Currently I am charging $100 an hour for consulting work in Orange County, CA. In a few months I will move to San Diego, CA and will have to travel about 80 miles to see clients in Orange County. Do I keep charging $100 an hour or do I increase it slightly because of travel and gas?
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how many miles to the gal. does your vehicle get? If you get 20 miles to the gal it will take you 4 gal of gas to reach your destination. Multiply that 4 gals by the price per gallon you are paying. Now x that by 2 (round trip). Then figure how long it will take you to make the round trip.
Subtract from from your days earnings, gas, time to go to and from , and your meals. You can also figure wear and tear on your vehicle if you want. Take that number and divide it by the number of hrs you were with the client. That should give you a pretty close figure on what you are actually charging your client.
I think you should remain at $100 because it is not existing clients fault that you have moved away.
First, are you under contract with the people/companies for whom you perform consulting services? If so, what does/do your contract(s) provide regarding fee increases. If the contracts preclude you from increasing your fees then there is nothing you can do unless, you want to re-negotiate your contracts.
Second,do you charge for the time you spend driving? If so, your consultation fee will increase by at least $200, and maybe as much as $500, since it will probably take you at least 2 hours, but probably more, to drive back and forth. How do you think your clients will react to paying this additional fee?
If you do not charge for the time you spend driving, you may want to consider charging for mileage. Most companies reimburse mileage at between $.35 and $.485 per mile so this gives you a starting point. Check around and see what the common practice in your area is. Again, how do you think your clients would react to an increase of between $56 and $77.60? Probably not an unreasonable increase; however, do not forget to review your contracts before making any changes.
If you are not paid for you mileage, you can deduct it on your tax returns.
Mileage is a business expense that can be deducted on your income tax return. You can deduct 48.5 cents per mile for business. If you drive 80 miles total per day that is $38.80 you can deduct. If you increase your consulting fee, do it because you are not being paid what you should compared to others in your field. Gas prices will go up and (barely) down. Research how much others charge for your type of work.
If you choose to move 80 miles away and still service clients where you currently are, then yes you could charge more per hour but you’ll risk losing your current clients. I know that I wouldn’t be happy about it and possibly would look for another consultant who is local. I would eat the extra cost as overhead for now until the end of your fiscal year. Then consider re-evaluating your hourly rate and send out a letter to all of your clients informing them of the increase in your hourly rate. Increasing hourly rates every year or two is normal for consultants, cpas, attorneys, etc.
Otherwise, try to be more efficient in your work. Is it possible to utilize more technology to do your work? Can you use web conferences, etc. and less face-to-face meetings?