To survive as a consultant in any industry, you need to charge fees that will enable you to stay in business; at the same time, both you and your clients need to feel that your fees are fair and equitable. So how do you find the middle ground that seems fair to everyone involved?
When it comes to fees, the first rule in the consulting business is to be flexible. Sometimes, you’ll find a client really wants to hire you but can’t pay your entire fee. Depending on the situation, you may want to reduce your fee, either so you can get some much-needed experience or because you believe you can set yourself up for more work in the future by working cheaper now. But don’t sell yourself short; make sure you’re paid what you’re worth, since that fee sets the tone for future fee negotiations.
At the same time, don’t try to wring out the highest possible fee from your clients. You want to be fairly compensated, but if your fee is too high, you run the risk of losing the business completely.
The figure you arrive at should include compensation for your time, and compensation for your business overhead, such as travel, office expenses and so on. But when quoting a figure, leave room for some negotiation, because sometimes clients will ask you to reduce your rates by a set amount or a few percentage points to meet their budget. Just be sure you have a bottom line figure in mind when you sit down to negotiate so you know how much wiggle room you have.
When setting your rates, you have several options, including hourly rates, per-project fees and working on a retainer basis. Let’s examine each one.
Consultants often calculate a project cost based on the number of hours they expect to spend on it. To figure out an appropriate hourly rate, you can either use a source like the Careers in Business website to see what consultants earn in your area, or decide how much you’d like to earn in a year and do the math to turn that figure into an hourly rate. Experienced consultants often double or triple the resulting figure to cover overhead, benefits and other expenses; It’s reasonable for a new consultant to assume billable time will be around 50 percent, so double your rate so you’ll meet your expenses.. And if you think about it, a consulting rate of $40 to $60 isn’t out of line when you consider the expertise you’re offering.
When working on a project rate basis, a consultant normally gets a fixed amount of money for a predetermined period of time (a situation known as “work for hire”). It can be a little tricky to determine a project rate when you first start consulting because you don’t have historical information on which to base your hourly estimate. But once you figure out how many hours you think the job will take, simply multiply that figure by your hourly rate, then add 10 percent or so to cover unexpected contingencies.
How to register as a freelancer in Norway?
There are many options to register as a freelancer in Norway, but if you are a foreigner you must be aware of your registration and taxation requirements. You may read more about our employment solutions for freelancers here: Employment Solutions