Engineering Contract Rates. What to charge clients.

on-ramp · 12-26-2006, 07:25 AM

I have several clients that I do consulting for and I'm looking to "adjust" my contract rate for 2007.

I mostly do engineering/CAD design using Solidworks. I hold 6 patents with over 10 years experience in the medical device field. I currently charge $50/hr.

I've tried to do some research on this but it's difficult to get any data.

Any advice would help. thanks.

Tim Hancock · 07:57 AM

What kind of stuff are you designing? $50 sounds low to me, the special machine design and build company I work for figures about $65/hr when quoting design and build jobs for the engineering portion. I am assuming it is just side work for you. If that is the case, I guess you just have to decide on how much your free time is worth to you.

Here in the relatively low priced midwest, I am at $55/hr for my side business working on airplanes, but I will soon bump to $60. (Local airports are more like $70-$90 per hour)

I just remembered that last fall I quoted a friend $65/hr to do some design work for some custom machinery and he stated the company he works for has paid similar rates for prior design work they had sub-contracted out. The company he works for manufactures several products from plastic.

Not exactly apples to apples, but maybe it might help.

on-ramp · 12-26-2006, 07:42 AM

I currently work on several projects, including desiging sheet metal and thermoformed components, as well as injected molded parts, for ovens, semiconductor equipment, some toys, and a few other novelty products. I live in the northeast, MA.

red-beard · red-beard's Garage

I think $50/hr is low. Go to the ASME website and look at the contract rates.

on-ramp · 12-26-2006, 07:52 AM

Quote:

Originally posted by red-beard
I think $50/hr is low. Go to the ASME website and look at the contract rates.

are you sure they have contact rates? I've been clicking around their site for 15 minutes and can't find anything. thanks,

island911 · 12-26-2006, 10:15 AM

geeze, a person can't even get a Honda lawnmower repaired for $50/hr.

From what I've seen 50 would be for someone with not much to add beyond turning the SWx crank. THe one's who add project management and/or design value (ID, engineering, manufacturing, marketing) and have their own spendy software and equipment are pulling in 75-95/hr. The design firms (who have even more resources) are . ..far above that.

But for liberal designers.. . they really shouldn't be paid anymore than what is needed for subsistance. Afterall, anything beyond subsistance would just be taking too much, and raping the planet.

Seriously, tho', I hope others will chime in here too.

on-ramp · 12-26-2006, 04:55 PM

i thought I'd bump this to get more info....

MFAFF · 12-26-2006, 10:52 PM

With your experience and knowledge you are really not doing yourself justice on that rate...

I would imagine that the rate should reflect your ability and knowledge....

If I try to bring an equally experienced/ knowledgeable person in my field as a reference; the hourly rate is more than double...admittely its in London so there's a 30% premium (overheads etc) but I would suggest that going to the range of $70-$80 would be justifiable...provided you make sure people are aware of the unique skills/ability/ creative vision that YOU have..and that nobody on a $50 rate would have...

It that aspect that can ensure you have less hours but at a better rate to deliver a higher 'quality' of deliverable...it may mena an initial dip in overall income, but if you can deliver in the long term you will get better work with an income to match.

What you have to be prepared to do however is have a rational breakdown of that hourly rate...so explain how much is your 'salary', your overheads...and an 'indication' of profit etc...this helps for those Clients who know cent by their Christian name and find it very difficult to part with each and every one..

David · David's Garage

I've never paid less than $100/hr for engineering consulting. It's usually in the $200/hr range in the utility industry.

Porsche-O-Phile · Porsche-O-Phile's Garage

$50 an hour is way low - even for basic CAD-tech stuff.

TerryBPP · 12-27-2006, 07:50 AM

Although I mostly bill out on based on a total project cost, I sometimes bill out on a hourly basis if the client is just researching. $100/hr for basic CAD work, $250 for PE involved design/due dilligence. Although this is company operating cost, not just the man hours.

Keep in mind this is Civil work and very basic. I would imagine your are under paying yourself by atleast $100 an hour. But not knowing your specific market its hard to advise.

MotoSook · 08:44 AM

$50/hr is low if you are engineering and drafting.

If you're just drafting with no design or engineering input, then $50/hr is not terrible, it could be higher (especially in today's market).

If you are engineering, designing and drafting, then your clients are getting a hell of a deal. And if you are managing on top of that, then you are losing money.

If you don't have a Rate Schedule with tasks broken out and hourly rates assigned to those tasks, then you need to do it now. The contract you give to your client should describe those tasks and include a table of the billing rate for each task. Your client will appreciate you not charging them the engineering rate for drafting work, while you won't be managing a project for the engineering rate or the drafting rate.

Everything depends on the industry, competition and labor availability. You should know your market and adjust your rates accordingly. As they say....in consulting...it is either feast or famine. You have to know when to cut your rates to get the job or when to increase it so that you are not the guy being paid 20% less than the contractor in the next cubicle.