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Going rate for consultant in NY

Posted on 2016-08-16
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How does one calculate their going rate for consulting work in NY?
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Question by:Peterson50
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by:David Johnson, CD, MVP
David Johnson, CD, MVP earned 150 total points (awarded by participants)
ID: 41758766
This is a pretty general question. The only real answer is set it as high as the market will demand.  The more specialized your consultancy the more you can get paid.  What is your skill set and what is your expertise?

For instance I have a 250,000 sq.foot school <this is a greenfield no existing infrastructure), 500 students, 25 teachers, 15 support and administrative staff.  90% using a light office worker load, 5% high office worker load, remaining 5% high productivity worker.  I need a server solution that is highly available, for all users in a RDS environment, what server equipment should I buy, routers, switches, etc.. Cabling will be done by another contractor, you are responsible up to the patch panel and only for the server room components. We have per-budgeted $40K USD for the equipment and setup costs, is this a reasonable goal?
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by:John Hurst
John Hurst earned 100 total points (awarded by participants)
ID: 41758769
Also, there is a certain premium for a big metropolis like New York City. My skill set where I live (Greater Toronto) would bring a $25/hour premium in New York City.

David gave very good answer above as well.
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by:pgm554
pgm554 earned 100 total points (awarded by participants)
ID: 41758776
As the man pointed out ,it depends.
Don't sell yourself short.

I was brought in as a consultant for a major insurance company on a long term 1Year + in a mid sized city for $85/hr plus expenses back in early 2001.

Novell did a 1 week consult at the same company for $25K and all they did was put in writing what I all ready had suggested .

So for  40 hours Novell got $625/hr.
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by:Peterson50
ID: 41758782
Here's the situation I'm in NYC and had a contract installing a brand new system, server, cabling, workstations etc.  One of the main employees husbands is friends with the owner and now has asked me to setup his brand new building again server, most of the cabling was done by their workers but we may do some termination along with 7 workstations, router, switch etc.

I have no doubt that he knows the rate I charged the other company, is it wrong to charge a higher rates lets say $30 more an hour.  What reason do I provide if he questions why are you charging so much more or should I keep the rate the same as basically I got this through a referral.

Thanks
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by:John Hurst
ID: 41758786
If the first company is in the same city area as the second one, you will have to justify, first to yourself, and second to the second company, why you are increasing rate.

Perhaps the new rate is your bench rate and the prior rate was to secure business at a discount.
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by:Peterson50
ID: 41758799
I see the reasoning my wife who works for a law firm came up with the same explanation.  I'm just concerned my rates are too low.  I'm assuming the rates in NY vary from $150 to $200 is that correct, I'
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by:John Hurst
John Hurst earned 100 total points (awarded by participants)
ID: 41758801
Even in NYC you would have to be very good to charge $200 per hour.

I am sufficiently good here where I am that I have never lost a client. I charge a bit below market but not that much.

Even $150 is a very healthy rate.
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Lee W, MVP earned 150 total points (awarded by participants)
ID: 41758838
First, while asking here can be helpful, there aren't nearly as many potential people to answer this question as there if you actually ask New York Based Consultants.

I would suggest, if you're consulting NYC, especially for small businesses, you join the user group I'm helping to run - the New York Small Business Server / New York Small Business Specialists user group.  www.nysbs.net (no fee to join or attend meetings).   We meet second wednesday of every month at the Microsoft Times Square Conference Center.  Ask this question of them and you'll probably get a lot of people who dodge it, but most that I know will charge between $125 and $200 per hour.  How much you charge depends on your demand and your skills.  It also depends on your math - see my article on the topic:  https://www.experts-exchange.com/articles/1905/How-Do-I-Know-What-to-Charge-as-an-IT-Consultant.html

You might want to look into setting up contracts for your clients and they should specifically state the rate is confidential.

Have you been consulting long?  Will you continue to do consulting?  Do you charge for travel time?  You might want to look at CAREFULLY estimating what it will take to implement and then offer a flat fee.  You get it done faster, you make more, effectively, per hour.  You screw up and take longer, you make less.  Doing this would require a carefully thought out and well defined scope of work - you don't want the client coming back to you a week in and saying, oh, by the way, we need you to setup 2 copy machines as well on the network and install the software on all workstation.
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by:David Johnson, CD, MVP
David Johnson, CD, MVP earned 150 total points (awarded by participants)
ID: 41758877
Another item not covered is your type of business Singe Proprietorship or LLC.

Assuming Business TAX of 20% and Personal Income Tax of 20%  Net Profit $1,000 (assuming only Federal Taxation not State or LOCAL business taxes)
SP - $220 Taxes
LLC - Taxes $200 leaving $800 -  Shareholder/CEO $160 on the 800 in Personal Income Tax= Total Taxation $360, increased Accounting Fees.
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Author Comment

by:Peterson50
ID: 41759193
This has been very helpful. Just curious do you charge the same rate to all your clients or sometimes do you have different rates depending on work and size of firm.
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by:John Hurst
ID: 41759265
I charge the same rate for all clients. My rate is competitive and in my sphere of business, there is no reason for different rates. That does scare away some very tiny clients and that is fine with me.
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by:Lee W, MVP
Lee W, MVP earned 150 total points (awarded by participants)
ID: 41759446
I have one starting rate for all clients.  I may then discount it for a variety of factors.... geographic location, service type, non-profit.  All invoices list all time spent servicing the client and then discount lines indicating how much I may have discounted off the rate.

I then tell people that discounts are invalidated if they pay late, nor will they accrue once an existing invoice is late.  (I tend not to enforce the former too much, but the latter is much easier to enforce).  It's like a late fee, but higher and without calling it a late fee.
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