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Small Business Computer Consulting: Appropriately Setting Your Rates
By Joshua Feinberg
In small computer consulting, $100 an hour can be a reasonable and livable rate. Why can setting your rates at $100 an hour make all the difference in the world?
Take the $100 an hour and multiply it by 1,500 hours a year. This is reflecting a 75% utilization rate; or 75% of a typical forty hour work week as billable time. Now you’re at $150,000 a year gross.
Salary and Affordability
As a small computer consulting firm, you will want to take a third of the gross and plow it into sales and marketing. Therefore you can afford a $40,000 base salary for your sales account executive. So, of that one third of your gross small computer consulting income, $40,000 can go to the base salary and $10,000 can go to related marketing expenses.
Additionally, one third will take care of taxes, insurance and overhead items for the most part, and you have a third of it or $50,000 left to pay a technical
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staff salary.
Surpassing $100 an Hour
You may be considering exceeding a rate of $100 an hour for your small computer consulting firm. At that point, you can hit what we call the not-so-imaginary-hourly-billing-rate ceiling.
Needless to say, if your small computer consulting clients are paying $110 to $125 an hour, it gets even easier to be able to afford really bright, motivated, highly qualified sales and technical staff.
Higher Rates Equal Bigger Businesses
However, if you want to charge above $100 an hour in your small computer consulting firm, you’ll almost always need to move above and beyond sweet spot small clients into really large small businesses, medium size businesses and enterprise-sized accounts that require a different model and technical skill set.
Once you do that, you’re going to be operating under a completely different type of model. And you will need even more polished and seasoned salespeople to be able to handle those accounts.
Copyright MMI-MMVI, Computer Consultants Secrets. All Worldwide Rights Reserved. {Attention Publishers: Live hyperlink in author resource box required for copyright compliance}
Joshua Feinberg helps computer consultants get more steady, high-paying clients. Learn how you can too. Sign-up now for Joshua's free Computer Consulting Sales audio training.
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