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Posted By Peter MacDonald
Hi
Can I ask how people have come up with a "rate" you charge for your services. Is it Hourly/daily or based on contract value.
Obviously I'm not after your actual rates but is there an industry standard.
I'm really interested in going self employed but unsure about what income I can expect.
I'm looking at CDM coordination in the demolition industry. Based in Scotland.
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Posted By Crim
Hi Peter, good luck to you.
I went self employed three years ago and was very cheap. This got me lots of work for clients who only wanted to pay peanuts for essential work.
I gradually increased my charges and dropped/lost a few clients but kept the better ones who are prepared to pay more for better quality work. Less work - more money. It suits me fine.
I charge by the hour and claim out of pocket expenses at face value, i.e. car park and tolls. Mileage is .40p per mile.
If I work a full day I will reduce the fee.
I get enough work to keep me going but do not work every day.
Your need to prepare for working for nothing, preparation time and meetings etc. The more you put in the more you will get out.
P I insurance is essential as is a reliable car and cheap phone tariff.
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Posted By David Bannister
Hi Peter, I try to work for a set fee for the job where possible as this gives the client some security of price. Otherwise I use a daily rate.
I decided at the start of my self-employed life that I would not under-price myself and I have so far managed to keep the bailiffs from the door. I have refused work at very low rates and had idle time as a result, but I would much rather do work that was valued. The "idle" time can always be used for CPD or posting nonsense here!
As Crim says, do not overlook PI insurance, particularly as you appear to be looking for high-hazard work where a simple error may have very significant consequences.
Congratulations Crim on managing to raise your rates. I recall the past thread on the subject and hope that you have found it a worthwhile change.
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Posted By Crim
Hi David,
Thanks for your support, the work is still coming in and I am still turning work away.
You may have seen my recent posting re CDM-C? I have a meeting this afternoon with the MD who wants to hand me all CDM work for one of his clients (a high street retailer). I would be interested in the going rates for that type of work?
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Posted By Ian G Hutchings
Peter
Our rates are calculated based on:
1) Gross business costs for the year.
2) Expected average chargeable client days (average varies between 100 and 125 days per head).
3) Expected net profit on top of the rate.
There is also a 'value' based proposition, for example if the consultancy service can solve a particularly costly problem, the rate will be proportionate to the delivered solution.
There is a recognition that some work is more valuable than others. For example solution based consultancy will be priced higher than risk assessment training. The fee will also reflect the competency level and expertise of the consultant.
Hope this helps?
Ian
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Posted By Peter MacDonald
Thanks to the above answering.
Interesting food for thought. It's a big decision but I'm fed up working for the man!
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Posted By David Bannister
My personal perception based on experience is that it's better than working for a woman (takes cover muttering that he meant one specific woman).
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Posted By Garry Homer
Ian has hit the nail on the head for an established business but the format is hard to apply to a new business where the required data is missing.
You will have to pitch your business somewhere between the cheapest and dearest. You will soon get a feel for where you are depending upon if the phone keeps ringing or not.
My method is to undercut the most professional service available yet still provide that level of service. I'm prepared to wait for the right client. My business is undercut by some, but they will soon fall by the wayside as they fail to generate funds to replace equipment and vehicles.
Decide if it is a day rate or job rate. Day rates are harder to sell as the client will want to know how many days will be involved before you know the size of the job. But, day rates will enable you to submit invoices on a monthly basis for long term work if identified milestones are set and reached.
Cautionary tale - I know a few people that were encouraged by clients and even employers who wanted to 'out source' to set up their own business only to find they were initially worked to death and then dropped. Everyone has a motive when they suggest something. Clients see cost savings and employers see a way to push you to work harder and not to pay any redundancy.
Good luck if you decide to jump off the big roundabout.
Garry
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Posted By Ian G Hutchings
Some good points from Gary, especially when starting out. Believe it or not most people do not buy solely on cost. Those that do may drop you for a cheaper option eventually.
A useful tip I heard was that you should always feel slightly uncomfortable with your pricing. When the work is coming in and no one questions fees it may be time to increase them.
Some clients do want quality and will usually pay for it. If you are going for lots of lower fee work that is fine, you can still make a reasonable living. It is important to know where to pitch the business early on. I know some clients that will definitely not use people because they have been too inexpensive.
It is very competitive and there are more and more people deciding to set up. Please ensure that you have done some market research before making a decision. Unless you are loaded of course!
Cheers
Ian
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Posted By Frank Newman
Forget the "Frank". The web team have disappeared my name and password again !
This is Merv.
when I started freelancing about 15 years ago I just thought of a number which, if I got about 100 paid days a year,would give me a disposable income roughly equivalent to my old salary. Seemed to work. travelling and living expenses are extra.
Then got asked to quote for a job I reallyreally didn't want to do : (somewhere in North Africa) So I doubled the day rate. And they took it !
Been there or better ever since
Merv
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