Wednesday, September 28, 2011

RE: Billing Rates

I’ve got pages on my website discussing this, but here’s what I’ve found over the years.


1. If you have a regular client who sends you regular work for lump sum or percentage, it’s usually worthwhile to “eat” the costs for travel to remote sites. Such a client would need to supply upwards of 25% of billable hours for this to be a reasonable sacrifice for maintaining a relationship.

2. If you have some random person call you needing a one-off contract for work, ALWAYS bill your “usual rates” plus expenses for any time on the job. If the job goes well, you have established good contract terms, and there’s a possibility of another set of projects down the line, you can always arbitrarily reduce your fee by billing only a portion of hours, billing at a reduced rate, or absorbing some expenses into overhead.

3. The tricky area is when you’re attempting to acquire a prospective client. You DO NOT want to reduce your rates for that prospect, BUT you may want to conform to that prospect’s expectations for fees: lump sum includes certain services, percentage fees include all travel regardless of location, et cetera. If the first job isn’t profitable and the second job isn’t profitable, then you may want to re-evaluate the opportunity to work with that client. IT IS VERY EASY TO BE “TOO BUSY” TO ACCEPT WORK FROM NON-PROFITABLE CLIENTS.


Finally, one last bit of advice: take care of the people who take care of you. Don’t spend time on clients who don’t make sure you’re profitable, too. Sure, your profitability isn’t your client’s problem – except when your client gets a reputation for being difficult, they will find that their consulting fees climb, whether or not you’re their consultant.


Keith Erick Fix

Principal Engineer

Red Pepper Consulting, Inc.


10201 W. Markham Street

Suite 215

Little Rock, AR 72205


+1 (501) 227 7183 office

+1 (501) 350 3629 mobile

+1 (501) 319 7319 fax


From: Dilip Patel []
Sent: Tuesday, September 27, 2011 12:34 PM
To: seaint
Subject: Billing Rates


I have a client who has several sites which need engineering evaluations, reports, details etc.

One site was within an hour from office & another about 4 hours travel by car one way.

Can I bill the client for travel time for a distant site as Engineering rate of $120/hr or should be it be different rate?

I would appreaciate input from a small owner/engineer firm.



Dilip Patel, PE