Yesterday one of my old accounts called me and asked if I would be interested in doing some consulting work for them.
When I called on them we did a lot of work in the milling area and saw gains regularly of 30-50% in productivity.
They are having the same troubles with 2 new Swiss style machines and would like my help.
I went in and met with them yesterday for 3 hours. Their issues are not insurmountable and I think we can make some really nice gains.
I do not know what to charge them and need some input from you all.
I'm kind of thinking in the $50-$70/hr range.
I don't want to underchage them but at the same time I don't want to gouge them. I do like these guys after all, and there's the potential for my shop doing some work for them.
Thoughts?
A decent hourly rate plus a bonus based on measureable improvements.
Interesting. I hadn't considered an improvement based bonus.
Quote from: WarrenJ on September 21, 2011, 07:36:00 AM
A decent hourly rate plus a bonus based on measureable improvements.
+1
My machining forum is saying $60-$80 to cover tax liabilities
I'm guessing this to be around 20 hours worth of work worst case.
They should see a cost savings of thousands based on how many of these little parts they make a year.
My plumber in Asheville gets 90 an hour...go from there
Also you may want to draft a SOW scope/statement of work or something
or work per diem or per hour with a published rate
so you don't get sucked into the black hole of un-billable ad hoc assistance
if you want a cut of the improvement in savings to them define some measurable starting point and assessment point that is agreed upon
Good call.
Often, a higher price means better quality....
Consulting is always expensive, because it's a quality demand they can't meet themselves.
Is there a really good reason why you're not worth $ 150? (other than modesty)
Either that or a success bonus. If it was me, being asked and being confident, I'd try to get both.
[thumbsup]
$100/hr.
You're saving them a small fortune forever. Totally worth it. Sell yourself.
Quote from: peeny on September 21, 2011, 12:32:11 PM
$100/hr.
You're saving them a small fortune forever. Totally worth it. Sell yourself.
I'm getting ready to email them now.
That's the price I'm quoting.
Approved.
[thumbsup]
Good luck!
I know IT is a different world but I get $75/hr for direct consulting work.
I will go as low as $55/hr if there is a performance based bonus invlved but the bonus has to be decent.
At least $70/hr not including performance bonus.
+1 on the SOW
Sow?
Quote from: Monsterlover on September 21, 2011, 03:18:04 PM
Sow?
Quote from: RAT900 on September 21, 2011, 08:49:35 AM
My plumber in Asheville gets 90 an hour...go from there
Also you may want to draft a SOW scope/statement of work or something
or work per diem or per hour with a published rate
so you don't get sucked into the black hole of un-billable ad hoc assistance
if you want a cut of the improvement in savings to them define some measurable starting point and assessment point that is agreed upon
;)
Ahh.
Yep, did that. Laid it all out in the email. Omitting certain important details of course
:)
Quote from: Monsterlover on September 21, 2011, 07:29:28 AM
Yesterday one of my old accounts called me and asked if I would be interested in doing some consulting work for them.
When I called on them we did a lot of work in the milling area and saw gains regularly of 30-50% in productivity.
They are having the same troubles with 2 new Swiss style machines and would like my help.
I went in and met with them yesterday for 3 hours. Their issues are not insurmountable and I think we can make some really nice gains.
I do not know what to charge them and need some input from you all.
I'm kind of thinking in the $50-$70/hr range.
I don't want to underchage them but at the same time I don't want to gouge them. I do like these guys after all, and there's the potential for my shop doing some work for them.
Thoughts?
I read exactly 0 replies...
Charge them $100/hour
Remind them what my dad taught me...
cheap is expensive and expensive is cheap.
I quoted $100. They don't need reminded what your dad taught you. They know I can produce results.
Just a quick update to this.
I just talked to this company and they approved my $100/hr fee if I work for $75/hr for the first three hours, which I thought was fine.
Sweet! 8)
Thanks everyone for your input.
Quote from: Monsterlover on October 14, 2011, 12:01:22 PM
Just a quick update to this.
I just talked to this company and they approved my $100/hr fee if I work for $75/hr for the first three hours, which I thought was fine.
Sweet! 8)
Thanks everyone for your input.
Good luck...
My guess is you work 2 1/2 hours.
Call me cynical. :P
[laugh]
They need more help than that. We're probably looking at 10+
They won't skimp, they'll do it right.
Quote from: Monsterlover on October 14, 2011, 01:22:16 PM
[laugh]
They need more help than that. We're probably looking at 10+
They won't skimp, they'll do it right.
I just couldn't resist. ;)
I know...
Quote from: Monsterlover on September 21, 2011, 07:29:28 AM
I do not know what to charge them and need some input from you all.
Thoughts?
$11ty billion.
Just an update.
I worked with these guys for 18 hours or so over the last couple months. So far I have cut their part cycle time by 30 seconds which translates to about $5,000 a month in cost savings.
We are waiting on a custom tool to come in (10 week delivery) and once that is in place another 30 second gain may be possible (for another 5k a month)
They are thrilled and so am I because the check just showed up (i wanted to wait until we saw a tangible gain before I billed them) They paid in 30 days which are my standard terms.
I'm going to have them write me a testimonial letter and will offer consulting services as part of my shop's ability. I don't expect to do it much, but a little extra income will be nice when I can get it.
It's certainly saving our asses this month [laugh]
[clap] [thumbsup]
Don't forget you will be liable for income tax, self employment taxes and payroll taxes out of yoru own pocked.
Whatever your tax rate is, double it and add about 5%. That's what you pay when you are 1099.
$100/hour, and you're in the 25% tax bracket?
double for the payroll tax = 50% + 5%
=$45/hour take home.
Quote from: ducatiz on January 13, 2012, 11:11:03 AM
Don't forget you will be liable for income tax, self employment taxes and payroll taxes out of yoru own pocked.
Whatever your tax rate is, double it and add about 5%. That's what you pay when you are 1099.
$100/hour, and you're in the 25% tax bracket?
double for the payroll tax = 50% + 5%
=$45/hour take home.
Well be a 0% bracket for the next couple years.
I billed them through my company. We lost money last year. Probably wont this year but the company owes me and wife so much that I can draw out the repay for probably two years (instead of taking a salary)
I just turn it all over to my accountant and if I don't understand the numbers I ask questions :)
Quote from: ducatiz on January 13, 2012, 11:11:03 AM
Don't forget you will be liable for income tax, self employment taxes and payroll taxes out of yoru own pocked.
Whatever your tax rate is, double it and add about 5%. That's what you pay when you are 1099.
$100/hour, and you're in the 25% tax bracket?
double for the payroll tax = 50% + 5%
=$45/hour take home.
It's good to be self employeed. [bang]
Quote from: The Architect on January 14, 2012, 08:49:10 AM
It's good to be self employeed. [bang]
It is.
And even if it does actually shake out to $45/hr that's a bunch more than I ever made working for the man.
Quote from: Monsterlover on January 14, 2012, 08:59:33 AM
It is.
And even if it does actually shake out to $45/hr that's a bunch more than I ever made working for the man.
Yes it is.
It gets frustrating when you only have 5 billable hours some weeks........
But you don't hear me complaing when I leave work early on Friday's to take my kids skiing. ;)
What's frustrating is the math.
Quote from: The Architect on January 14, 2012, 08:49:10 AM
It's good to be self employeed. [bang]
Set up an LLC, include your spouse or a friend so you don't get "disregarded entity" status with the IRS.
Make yourself an employee.
Carve out a section of your house for an office.
Put all your business expenses, etc under the LLC, rent, etc.
Voila.
Pretty much exactly what we did. Except I'm not an employee. So far.
Quote from: ducatiz on January 14, 2012, 09:32:33 AM
Set up an LLC, include your spouse or a friend so you don't get "disregarded entity" status with the IRS.
Make yourself an employee.
Carve out a section of your house for an office.
Put all your business expenses, etc under the LLC, rent, etc.
Voila.
Quote from: Monsterlover on January 14, 2012, 09:35:38 AM
Pretty much exactly what we did. Except I'm not an employee. So far.
as an employee, your LLC will pay the payroll taxes which then become a business expense (as does the overhead of preparing them) so you get a marginal bump because you aren't paying out of your personal income.
also, with an LLC, the LLC can pay for company training which is deductible of course, but if you're a W2 of that company you can separately deduct items like "required uniforms" "training" travel, etc. You don't get a huge amount for that off your W2, but if you are an SMLLC (single member) or you are just 1099 from an employer, then you can't take the 1:1 deduction off the top like an LLC can and then take others like "required uniforms."
and since you own the LLC, you can state whatever uniform requirement you want, but bear in mind it has to be something 'not suitable for everyday wear.' required uniform cost may also include deducting cleaning costs. It is arguable that an outfit with a company logo is not suitable for everyday wear because it is advertising for the company. no one has tested that though.. :-)
[thumbsup]