I can forsee occasions where, as designer of a building, I’ll be asked for on-site consultation by builder or owner. And probably sooner, rather than later. A typical case with domes is that the designer will be the one to layout the openings he includes in a design, because they are often an irregular shape, the dome is a compound curve, and the builder would rather the designer take the responsibility for getting the shape right (or the designer would egotistically choose to believe only he can mark them out correctly <G>–I’ve heard of both and seen the one).
Regardless of the reason, I’m working on the generic services contract and trying to figure out fees for travel. I got the on-site hourly rate ok, but what about on travel days? Reasonable T&L expenses of course (coach and any hotel that doesn’t rent by the hour), but what about per diem, or hourly/daily rate for the time required to travel? This could be the day it takes to drive/fly to FL or however long it takes to get to Maui and back. Don’t know what’s normal/fair practice, or even if those two are the same.
Any other suggestions?
Thanks.
Replies
As with remodeling or building, any time spent towards that "project" should be charged for, otherwise you would obviusly be doing something else, either for personal or business reasons, in which case you time is still worth money. And that includes any "reasonable" expenses incurred while expending/allocating, time to that project.
I like to refer to Time with a capital "T", since that reminds us that Time represents a portion of our life, and since life is finite whose length is unknown, it is the most precious asset and "gift" each of us own. Do not diminish it's value, as many do.
As with the capital 'T' for Time, we shopuld use a capital 'M' for Money, since it is recieved in exchange for a percentage of that valuable asset - our life and the knowledge acquired in the course of managing it.
Excellence is its own reward!
Thanks for the reply. So if you had to travel and the point-to-point travel took 13 hours out of one day, would you charge 13 x hourly rate, or have a max daily rate equating to 8 hrs, or...? What if travel took 4 hrs but there was no time to work at the site that day (for example, Sunday travel)? Charge 4 and lose the hours of the day that can't go towards anything else?
(In my corporate bkg, you got a salary and often travelled eve or weekends and that was just part of the deal. In the company I owned, travel was whenever you could squeeze it in and you just worked to sell as much product as possible--no one specific to pass charges along to. This is a new model for me.)
Use the term, "reasonable." Here's an example. I have a consulting project in Tampa, which is about 2.5 hours from my home. The meeting is to take place at 8 AM. It's not "reasonable" for my client to expect me to arise at 4 AM and leave home at 5 AM to be there at the 8 AM appointed time. So, I leave home after dinner the night before, check in at a local motel, arise at 6.45 AM and AM there at 8 AM.
I charge them for 2.5 hours for travel time, the motel cost, plus breakfast, and the 2.5 hours to drive back home after the meeting, which stops at 5PM.
If instead the client's office was in Atlanta, about a 12 hr. drive from here, I would fly, and charge them for the time to drive the 45 minutes to the airport, time for the flight, and taxi time to the their office. Any costs incurred from my home to their office are "reasonable" expenses because had I not taken their project, I'd still be at my home office and incurring no additional or unusual expenses.
Understand that in "consulting" , any time spent that can directly be charged to a project, "is done so." That time is not routinely charged to the consultants business's "overhead", as is routinely done in the construction industry with regards to giving our free Proposals, and the time it takes to assemble al of the information needed to create that same Proposal.
There are several excellent books regarding Consulting. Mine are currenlty loaned out to another contractor so I can't give you an ISBNs. Son-of-a-gun! While searching books on Amazon using the terms: "Consulting Fees", of the three that showed up, I own the first two, which are excellent. You might also want to think in terms of relating what's stated to what we do for cleints in remodeling and/or new construction. The URL is below.
http://www.amazon.com/exec/obidos/search-handle-form/103-3489770-4006260
BTW, the same fees would apply if you were being hired as an expert witness for a court case. And again, because you are being hired on a "consulting" basis.
Here's what's stated in the flap of the cover of the first book:
"Value-Based Fees : How to Charge And Get What You're Worth: Powerful Techniques for the Successful Practitioner"
"Consulting fees, says Alan Weiss, are actually dependent on only two things: value provided in the perception of the buyer, and the intent of the buyer and the consultant to do the right thing - to act ethically. Unfortunately, many consultants fail to understand that perceived value is the basis of the fee, or that they must translate the importance of their advice into long-term gains for the client in the client's perception. Still others fail to have the courage and belief system that support the high value delivered to clients, thereby reducing fees to a level commensurate with the consultant's own low self-esteem. Ultimately, says Weiss, consultants, not clients, are the main cause of low consulting fees."
I think it's critical to remember the above paragraph. It's the nemesis of many contractors. In fact, if you substitute the word "consultant" with the word "contractor", you wil be able to understand the truth in that paragraph.
Edited 6/2/2002 8:56:52 PM ET by Sonny Lykos
Thanks again.
Extending that reasoning, when you're consulting, is there any travel time that doesn't get charged? Is it different or the same as when you are contracting at hourly rate (assuming you do)? The five minute commute to a nearby client? Thirty minutes? More?
I know how my atty would handle it <G>, but the contractors I know are all over the board, as you are undoubtedly aware. Some never charge for the commute. Some only if over 30 min. Some charge one-way only. Gets confusing.
My bkg is salaried, where the commute is your own stinkin' problem, so switching to a "charge it" model takes adjustment.
I would not charge for a 5-10 minute drive to a client's office or the court house when acting as an expert witness, nor do I charge for the initial meeting, like when we act as a contractor and go on the 1st sales meeting. It's just meet each other and interview each other to see if we "fit", and get the general "scope" of the antipated project. I neither want to bleed them for every dime I can get, nor give that impression. Some do, though. As far as travel time, I'd use 10 -15 minutes as the break off point of when the Time clock starts ticking away.
While you're on this subject, consider just what a consultant does for a living:
1. Meets with a client.
2. Ascertains the client’s desires and/or problem needing to be solved.
3. Gathers information directly from the client in person, and/or other’s as well within company. That takes time.
4. Uses his/her experience and talents to then suggest a route (sometimes more than one route) to satisfy the client’s needs and/or desires. I include the term “talents†as well, because experience alone is worthless unless those experiences are “interpreted†in a manner to be exploited and used positively in future situations. So, experience and talents are two distinct “assets.†Prior to making a suggestion for satisfying the client, the consultant interprets all existing conditions, make evaluations including future ramifications of the implementation of his/her recommendation, more time involved.
5. In some cases, the consultant is asked - as a separate contract - to work with the parties involved (as in “manageâ€) to actually implement the recommendation, and coordinate all of phases involved. The benefit is that arrangement is it allows the consultant to make minor changes during the process, since he/she is the person who envisioned and knows the desired end result.
Now ask yourself these questions:
1. What commonalities exist between the consultant and contractors?
2. What does the consultant have to sell as compared to what we, as contractors, have to sell?
3. What is it that we do different from the consultant as far as the use of “technical†or “management†skills?
4. Of the top 5 items I listed above, for which do consultants charge a fee? For which do contractors charge a fee?
I think you'll arrive at the realization that a Consultancy is far more lucrative because what the client is charged for as far as Time, is expected by the client.
Good luck to you.
http://www.business.gov/busadv/maincat.cfm?catid=194
http://www.business.gov/busadv/frame.cfm?urltest=http://www.govexec.com/travel/&catid=194&urlplace=maincat.cfm
Cloud,
Couple of things to think about. Are you selling your sevices Cost+ or T&M or fixed price?
Ralph gave you some info on per diem rates, they look like they are out of the JTR (see my second URL). The JTR does not allow you to live high on the hog but for the most part are reasonable (don't expect to stay at a 5star on them) Lodging and Meal & incidental are separated. Lodging can be seasonal. You might want to talk to your accountant as to what the IRS allows.
People don't get paid to get to work. You work at home so you are starting from work all the time.
you're a business, on the other hand in a lot of businesses that require travel they expect you to travel on your "own" time. This isn't always fair to the empoyee. Consider charging on a 8 hr day. (10 hours travel on one day get charged 8 hours). Consider travel as normally being during business hours (yes not always possible) On a fixed price pkg you have to estimate the costs on the cost+ or T&M you are dealing more with "actuals".
Also consider the phsycology of pricing. Who are you dealing with? Individuals or businesses? Businesses sometimes "understand" expenses bettter than individuals. So you have to "package" the costs in a palatible manner (they'll want to buy)
I made an edit because I realizes it implied something that was not accurate.
bobl Volo Non Voleo Joe's cheat sheet
Edited 6/3/2002 9:56:05 AM ET by bobl
Looks like you've gotten some good advice - Don't think I could improve on what the other guys have said.
My only thought to add was to say make sure the client knows ahead of time. People don't like surprises when it comes to geting bills in the mail............./-:
If I melt dry ice, can I take a bath without getting wet?
This is all for forming contract language so that there aren't surprises. Trying to cover the eventualities that I can anticipate. Then I'll act consistent with the contract. Mostly the design fee is /sf (rather than % of construction cost). Things like trips can't be reflected in that and have to be addressed separately. Most residential projects won't request site visits (unless they're close-by projects) be/c of the costs, but wanna be covered for the occasional one that does want it. Anything commercial--don't yet know what they want.
Thanks for the discussion.