Consulting Fees

[JonasBlake]

Hi guys,

I am an electrical PE in Virginia, but I have been working for large firms for my whole career. I recently was approached to perform some consulting work. The work itself is well within my capabilities, but this is my first time charging for my time rather than working for a salary.

I was hoping someone could give me some suggestions on how to bill for my work. Is it more common to charge a fixed percentage of the project cost, and if so, what percentage? Or charge per drawing sheet? Or per KW of project size?

Or simply try to guess how long it will take, and charge expected hours times an hourly rate? And if so, what is a good ballpark hourly rate?

I don't want to gouge the client, but I also don't want to waste my time.

I understand that this is a tricky subject to give advice on, but I would appreciate any advice you can give!

 

[Knightryder12]

Hi guys,

I am an electrical PE in Virginia, but I have been working for large firms for my whole career. I recently was approached to perform some consulting work. The work itself is well within my capabilities, but this is my first time charging for my time rather than working for a salary.

I was hoping someone could give me some suggestions on how to bill for my work. Is it more common to charge a fixed percentage of the project cost, and if so, what percentage? Or charge per drawing sheet? Or per KW of project size?

Or simply try to guess how long it will take, and charge expected hours times an hourly rate? And if so, what is a good ballpark hourly rate?

I don't want to gouge the client, but I also don't want to waste my time.

I understand that this is a tricky subject to give advice on, but I would appreciate any advice you can give!

As a Sr. Electrical Designer at the firm that I work at I am asked quite often to come up with fees for projects that we do. I have never based a fee on size of KW on the project. I usually use a per square foot calculation and then work that number backwards to see if the hours that I have make sense. Sometimes on larger office projects you can not use the square foot number because the number would be to large, so I just look at how long it would take me to do the project. Hope this helps and welcome to the forum. I have just joined myself a few month ago, and its a really helpful forum.

 

[dereckbc]

Without knowing the scope of the work, I would say T&E. Or if this is a design/build project Cost + 15%

 

[qcroanoke]

Hi guys,

I am an electrical PE in Virginia, but I have been working for large firms for my whole career. I recently was approached to perform some consulting work. The work itself is well within my capabilities, but this is my first time charging for my time rather than working for a salary.

I was hoping someone could give me some suggestions on how to bill for my work. Is it more common to charge a fixed percentage of the project cost, and if so, what percentage? Or charge per drawing sheet? Or per KW of project size?

Or simply try to guess how long it will take, and charge expected hours times an hourly rate? And if so, what is a good ballpark hourly rate?

I don't want to gouge the client, but I also don't want to waste my time.

I understand that this is a tricky subject to give advice on, but I would appreciate any advice you can give!

Are you consulting or are you approving and stamping prints with your seal?

 

[lakeview100]

Hourly Rate

Hourly Rate

Based on a proposal from a MEP Engineering firm, they quote a fee for the project, and any extra work is hourly:
President: $150/hr
Project Mgr: $140
Project Engineer: $125
CAD Tech: $100
Administrative: $60

 

[ron]

See if you can envision (or cartoon) a set of drawings that would result for the project. Then take that number and take an average guess at hours per drawing. Such as 20 hours per drawing. Then multiply the number of hours times what you think your marked up rate would be, such as $150/hr

 

[JonasBlake]

Thanks for the help!

Thanks for the help!

Thanks for the responses! You all have been very helpful.

qcroanoke, I am going to be stamping these drawings, so I will have to be fully involved in the design, not just consulting. If I was just consulting, this would be easy, I would just do hourly.

I think my best bet is to take ron's advice, and try to do a mental walkthrough of how much I am going to have to put into this to do the drawings. I think that I will also try to work with the client to try out a pricing structure on the first project to see how it goes, perhaps a not-to-exceed price, to be re-negotiated for future projects. I am hopeful that this will be a long-term client, and they seem like they will be understanding of the fact that I am just starting in the business side of things. So, if I don't make much on the first job, I am okay with that, I will count it as a learning experience.

Anyway, thanks for the advice, and I will let you know how it goes!

 

[growler]

I recently was approached to perform some consulting work.

I am going to be stamping these drawings, so I will have to be fully involved in the design, not just consulting. If I was just consulting, this would be easy, I would just do hourly.

Why not just say what you were really going to do from the start?

There is a world of difference between being a "consultant" and being responsible for designing a project.

The work may be similar but the responsibility and liability are much different.

I would figure out how much it's going to cost to cover your assets/ass as well as possible with insurance just in case anything goes wrong. You will probably need to start your own engineering business and work as a corporation/LLC to protect you assets. Get legal advice to draw up your contract.

Figure out not only your time but also your overhead.

 

[dereckbc]

Jonas might this get you in trouble with your employer? Consulting on the side part time is one thing to make a few extra bucks. Design/Build is competition your current employer would likely object to as conflict of interest. Not trying to be a wise guy but if your were my employee and I caught wind of it, I would fire you on the spot, and maybe even file a law suite. Be careful.

 

[GoldDigger]

Jonas might this get you in trouble with your employer? Consulting on the side part time is one thing to make a few extra bucks. Design/Build is competition your current employer would likely object to as conflict of interest. Not trying to be a wise guy but if your were my employee and I caught wind of it, I would fire you on the spot, and maybe even file a law suite. Be careful.

+1. There are distinctions among "consulting", "freelancing" and "being self-employed and registered as a business or LLC and accepting contracts". Also, a difference whether still employed or "retired". When the OP said consulting it gave a wrong direction to the whole discussion.
PS: Would this perhaps require an Electrical Contractor's license in the OP's state, even if he is not involved in the construction side?
Is there construction supervision or monitoring included as part of the job?

 

[cadpoint]

.....
PS: Would this perhaps require an Electrical Contractor's license in the OP's state, even if he is not involved in the construction side?
...

Most States east of the Mississippi have this well under control, with respects to the above statement. I know engineers that work it both ways; in that an EE that has an electrical company and only works that and a EE that has multiple licenses but works only on the EE side.

Both VA and NC have seperate registration requiremenrts for EE's and electrical licenseing.