Clients may prefer all-inclusive IT consultant rates. While these types of rates may be easier to manage for your company, they may limit your profitability.

The tips below will help you understand the differences between all-inclusive rates and charging for your expenses independently. This will help you make the best choices for your company.

Your clients may prefer that your IT consultant rates be all-inclusive. This will help them better budget your consulting work and minimize surprise costs. But for the consultant, all-inclusive rates can drain your profitability. Here’s why:

  1. How many times have you worked on a project, and your client presents you with something unexpected that he or she wants to be added? If you’ve already agreed on a price for the project, who’s paying for that? You are! This is called scope creep. While it’s fine to budget for a project, you must also explain to your client that any changes to the project will be subject to a change order at your hourly rate.

  2. Travel time is always an issue. It’s always best to schedule your time so that you can see two or three clients in the same general area on one day. This is especially important when traveling for a half-hour or more.  Consultants will typically charge one-half to one-third of their hourly rate for travel time outside their local area. Where can you lose on this if you “include” your travel time? If a client needs you to do an on-site visit at a satellite location four hours away, are you willing to absorb that? Maybe one time, but what if that client needs you to do this twice per month, for the next six months?

  3. So what about emergencies on weekends and holidays? Should they be part of your all-inclusive IT consultant rates? The answer is typically no! Since a lot of the work you do for clients is putting out fires, you need time to rest and recharge. If you absolutely must be there right now, even though it’s outside of your normal working hours, you should be paid a premium. This also encourages clients to think about whether they really need you or not, or if this is something that can wait until their next appointment. If you simply charge your all-inclusive rate, clients won’t think twice about calling you at any time, any day of the week.

The Bottom Line

If your IT consultant rates are all-inclusive, you could stand to lose substantial profitability.

It’s best to come up with a rate card showing your hourly rates, emergency/weekend/holiday rates, and travel charges.

In the long run, clients will be able to see how and where the fees they pay are being utilized. And you will be paid for your time, while you make sure that all of your expenses are covered.

Are your IT consultant rates all-inclusive? Or do you have a brief list of other charges that sometimes come into play? Please share your thoughts in the comments section below.

And to follow through on the strategies introduced in this short post, especially if you also consult on SaaS or Iaas, be sure to enroll now in our free 7-day eCourse: Go-to-Market Strategy 101 for B2B SaaS Startups and Scaleups.

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