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Thread: Self-employed planners: How much to charge clients?

  1. #1

    Self-employed planners: How much to charge clients?

    Can anyone give me some info on what kinds of charges planners charge to consult? I will be graduating (M.U.P) this year and have always wanted to get into my own business. Can anyone help?

  2. #2
    Dec 2006
    Quote Originally posted by milleon View post
    Can anyone give me some info on what kinds of charges planners charge to consult? I will be graduating (M.U.P) this year and have always wanted to get into my own business. Can anyone help?
    Production Costs: amount needed to produce a deliverable, whether it be a presentation board, comprehensive plan, inlcuding multiple copies to be reviewed by a plan commission, construction documents, letters, memos, reports, plot costs, etc.
    Transportation Costs: meetings, site visits, etc.
    Mailing Costs: shipping and handling
    Meetings: the number of meetings are usually established before the contract is signed. However, additional meetings may be added at a later date. Sometimes, these extra meetings may eat up into the established budget, taking billable hours away from other tasks. Some contracts are more flexible and allow additional money for additional tasks to be added at a later date.
    Communication: phone calls, e-mails,etc. As a consultant, I typically don't bill anything less than 15 minutes. Phone calls and e-mails may be directly with the client, the developer for the client, a subconsultant, a resident, or someone else, etc. All faxes are typically billed. I am currently writing e-mail surveys for 2 open space master plans and will be tabulating all the results when they come in.
    Expert Witness: testimony/depositions only. All other costs incurred "off the stand" (production, research, transportation, etc.) will be the same rate as above (see next paragraph).

    The firm sends out a memo to each existing client each December outlining the billable rates for all staff for the upcoming fiscal year, which starts in January at my firm. Typically we have several different pay scales depending on the client: public sector (cheapest), developer, and transportation projects, usually determined for us by DOT. Billable rates for expert witness (testimony/depositions only) are typically the highest rates, often 2X larger than the other pay scales.

    There are also non-billable costs incurred which can't be charged to a client. These include hours spent over the budget (keep these to a minimum), bid preparation (in respone to RFPs), marketing materials (cut-sheets, website design, advertising, trade shows), professional involvement (through state or national APA), certification/licensure exams and ongoing management (AICP, LEED-AP, etc.), technology (computers, printers, plotters, scanners, projectors, internet connection, IT support, software +updates, software training for workers). Consultants cough these up to promote and operate the business.

    As a consultant you will also need to provide your own liability insurance. You should also put together a business plan and obtain a business license. You may need to seek financing through a lending institution to help get your business off the ground, which will be harder in this economy. To reduce overhead, you may need to do your own bookkeeping until you can either contract that work out or hire a CFO.

    Just curious, why do you want to start your firm now fresh out of grad school? Do you have enough money in reserves? I "think" Cardinal said to have enough money in reserves (6 months?), enough contracts to keep you working for 6 months, and 1/3 of the contracts that will bring in more work after that. Unless you have a bunch of contracts lined up, I would look to work for a few years to build up your portfolio, references, and contacts. I, too, would like to run my own company. You should also consider buying into an established firm. This will require you to put equity into the firm to become vested. In some firms, all owners have an equal share of the business. In other firms, one or two owners will have a controlling share. In international firms that are publicy traded (IPOs) I assume the CEOs have preferred or restricted stock in the firm.
    Hope this helps-
    Last edited by nrschmid; 21 Dec 2008 at 9:30 AM.

  3. #3
    Thank you. You are right a business fresh out of grad school would be crazy, but working on a business plan (including logistics) is what I am really doing. So I am doing all my homework and stuff now.

  4. #4
    Cyburbian Cardinal's avatar
    Aug 2001
    The Cheese State
    I would advise having enough money to get you through a minimum of 18 months. In reality, this will be enough to last a year.
    Anyone want to adopt a dog?

  5. #5
    Unfrozen Caveman Planner mendelman's avatar
    May 2003
    Staff meeting
    And more fundamentally - Do you really have enough experience (you will be freshly minted) to even be of any interest to potential clients?

    I know that may sound harsh, but there were very few (like 2) fellow students in my MUP program that could have possibly done what you will being trying to do. But one had a BS.Arch and was dual degree M.Arch/MUP and the other had been working consulting for a number of years.

    Good Luck!
    I'm sorry. Is my bias showing?

    The ends can justify the means.

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