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How to charge for Spreadsheet Modelling?

tarynmahon

tarynmahon

Member
I have just started up on my own in Bookkeeping/Spreadsheet Modelling and have my first client who just wants me to reformat his 4 year cash flow forecast, he's got all the figures he just doesn't like the format that the person that created it did it in, Obviously it depends on his requirements but I don't think it's going to be a big job but I'm wondering how to price the work, charge per hour or a fixed fee? Also I have no idea how much I would charge for this as I have never done freelance financial modelling before, I've only done it as part of my job being employed as a Management Accountant, any advice will be great thank you, I am based in the UK.
 
If you have started your own business without understanding how to charge then you are in BIG trouble.

If you know the answer and how long it will take you to implement it then go with a fixed, this is the preferred method of most clients, but realise a fixed price on a job that goes wrong will but you out of business.

An hourly rate is better for you but not your client, they will think that the job is being stretched out for your benefit and not theirs.

If it is a big job or one that contains unknown’s then split the price into selections with payment on the completion of a section with the final amount paid on completion.

You MUST get the wording of the contract/quote absolutely right or you are onto a Gold plated looser of a business.
 
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Congratulations on your first job @tarynmahon

When I got my first consulting project, I was not sure how much to charge either. So I reached out to my mentor (Jon Peltier) who gave me some valuable advice. Since I had a full time job (and was doing consulting project mainly to enhance my skills), I charged $30 (US) per hour. I billed the client for about 8 hours. It was a big chunk of money for me (remember, I live in India, where $30 can pay for rent if you live modestly.) This was back in late 2008.

Later I went to $50 per hour (in 2009), $75 per hour in 2010 and $100 per hour in 2011. Finally, when I stopped doing any consulting work in late 2012, I was charging $150.

My suggestion is to go with hourly rate if you are not sure how long the work takes. Make sure you communicate with the client often and warn them about potential extra billing early on. This will help you gain their trust and award you more projects.

Also, give them an estimated number of hours / cost as soon as possible. This way even though you are working per hour, they will believe that they are on fixed price.

To give you a rough ball park, most Excel consultants (MVPs, seasoned pros) charge between $150-$300 per hour for development work.

Once you gain some experience and trust, I suggest going for fixed price projects. This will let you build and deliver models based on how much they think the model is worth rather than how much they think your time is worth. And believe me, a model that takes 8 hours to build can save any meaningful client at least 80 hours of time.
 
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