Whether you are billing by the hour or attempting to maximize profitability by going with a fixed-fee proposal, time is money. Several factors could affect how long it will take to complete an engagement.

External consultants have to decide how they're going to bill their clients. There are only two options: fixed fee or hourly.

One of the advantages of being an independent IT consultant is that you can deduct expenses. This doesn't make purchases free, it just means you don't have to pay income tax on the amount of income equivalent to the expenses. In effect, this means that everything that you buy that is a valid expense is essentially purchased at a 30% (approx.) discount.

Figuring out the rate to charge clients can be tricky. Obviously you want to be paid as much as possible and your clients want to pay as little as possible. In the middle is some rate that you'll both deem as fair. But what's fair?

If you are responsible for selling "consulting", it's important to recognize that you can be a vendor of consulting or you can consultatively sell consulting services. That's quite a mouthful.

Typically, a consultant gets business by establishing relationships with people who have recognized a need, perceive the value in addressing their need, and are therefore willing to pay a consultant for help. The difficult part is in finding these people. In an ideal world, your consulting business would grow through having a good reputation and receiving referrals. Clients would immediately recognize your capability and invite you to submit a proposal.

Here's a story about an IT consultant that got himself in a jam and his client wouldn't pay...