Welcome to today's Podcast, where we review part 3 on the topic of the business of being a consultant. Today’s episode features Lyle Gee, who joins Angela Roberts and Becky Clark for a valuable conversation about the realities and requirements of being a consultant.
How Do You Determine Your Rate?
One of the essential topics the team explores is how to accurately determine your compensation as a consultant. Angela discusses the importance of benchmarking rates using available market data and emphasizes the need to go beyond surface-level numbers. We address areas you should factor in such as the cost of health benefits, liability insurance, Social Security, tax obligations, and other overhead expenses. Angela shares that the true "burden rate" paid by employers often amounts to an additional 38 percent over your base salary. This figure covers expenses that employees rarely see but consultants must plan for themselves.
Lyle adds that this critical information is not always easy to obtain unless you consult an HR expert or a business owner. Both guests stress the importance of conducting meticulous expense calculations to determine the minimum hourly rate required to sustain your lifestyle and meet all obligations.
Other Financial Un-Knowns to Consider
What happens if, once you have done the math, your personal financial needs result in an hourly rate that exceeds the marketplace? We openly discuss your options.
In addition to financial planning, being a consultant means maintaining a buffer for periods without work. Other areas include separating business and personal finances, and preparing for unpredictable costs.
This honest discussion reveals that being a consultant demands preparation, transparency, and commitment. Listen in to become equipped with the key insights necessary for success as a consultant. Let us get started.
