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Hourly rate for a contractor? Am I not charging enough?  

 

Ken
Active Colleague Registered
Joined: 9 months ago
Posts: 5
July 18, 2019 7:01 pm  

I've been working as a contractor for the past year or so helping companies develop their preclinical packages for movement into clinical trials.  Largely, my contracts have come from companies interested in hiring me full time for these positions, but because of my current situation starting up my own company, I can't take a full time job.

The companies tend to leave the dollar per hour amount blank and expect me to fill it in.  The first contract I got had an assigned amount, and I've just gone with that number ever since. 

That number works out to an annualized amount that's about twice what my previous salary as in a similar capacity (though obviously with no benefits or anything on top).  That seemed like a pretty good deal for me! 

Since then, using that number, the other companies have just accepted that number with no push back.  Which makes me think that either I have the right number, or maybe I'm short changing myself.  I have another larger contract I'm signing now, so wanted to figure out if I should be asking for more.  But, I have no idea how to figure out what an appropriate hourly rate is.  Is there any guideline anywhere?


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PG
Reputable Colleague Registered
Joined: 9 months ago
Posts: 396
July 19, 2019 11:07 pm  

I dont know if there is any guidande documents but my guess be that at least there are no good ones. There are just too many variables such as field of work, expertise of the consultant, type of assignement etc.

 

As you say if your suggested price is directly accepted it indicates that at least the price isnt too high. Your next question should be if you can afford that one or more company says no thank you. They may just say No rather than try to negotiate the cost. If you can afford it both financially and for your reputation you van always try to suggest a slightly higher price.


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Dave Jensen
Prominent Maven Moderator
Joined: 9 months ago
Posts: 903
July 23, 2019 3:15 am  

Hi Ken,

I've got a handyman here locally who works on my house. Really talented guy. He enjoys working for us on occasion, and his rate always varies,. He has one rate for painting a garage door and another rate entirely for using his excellent plumbing or electrical skills to fix a more serious matter. He enjoys the work, all of it, but we go with his fluctuating rate because we really don't need to be paying him the Plumber hours if he's simply out there in the driveway slapping paint on a door. I can understand and appreciate that. 

So, is there a variable rate card that you can come up with, that shows the services you offer and perhaps there's day-to-day work that a company wants that doesn't demand as much specialized knowledge, but they want a good guy on the job and you can get a normal $1500-a-day rate that so many consultants charge. But then, a highly specialized knowledge that you could actually get twice that or more, perhaps utilizing contacts you've developed and that they have no access to? For example, maybe you've got some kind of regulatory knowledge and on one day you're engaged in helping their lab people set up the kind of testing protocols that company needs for an application (at a normal fee), but then the next day you're working directly with the agency (at a higher fee -- with people you know, people who would never be so kind and generous to a company without your involvement) and you can get more for that? That makes sense to me -- of course, I don't know your business model.

At my recruiting company, we'll occasionally take on "research only" work where we do the front end of the search and identify prospects but don't go after them. Our client may just want to know who the players are. And that doesn't cost that much -- or doesn't cost AS much as "live recruiting" where we are highly specialized and get the job done. 

Hope this is helpful.

Dave

This post was modified 2 months ago by Dave Jensen

Dave Jensen, Founder and Moderator
Bio Careers Forum


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Ken
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Joined: 9 months ago
Posts: 5
July 25, 2019 3:46 pm  

Well, the happy resolution was that I offered my standard rate to the new contract, and they made a counter offer.  At a higher rate than I asked for!  I guess companies have a vested interest in not underpaying.


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Dave Jensen
Prominent Maven Moderator
Joined: 9 months ago
Posts: 903
July 25, 2019 4:12 pm  

Ken, wow -- nice client!

I wish that our clients would do that!

Dave

Dave Jensen, Founder and Moderator
Bio Careers Forum


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