To set consulting fees, research competitors within your industry, define your rate period, and draft a business consulting agreement. Consulting agreements establish a legal relationship between a client and service provider, thus the terms must be clearly defined.
- Research competitors within your industry
Your fair market value is the basis of your consulting fee. Fair market value consists of researched value, individual value and potential value. In addition, demand for your service is a factor affecting your price. Find competitors within your specific industry, and then analyze their financial data, such as revenue and employee salary figures. Utilize this information to arrive at your fair market value.
- Define your rate period
Consulting rates can be set as either variable or fixed. Variable rates charge based on a specific time period, such as hours or days. Fixed rates utilize a predefined amount that serves as the total consulting fee throughout the duration of a project. If uncertain how long a project may take to complete, utilize a variable rate.
- Draft a basic consulting agreement
A client is not required to pay the consulting fee until an agreement is in place. Various websites, including Entrepreneur.com, offer free consulting agreement templates. These templates specifically define the parties in the agreement, the applicable rates and the duration of the engagement.