Years before I started my grant writing consulting business, I attended a seminar taught by William Mooney on How to Start Your Own Consulting Business. Although I don't remember much from that day, I do remember that Mr. Mooney taught me how to figure out the price of my services as a consultant. His guidance has made a huge difference in my life and allowed me to become one of the consultants who lasted and prospered in this business. What did Mr. Mooney teach?
I think his theory is that most consultants don't last in the business because they underprice themselves. In addition, I think he thought that they underpriced themselves because they did not think they were worth the prices it took for them to stay in business. Accordingly, he taught that it was important to base your hourly rate on the following factors:
1. The normal salary or wages you receive prior to consulting including your retirement, health and benefit package.
2. Add on the costs necessary for running your business including your supplies, marketing, accounting, travel, meals, and so on.
3. Add on a 10% margin of profit so that you receive a reward for your investment of time and expenses.
For everyone, this formula means that as a consultant you will charge much more per hour than what you got as a salary at your last place of full-time employment. (In addition to Mooney's guidelines, I also like the idea of raising your rates every year to keep up with inflation, and the idea of creating multiple products so that you are not simply dependent on selling your time as a consultant.)
Sadly, Mr. Mooney passed away on February 19, 2009. He is survived by his wife of 58 years, Margery, his sons William, Robert and Donald, their wives, Karen, Jeannie and Samantha and his five grandchildren, Tyrrell, Kristen, Tessa, Kyle and Morgan.
In one of those odd twists of fate, I'm honored that I got a chance to thank him - by email - for everything he taught me just a few weeks before he passed away. I'll always be grateful he taught me to operate my consulting practice as a business, a business that deserved to make a profit.