In this case, simply triple the salary you expect and divide it by the number of working days in the year to get a daily rate. It could be argued that there are only two (fixed and variable fees), however, the different types of fees described here require more attention than the simple fixed or variable fees. They are a combination of the way in which rates are packaged and the scenarios in which they are implemented. It's a lot to take in, which is why many consultants don't go beyond Time & Materials.
But before we get into the different types of rates, let me explain this model a little first. The next step is the fixed rate approach. However, there are two variants of the fixed rate depending on your earnings model. It's important to understand each of them, as there are some important differences.
This model is one step further than the T& M and is the most frequently applied type of fixed rate. With this pricing model, you estimate how much time and effort a project will require and then apply your profit margin to offer the customer a single, fixed rate. Since I founded my own consulting company, I have never used fees of 26 million dollars, but rather I have preferred to use fixed fees (the most cost), since they are the easiest form of fixed fees and are well adapted to the strategic commitments I make. Fixed fees are preferred to those of your company and the most preferred by customers.
If you can get a value-based commission, you'll get the most profit. But if not, happily focus on one cost plus a fixed fee. Just be sure to increase your profit margin in light of the efficiency you generate as the team gains more skills. While T&M offers the greatest simplicity, it doesn't create the best foundation on which to grow a successful consulting business.
In fact, value-based fees are trading tips that appear in just about every book you can buy on how to run a successful consulting firm.
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