Figuring out what to charge

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How do I figure out what to charge? How do I determine what a reasonable day rate and hourly rate are?

-- Michelle Dixon (meddixon@hotmail.com), December 13, 2000

Answers

Check these past stories out...

http://www.fastcompany.com/feature/00/act_rossheim.html http://www.fastcompany.com/online/28/toolbox.html

And these outside resources...

http://www.freeagentnation.com/university/business.html#sell https://www.guru.com/tbm/entry.jhtml

Good luck! Heath

-- Heath Row (heath@fastcompany.com), December 14, 2000.


I think there are two basic considerations - 1) What is the average rate in your marketspace, and 2) How do you position yourself relative to your competition?

1) Do some research here, but don't dwell on it too much. How much are your competitors charging? In my industry that varies from $80/hr to $325/hr, so I look at those firms/people who have the same level of skills that I do - essentially eliminating the outliers and giving me a better range (from $150 to $225 in my case).

2) How do you position yourself against your competitors? This will help you determine where your basic rate will fall in the range you just surveyed. If you position yourself as a more experienced, more knowledgable person, then that justifies a higher rate.

After you do this, there are always other factors that enter the picture. You may cut your rates a bit to gain a high profile client, or to gain a client that will help you learn new, valuable skills. Or you may increase your rate for clients that require more than the usual level of service.

-- Steve Bogner (sbogner@insightcp.com), December 15, 2000.


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