Establishing fees for Safety Consulting services 

This article describes one method for establishing fees for your safety consulting services.  It's sometimes referred to as the "1,000 rule."

Here's how it works:

Determine the overall amount you need to earn in a year and divide that amount by 1,000.  The result is the amount you should charge per billable hour for your services.   So if you need to earn $75,000 this year, you should be charging $75 per hour for your services.  Note this is a rule of thumb only.  

Before we explain how this works, let's first establish what is meant by "billable hours."  There are tasks you perform as a safety consultant (explained further below) that aren't performed for any particular safety client.  Since you aren't working for any client, this time isn't billable.  For example, you may need to visit the local office supply store to purchase office supplies for your general office functions.  This time is non-billable.

Billable hours is the time you spend on actual activities for a client - inspecting the premises, delivering training classes, writing reports and letters for the client, etc.

Now, let's discuss where the number 1,000 is obtained.

There are 52 weeks in a year.  Assume you're going to take 2 weeks off per year for vacation and that leaves 50 weeks.  A typical work week has 40 work hours.  Multiply 50 weeks times 40 hours per week and you have 2,000 work hours available over the course of a year.

The "1,000 rule" assume you'll be able to work about half of those 2,000 hours as billable hours.  Half of 2,000 is 1,000 thus the name "1,000 rule."

Why might you be able to bill only 1,000 of 2,000 available work hours?

You'll spend some time on marketing and advertising your business.

You'll spend time on visiting the office supply store, the post office, the bank and other routine business tasks.

You'll spend time on personal tasks such as getting your car serviced, dentist appointments, etc.

You'll likely be ill and unable to work some days during the year.

You'll start some days late and end others early.

You'll spend time on your own professional development - reading newsletters and other publications, attending training seminars, etc. 

The 1,000 rule assumes about half of your available 2,000 hours will be on these and other non-billable type activities.

Of course you should remember this a rule-of-thumb.  The actual experiences of each person will vary.  And you can alter things by working more than 40 hours per week, being more efficient and billing more than 1,000 hours during a year, etc.

Use this information as a guide when establishing or revising your billing fee structure.