Consulting rates of your competitors provide an excellent starting point for your own billing rate analysis. If you know you competitor's consulting rates you can analyze various rate scenarios within a tighter range. You don't want to under or over price your own services and this information gives you valuable insight into what your target clients are currently willing to pay.
Techniques For Competitor Sleuthing
If you have friends or acquaintances that are niche technology providers, ask them what the going consulting rates are
Ask business partners, accountants and management consultants what consulting rate their clients pay
When you go to user group meetings, inquire about the going consulting rate in the area
Try to access government bid information - the consulting rates will be quoted
Look through old paperwork supplied by your clients and see if there is any mention of the consulting rate - purchase history, work billed, etc...
The Bottom Line on Consulting Rates
Setting your consulting rate requires knowledge. You have to know what your services are worth in the market. The best way to do this is to find out what your competitors' consulting rates are. Get creative: use your network, don't be shy about asking people outright, and do some snooping. Once you know the going rates in your area it is much easier for you to strategically position your own consulting rate.
Setting your fees and rates can be confusing for both beginning and veteran consultants alike. The following should help you determine exactly what rate is right for your consulting business.
1. What amount am I willing to accept for my time?
2. What amount are people willing to pay me for my time?
3. What range of pay has the market set?
You will find that some of these methods work better when you are in the initial stages of launching your consulting business, while others will be advantageous once your business is established. See also: