSULTING BUSINESS START-UP: HOW MUCH SHOULD I CHARGE?

Ideally, when you start your IT consulting business you want to charge anywhere from $75 - $95 per hour so you can build a good reputation for your company. Starting out at a lower rate will give others a false impression of the sophistication of your business and its solutions.

IT consulting professionals that work with larger small companies charge over $100 per hour, depending on their specialties, their involvement in a vertical industry or where they are located.

IT CONSULTING BUSINESS RATE ADJUSTMENT

One of the biggest mistakes IT consulting businesses make in the beginning is undervaluing their true expenses, and many will end up charging too little for IT consulting services. The problem is, adjusting rates is very difficult, so as a computer consultant you need to set rates high enough in the beginning.

Your existing customers and clients will not respond well to significant rate increases and will often insist that you keep them at your initial rate, meaning a lot of clients are left that have been grandfathered in at lower rates that are not affordable for you.

THE REAL PROBLEM WITH RAISING RATES

When you grandfather rates, often half to a quarter of your total IT consulting business becomes worthless and unprofitable. You will probably not be able to easily convince existing clients to agree substantial rate increases without compromising trust and credibility.

Charge enough at the beginning so your business can remain profitable and grow. Otherwise you will find yourself scrambling later.

Blogged By: Computer Consulting 101