Hourly rates of your competitors are good to know. In order to put together a competitive hourly rate you should be familiar with what other IT consultants are charging.  This means knows what both IT consultants in the low-margin sector are charging, as well as the hourly rates of those consultants that are targeting the same sweet spot clients as you.

This first half of our discussion will focus on the finding hourly rate of the IT consultants you don’t necessarily want to compete with.  The consultants who charge really low rates, attract price sensitive clients, and leave themselves no margin to take time to focus on business development issues.  

Hourly rates of low margin/high volume IT Consultants
The reason you need to this group’s hourly rate is not because you want to emulate it, but because you want to distance yourself from it.  If you set your hourly rate in this range then, advertently or not, you are positioning yourself as their competitors.  You will low ball yourself out of being able to attract the sweet clients you want.

To find out the hourly rates of this group:

  • Go to Web sites (Try Googling your city, state, province, etc… and type in something like Redmond, Washington network consultants or Austin, Texas PC repair)
  • Look around in consumer-focused advertising  - fliers, leaflets, coupon packs, newspaper display ads, etc…
These hourly rates will tell you what your market’s definition of being way, way, way too cheap is.  You don’t want to be anywhere near these providers because their clients are extremely price-sensitive and that’s not where your biggest opportunities are.

The Bottom Line on Hourly Rates
Finding out the hourly rates that your competitors are charging is important.  You need to know the range where your hourly rate should and should not be set. You don’t want to set an hourly rate that competes with low margin competitors because you’ll end up attracting highly price sensitive clients - you don’t want that.  

In this article, you’ve been introduced to hourly rates. To learn more about how you can improve your knowledge of hourly rates, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.