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consulting fees guide

Consulting Fees Guide: How Much To Charge For Consulting (3 Formulas & Examples)

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What should you charge for your consulting fees?

How can you raise your consulting rates — and get clients to accept higher fees?

Whether you’re a new consultant or you’ve been in the game for years, pricing your consulting services is one of the most challenging aspects.

After spending over 2 decades helping consultants raise their fees by 30%-400%+, we’ve got the data on what works — and what doesn’t.

This guide will not only help you figure out how much to charge for your consulting services…

…it will help you raise your fees (if you want to).

Let’s dive into our first consulting fee formula, which is an easy option for beginners.

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The Hourly Method

The Hourly Formula is when you charge by the hour for your consulting services.

You set an hourly rate, track your hours, and then bill your client by the hour.

This simple, easy method is great for beginners who are working on their first few consulting projects.

However, if you’ve developed deep expertise in your field, we recommend you DON’T use the hourly billing method.

So, how do you actually come up with your hourly price?

The Hourly Method Formula For Setting Your Hourly Rate

Step 1. Open up Google and search for the average salary for your position. Write that number down.

Example: “senior marketing manager average salary” = $98K.

Step 2. Enter the average salary in a salary to hourly converter.

For work hours per week, enter “20.”

As a beginner consultant, you’re typically not working 40-hour weeks.

You’ll spend just as much time winning projects as you do delivering them.

For work weeks per year, enter “48” (or however many weeks you want to work, subtracting the number of weeks you want to take off).

(You can also use our Consulting Fees Calculator if you have a target income in mind)

consulting fees calculator

Step 3. Round your new hourly rate up or down in $25 dollar increments.

Example: A salary of $98,000 equates to a monthly pay of $8167, weekly pay of $2042, and an hourly wage of $102.

$102 = $100 per hour.

This is your starting hourly fee.

If you feel like it is too low, raise it. But don’t lower your fee.

Consultants are notorious for undercharging — especially when they charge by the hour.

Every time you successfully complete a project, increase your hourly rate by $25.

Eventually, you’ll get to the point where charging by the hour is no longer the best method for you or your clients.

The Project-Based Method

One of the issues with the hourly method is that your client feels uncertainty around how much they’ll end up paying you. And uncertainty around a project will stop your client from moving forward.

Using the project-based method will eliminate this uncertainty.

The project-based method is a strong pricing method for beginner and intermediate consultants. It’s a bit more complex than the hourly method. But it removes a lot of the uncertainty around hourly billing. Your client knows what they pay upfront.

projected based consulting fee method

Here’s how you set your consulting fees using the project-based method.

The Project-Based Formula For Setting Your Consulting Fees

Step 1: Create a list of deliverables for the project.

Think about everything your client gets as a result of this project — the “inputs.”

Example: Branding Consulting Project

  • Design themes research
  • Competing design analysis
  • Presentation of results
  • 4 logo options
  • 1 design theme applied to business card and print materials
  • Complete website redesign with new brand identity
  • Application of new identity to 3 web ads and 3 print ads

Step 2: Estimate how long each deliverable will take.

This is where your past experience comes into play.

Use an app like Toggl to track your time spent on each deliverable. If you don’t know the exact number, estimate. Add an extra hour or two just to be on the safe side.

Example:

  • Design themes research – 6 hours
  • Competing design analysis – 4 hours
  • Presentation of results – 3 hours
  • 4 logo options – 5 hours
  • 1 design theme applied to business card and print materials – 3 hours
  • Complete website redesign with new brand identity – 6 hours
  • Application of new identity to 3 web ads and 3 print ads -3 hours

Step 3: Add up all the hours, and times that by your hourly fee.

Example: 30 hours X $100 = $3000

Step 4: Times the total by 1.5.

Projects take longer than you think.

You also have to factor in your time spent marketing, making revisions, etc.

Example: $3000 X 1.5 = $4500 total for the project.

After you get the total, adjust the fee to a number you would feel good about work.

If you don’t feel like you are being compensated fairly for the value you’re providing, you won’t do your best work.

If you are a more experienced consultant with 2-5+ years of experience, we recommend switching to a higher-leverage pricing model like value-based pricing.

The Value-Based Method

Value-based pricing is when you price your services based on the tangible and intangible value you create for your client.

That means you’re not charging for your time. You’re not evening charging for your deliverables.

You are charging based on what your client cares about the most = the results and outcomes you’ll create for them.

Using the value-based method is just as much art as it is science.

You’ll have to improve your sales skills, accounting skills, project management skills, and more.

But there is no better method for raising your rates and creating more value.

Here’s how you set your consulting fees using the value-based method.

The Value-Based Method For Setting Your Consulting Fee

Step 1: Have the “Value Conversation” with your client.

The value conversation is where you ask questions to your client to uncover where they want to be — and agree on the value of a successful project.

Example: You’re a marketing consultant speaking with your prospect, Acme Financial Services.

During the value conversation, you learn that they want to win 3 new clients per month.

Each client is worth $500 per month to their business.

Step 2: Write The Intangible Value

Now you have some numbers to work with.

But before you start using those numbers, write the intangible value for the client.

The intangible value is the project’s emotional and subjective factors that influence the buyer’s decision.

Example: You ask the client “what would a successful outcome do for you personally?”

They tell you that they wouldn’t have to stress about payroll and could enjoy working on things they really enjoyed.

Safety, comfort, peace of mind, ego, and prestige are all examples of powerful intangible benefits.

If you get stuck on the next step calculating the tangible value, ask the client more about the intangible value. Tangible value is often hidden deeper in intangible value.

Example: Stressing about payroll takes up at least 1-hour of the CEO’s time. That’s hundreds of dollars per day wasted stressing.

Step 3: Calculate The Tangible Value

You know that each client is worth $500 per month to your prospect.

And they want to win 3 clients per month.

Now, you can calculate the tangible value.

The tangible value is the quantifiable value your offer provides.

For example, if you help Acme Financial Services win 3 new clients per month, you’ll help them generate:

  • $18K in monthly recurring revenue.
  • $117K in total revenue after a year.

Ask the prospect if $117K in revenue would mean the project was a success. They will agree because you are using their numbers.

Step 4: Use The ROI Formula

The ROI Formula: Intangible + Tangible + Annual = Value-Based Price

Intangible: Emotional and subjective factors that influence the buyer’s decision.

Safety, comfort, peace of mind, ego, and prestige are all examples of powerful intangible benefits.

For example, completing the project will make the CEO’s life much easier — she wants to focus more on running the business rather than stressing about payroll.

Tangible: The quantifiable value your offer provides.

For example, helping your client generate 3 clients per month will generate $18K in monthly recurring revenue.

Annual: The year-over-year (YOY) tangible benefits.

For example, if your service helps your client increase their revenue by 5% — and that will continue for 2+ years — you can factor the YOY growth into your price.

With every value-based price, you want to create a 3-10x ROI for your client. Remember, you are charging based on the ROI you will create.

For example, since the successful completion of your project would result in $117K in new revenue for your client, you can calculate different ROI levels.

  • 5% of $117K: $6K
  • 10% of $117K: $12K
  • 20% of $117K: $24K

You’ll use the numbers in the final step.

Step 5: Offer 3 Pricing Options

Give your client 3 options in your proposal, and allow them to choose their level of risk.

  • Option 1 – Lowest Price: The minimum service offering or features your buyer needs to reach a successful outcome.
  • Option 2 – Middle Price: All the services or features from Option 1, plus additional services that add more value — and increase the level of certainty.
  • Option 3- Highest Price: Imagine that your client had no budget, and wanted the result as fast as possible. Include everything from your low option, middle option, and added value if they are willing to invest significantly more.

Example: You’re ready to present your pricing options to your prospective client Acme Financial Services.

Option 3 – $24K

  • Brand positioning overhaul
  • Website messaging audit
  • Direct outreach sequence
  • Website marketing strategy
  • LinkedIn content + outreach plan
  • Search engine optimization
  • Lead-magnet development & implementation

Option 2 — $12K

  • Brand positioning overhaul
  • Website messaging audit
  • Direct outreach sequence
  • Website content strategy
  • LinkedIn content + outreach plan

Option 1 — $6000

  • Brand positioning overhaul
  • Website messaging audit
  • Direct outreach sequence

These prices aren’t random. They are based on the levels of ROI calculated in step 4.

Notice how we lead with Option 3, the highest-priced option.

This helps you leverage the anchoring bias: the first price they see determines how they perceived the rest of your prices.

Option 2 and Option 1 will look more attractive and affordable in comparison to Option 3.

Finally, it’s best if you present your 3 options over a call.

That way, you can answer objections if and when they come up.

Instead of “pitching” your client, you’re collaborating with the client on different ways to help them achieve their goals.

Value-based pricing will raise your consulting fees and provide more value to your clients.

But, as you can see, it takes an experienced consultant to make it work.

For an in-depth look at value-based pricing, take a look at our article: Guide to Value-Based Pricing for Consultants: 10 Experts Share Their Fee Strategies.

And if you’re looking for hands-on coaching to implement value-based pricing in your consulting business, check out our Clarity Coaching Program.

LEARN MORE ABOUT CLARITY COACHING

Consulting Fees Study (2023)

Do you feel stuck at lower rates while other consultants command premium consulting fees?

That ends today.

Our new survey reveals exactly what high-earning consultants are charging and how you can set fees confidently to amplify your revenue.

In this must-read report, you’ll discover the pricing secrets of the industry’s top earners.

Learn what consultants across every niche are charging per project, how they structure retainer deals, and what’s holding you back from earning more.

Arm yourself with previously undisclosed data on real-world consulting fees. Gain the knowledge, confidence, and proven strategies to raise your rates significantly. Stop leaving money on the table and start commanding the fees you deserve.

Keep reading to access these exclusive insights and take your income to new heights.

The first step to making your best year ever is within this report.

Before we dive in it’s important to note that none of this is financial or legal advice. We’ve summarized key takeaways from the almost 1000 consultants who participated in this survey.

Summary of Our Key Findings on Consulting Fees

We’ll get started with some of our key findings from this year’s study.

  1. 79% of consultants are actively looking to increase their fees.
  2. 39% of consultants have never tried value-based pricing because they don’t know how.
  3. Productized consulting services are becoming more popular — 44% of consultants offer a productized service. In our previous study, only 30% of consultants had a productized offer.
  4. 25% of consultants will lower their fees in order to win clients.
  5. 88% of consultants do not list their fees on their consulting website.
  6. 58% of consultants work with 6 or fewer clients per year.
  7. 38% of consultants are earning $10K+ per month.
  8. The #1 reason holding consultants back from raising their fees is fear of losing clients.
  9. Strategy consultants tend to have more retainer-based consulting income than management consultants. Twice as many strategy consultants have the majority of their income from retainer services over management consultants.
  10. Consultants who primarily use value-based pricing have a higher average project value than those who use hourly fees. 39% of consultants using hourly fees have an average project value of $10K+, whereas 51% of consultants using value-based fees have an average project value of $10K+.
  11. Consultants earning $45K+ per month have a much higher average consulting engagement value, with over 50% of them putting their average consulting engagement value at $50K+.
  12. Consultants who have specialist expertise in their industry command higher fees and earn more than consultants who aren’t specialized.

Past Consulting Fees Comparison

This is our 4th time doing the Consulting Fees study.

To see the past year’s results, click on one of the links below:

What’s changed over the past 4 years on the topic of consulting fees? Here are some of the trends we’re noticing based on the data.

  • More women are getting into entrepreneurial consulting. In 2019, the gender split of survey respondents was 75% male, 25% female. In 2023, the split was 61% male, 37% female.
  • Project-based rates remain the most used pricing model. In 2023, hourly fees are used more than value-based pricing, but in 2019, value-based pricing was more prominent.
  • At least a 1/3 of consultants have never used value pricing because they don’t know how to use it — and this has remained consistent over the years.
  • Management consulting and strategy consulting make up over 40% of survey respondents consistently over the years.
  • 4/5 of consultants are actively looking to increase their consulting fees — and this number has stayed consistent throughout the years.

Consulting Pricing Strategies

There are many different ways to price your various consulting offers.

We asked consultants about their pricing strategies. The results might surprise you.

How Consultants Set Their Fees

Here’s how consultants set their fees:

  • 30% used a project-based rate.
  • 29% use an hourly rate.
  • 16% use a monthly retainer.
  • 15% use value pricing.
  • 10% use a daily rate.

One of the highest ROI moves you can make is switching to value-based fees.

Here are some more interesting findings about this data:

  • Nearly 60% of consultants use a pricing strategy we DON’T recommend: project rate (based on hours) and hourly.
  • For consultants who are making $10K-$45K per month, they are more likely to use monthly retainers and value-based pricing than those making $2K-$5K per month.
  • Male consultants use daily rates and monthly retainers more than female consultants.

How Many Consultants Have Used Value-Based Pricing

Value pricing is a hot topic in the consulting world, and for good reason.

It’s one of the best ways for consultants to create leverage — and increase their earnings without working more.

However, it’s not an easy strategy to implement.

  • 39% of consultants have never used value pricing because they don’t know how.
  • 31% of consultants use value pricing on some of their projects.
  • 18% of consultants use value pricing on most of their projects.
  • 12% of consultants have never used value pricing because they are satisfied with their current pricing structure.

Here’s a more in-depth look at the data around value pricing:

  • For consultants whose average project is between $20K-$50K, 55% have used value pricing. For consultants whose average project is between $500-$2000, only 37% have tried value pricing.
  • Men and women use value pricing at virtually the same rate. 2% more men have tried it versus women.
  • Consultants who are specialists in their industry and make it known in their marketing are far more likely to use value pricing. 57% of them used value pricing versus only 29% of consultants who aren’t specialists.

How Many Consultants Do Performance Deals

Performance deals are when you are paid based on the performance and outcome you have created during the project. This is typically above an agreed-upon baseline.

EXAMPLE: Your client is currently making $100K per month. You help take them to $200K per month. With a performance deal, you’re charging a percentage based on the extra value you’re creating. So, if you and the client agree on 10% of the extra value, then you’d be earning $10K per month on the project — in addition to your base pay.

So, how many consultants use the pay-for-performance pricing strategy?

  • 58% of consultants do not use it, but are open to it.
  • 21% of consultants do not use it, and are not open to it.
  • 15% of consultants do use it, and it’s worked out well for both them and their client.
  • 6% of consultants have used it, but it didn’t work out very well.

Here’s a segment-based look at the data for performance deals:

  • Many more men have tried performance deals than women (25% versus 12%). However, for both genders, the majority have them have never tried a performance-based deal.
  • Consultants aren’t more likely to have done a performance deal if they’re 60 years old versus 30-40 years old.
  • Performance deals are much more popular in Asia, where 36% of consultants have tried them. That percentage is 15% in North America.

How Many Consultants Have Retainer-Based Work

One of the best ways to build more predictable revenue into your consulting business is to use monthly retainers.

With a monthly retainer, you’re working with (and billing) your client on a monthly basis. It’s recurring revenue.

Recurring revenue provides predictability and security. Why? Because you know how much revenue you have coming in each month.

Here’s the data on how many consultants use monthly retainers:

  • 41% of consultants don’t have any retainer-based clients but would like to.
  • 37% of consultants have some work that is retainer-based.
  • 17% of consultants said that the majority of their income is retainer-based.
  • 5% of consultants do not offer monthly retainers and aren’t interested in them.

Here’s how comparing segments provides more insight into consulting retainers:

  • Consultants with more retainer work tend to make more per month. 21% of consultants making $10K-$45K per month say that the majority of their work ins retainer-based compared -— a percentage twice as high compared to those making $2K-$5K per month.
  • Strategy consultants are more likely than management consultants to utilize monthly retainers.
  • Men are more likely than women to offer monthly retainers.
  • The older and more experienced the consultant, the more likely they offer monthly retainers.

How Many Consultants Offer Productized Services

Productized consulting is when you strip one of your offers down to its essentials. They’re fixed (non-changing) in terms of both scope and price.

They’re another fantastic way to create greater leverage in your consulting business.

How many consultants offer productized consulting services?

  • 46% of consultants don’t offer productized consulting but are interested in it.
  • 44% of consultants do offer productized consulting.
  • 10% of consultants don’t offer productized consulting and don’t plan to.

Here’s a further look at the data around productized consulting:

  • Consultants who are specialists are more than twice as likely to offer productized consulting versus non-specialists.
  • There was no correlation between offering productized consulting and earning more income per month.
  • Women are slightly more likely to offer productized consulting than men, with 46% of them offering productized services (compared to 42% for men).
  • Years of experience correlated with the likeliness of the consultant offering productized services.

Consulting Fees Positioning & Mindset

Pricing comes down to your confidence.

We asked consultants about their pricing mindset: how they think about their fees and pricing.

Do Consultants Lower Their Fees To Get Clients?

We don’t ever recommend lowering your fees to win consulting business. Doing so sends the wrong signals to the client about your value, and what you can do for their business.

  • However, 47% of consultants have lowered their fees in the past to win business, but don’t do it anymore.
  • 28% of consultants haven’t and would never lower their fees to win clients.
  • 25% of consultants do this often to win business.

Here’s a deeper look at the type of consultants to lower their fees…

  • There is virtually no difference between male and female consultants when it comes to who lowers their fees to get clients.
  • Consultants who charge more per project and who earn more per month are less likely to lower their fees in order to get clients.
  • Consultants who are specialists are less likely to lower their fees to get new clients compared to consultants who aren’t specialists.

Do Consultants Offer Discounts?

How many consultants offer discounts for specific clients or projects?

  • 47% of consultants don’t offer any discounts.
  • 26% of consultants offer a 10-25% discount to specific clients.
  • 20% of consultants offer a 5-10% discount to specific clients.
  • 4% of consultants offer a 25-50% discount to specific clients.
  • 2% of consultants offer a 50%+ discount to specific clients.

After segmenting the data and taking a deeper look, we also found that…

  • Consultants who earn more are less likely to offer discounts. Of those earning $10K+ per month, 58% don’t offer discounts. Of those earning $2K-$5K per month, 55% do offer discounts.
  • Over 60% of consultants in Asia offer some form of discount. In North America over 50% of consultants don’t offer any form of discount.
  • Consultants with more years of experience are less likely to offer discounts for their services.
  • Female consultants are slightly more likely to offer discounts for their services.

How Many Consultants Are Specialists

Specialization is a key pricing factor in consulting.

Clients are often willing to pay a premium fee for consultants who’ve demonstrated expertise in their industry.

How many consultants have this specialty expertise?

  • 66% of consultants are specialists and make it clear in their marketing.
  • 23% of consultants are specialists, but don’t make it clear in their marketing.
  • 9% of consultants are not specialists, but are looking to specialize their firm.
  • 3% of consultants are not specialists and are not looking to specialize their firm.

Here’s a deeper look at the segmented data when it comes to specialization:

  • Specialists tend to charge more for their average consulting engagement. Of the consultants who charge between $20K-$50K for their average project, 81% of them are specialists.
  • There is virtually no difference between men and women with regard to their specialization. However, male consultants are a bit more likely to be clear about their specialization in their marketing than women.

How Many Consultants Want To Raise Their Fees

As you might expect, the majority of consultants (79%) want to increase their fees.

And 21% of consultants are not actively looking to increase their fees.

Do Consultants List Their Fees On Their Website?

When it comes to whether or not consultants list their pricing on their website, the preference is clear.

  • 88% of consultants don’t list their fees on their website.
  • 8% of consultants list a range of their pricing on their website.
  • And 4% of consultants list their exact pricing on their website.

Here’s a deeper look at the data around listing fees on your consulting website:

  • Less experienced consultants are more likely to list their fees on their website. 15% of consultants with 1-3 years of experience list their pricing on their website. That percentage is 8% for consultants with 15+ years of experience.
  • 93% of consultants who charge $20K-$50K for their average engagement do not list their fees on their website.
  • Women are slightly more likely than men to list their consulting fees on their consulting websites.

When Do Consultants First Mention Price With Clients?

Consultants bring up their fees at different stages of the pipeline.

  • 46% of consultants first talk about pricing during the proposal stage.
  • 26% of consultants first talk about pricing during the first call.
  • 25% of consultants first talk about pricing before sending their proposal.
  • 3% of consultants first talk about pricing before the first call with a client.

Here’s an inside look at the data around mentioning price with clients:

  • Consultants with a higher average project engagement value ($20K-$50K) are more likely to first discuss price during the proposal. 59% of them first bring up the price at this point.
  • Women are slightly more likely to bring up pricing earlier in the sales process than men.
  • More senior consultants (60+) tend to bring up prices later in the process than younger consultants (30-40).

Have Consultants Ever Lost Business Due To Pricing?

  • Most consultants (64%) have lost business due to pricing their services too high for the client.
  • 35% of consultants have never lost business due to their fees.
  • And 2% of consultants have lost business due to their pricing being too low.

Upon further inspection, we’ve found some interesting data around this question:

  • Specialists are slightly more likely to have been rejected due to high pricing, with 67% of them experiencing this (compared to 55% of non-specialists).
  • There is virtually no difference between men and women on this factor (2% more women have lost business due to their pricing being too high).
  • Consultants who charge more per project ($20K-$50K) have only been rejected due to high pricing 9% more than consultants who only charge $500-$2K per project.

What Consultants Charge Per Hour

What are consultants charging per hour for delivering consulting work?

  • 39% of consultants charge between $100-$250 per hour.
  • 25% don’t use hourly fees.
  • 19% charge between $250-$500 per hour.
  • 12% charge less than $100 per hour.
  • 4% charge between $500-$1000 per hour.
  • And 0.5% charge $1000+ per hour.

So, how does segmentation affect this consulting fees data?

  • Specialist consultants have a higher hourly rate than non-specialists. 28% of specialists charge $250+ per hour. Only 7% of non-specialists charge $250+ per hour.
  • Male consultants are slightly more likely (5%) than female consultants to not use hourly fees.
  • Of consultants making $2K-$5K per month, 64% of them are charging less than $250 per hour. For consultants making $10K-$45K per month, 37% of them are charging less than $250 per hour.

What’s Holding Consultants Back From Raising Their Fees

There are many different reasons why consultants aren’t raising their fees despite wishing to do so.

  • 24% aren’t raising their fees because they are afraid of losing their clients.
  • 21% aren’t raising their fees because they don’t know how to raise them effectively.
  • 20% claim nothing is holding them back from raising their fees.
  • 13% aren’t raising their fees because they feel like they need more experience.
  • 12% aren’t raising their fees because they feel like they need to create better results for their clients.
  • 9% aren’t raising their fees because they feel like they lack confidence.

Here’s a deeper look at the data around what’s holding consultants back from raising their fees.

  • The biggest thing stopping specialists from raising their fees is the fear of losing clients. The biggest thing stopping non-specialists from raising their fees is their perceived lack of experience.
  • The biggest thing holding women back from raising their fees is that they don’t know how to do it effectively (25% of them list this as their main reason). For men, the biggest thing holding them back from raising their fees is the fear of losing clients (24% list this as their #1 reason).

Consulting Business Financials

How much are consultants charging for their services? How much are they earning per year?

We asked our list of 45K+ consultants these questions for the latest insights into the financials of small consulting firms.

Average Consulting Project Value

Here’s how the numbers break down for the average consulting engagement value:

  • 23%: $500-$2000 USD
  • 16%: $2001-$5000 USD
  • 15%: $20,001-$50,000
  • 15%: $5001-$10,000 USD
  • 14%: $10,001-$20,000
  • 10%: $50,001-$100,000
  • 7%: $100,000+ USD

Here’s how average consulting project value breaks down upon further analysis:

  • Consultants who are specialists have a much higher average consulting engagement value. 52% of specialists charge at least $10K+ per project. Only 18% of non-specialists charge at least $10K+ per consulting project.
  • Women tend to have a lower average consulting engagement value than men. The majority of female consultants charge under $10K per project. The majority of male consultants charge over $10K per project.
  • Consultants in North America tend to have a higher average consulting engagement value than consultants in Asia.

How Much Consultants Earn Per Month (USD)

Why should you start a consulting business?

One of the reasons consultants start a consulting business is for the unlimited earning potential.

With the correct strategy and mindset, consultants can earn five/six figures — or even more — per month.

Here’s how much solo consultants and small consulting firms are earning per month:

  • 32% of consultants earn $10K-$45K per month.
  • 22% of consultants are earning less than $2K per month.
  • 20% of consultants are earning $5K-$10K per month.
  • 20% of consultants are earning $2K-$5K per month.
  • 3% of consultants are earning $45K-$100K per month.
  • 1% of consultants are earning $100K-$250K per month.
  • And 1% of consultants are earning $250K+ per month.

Here’s a deeper look at the data on how much consultants earn per month:

  • Consultants who are specialists earn more per month than those who are non-specialists. For non-specialists, 73% are making $5K per month or less. For specialists, 42% are making $10K+ per month.
  • Consultants whose average project value is $20K-$50K per project are earning are more per month than those whose average project value is $500-$2000. 66% of them are earning $10k+ per month compared to 6% of consultants whose average project is worth $500-$2000.
  • Age and experience in consulting are correlated to earning more per month.

Average Consulting Business Profit Margin

Consulting is known to be a high profit-margin business — and the data generally supports that:

  • 34% of consultants enjoy a 70%+ profit margin.
  • 14% of consultants have a 60% profit margin.
  • 14% of consultants have a profit margin of 20% or lower.
  • 14% of consultants have a profit margin of 50%.
  • 13% of consultants have a profit margin of 30%.
  • And 10% of consultants have a profit margin of 40%.

Here’s a further analysis of the profit margin in consulting:

  • Consultants who are specialists tend to have a higher profit margin. 54% of specialists have a profit margin of 70% or more. For non-specialists, only 35% of them have a profit margin of 70% or more.
  • Consultants who typically charge $20K-$50K per project tend to have a higher profit margin than those charging less. 56% of consultants who charge $20K-$50K per project have a profit margin of 60%+.
  • Male consultants typically have a slightly higher average profit margin than female consultants. 39% of male consultants have a profit margin of 70%+ compared to 28% of female consultants.

Will Consultants Raise Their Fees Next Year?

  • In 2024, 55% of consultants plan to raise their fees.
  • 45% aren’t sure whether or not they’ll raise their fees.
  • And 1 respondent plans to lower their fees.

Here’s a deeper look at the data on who plans to raise their fees:

  • There was virtually no difference between Men and Women on this question.
  • Consultants who are charging and earning less than higher-earning consultants are more likely to be planning to charge more.
  • 63% of consultants aged 30-40 are planning to raise their fees compared to 47% of consultants aged 60+.

How Much Consultants Plan To Raise Their Fees By

For the consultants who plan to raise their fees in 2024, here’s how much they plan to raise their fees by:

  • 33% plan to raise their fees by 10%
  • 29% plan to raise their fees by 20%
  • 16% plan to raise their fees by 30% or more.

Here’s more insight into this question and how the data breaks down:

  • Men are more likely to plan for higher fee raises (20%+) than women.
  • Consultants in Asia are more likely to be planning for higher fee increases (20%+).

Consulting Projects & Clients

For the first time, we asked consultants about their projects, clients, and how these factors play into their pricing.

Average Consulting Project Length

How long do entrepreneurial consultants spend on their projects?

  • 30% of consultants spend 1-3 months on their average project.
  • 25% of consultants spend 3-6 months on their average project.
  • 20% of consultants spend 6-12 months on their average project.
  • 12% spend 12 months or longer, and 12 % also spend less than 1 month on their average project.

Here’s how the segmented data looks in terms of average consulting project length:

  • Consultants earning $10K-$45K per month tend to work more on 3-6 month projects and 6-12 month projects compared to consultants making $2K-$5K per month. For consultants making $10K-$45K per month, 78% of their projects are 3 months or longer (compared to 45% of consultants making $2K-$5K per month).
  • There is a correlation between the length of consulting projects and how much consultants charge for said projects. The longer the project, the more consultants tend to charge.
  • Consultants in North America tend to work on longer projects (3 months or longer) compared to consultants in Asia.

How Many Consultants Are Staffed On Projects

How many consultants do firm owners staff on their projects?

  • 51% of consultants work on client projects themselves.
  • 44% of consulting firm owners put 2-6 consultants on their average client project.
  • 3% of consulting firm owners put 6-10 consultants on their average client project.
  • 2% of consulting firm owners put 10+ consultants on their average client project.

Here’s a further look at this particular survey question and data:

  • In North America, 56% of consultants typically work on client projects independently on their own. In Asia, 67% of consultants typically have 2-6 people work on their client projects. Consultants in Asia are more likely to have additional people staffed on client projects.
  • Female consultants are more likely to work on client projects independently (61% of them). For male consultants, that number is 45% -—with 49% of them having 2 or more people working on client projects.
  • Age and experience in consulting are correlated with having more people involved in client projects.

Average Company Size That Consultants Work With

How many employees do a consultant’s clients typically have?

  • 37% of their clients have 10-100 employees.
  • 30% of their clients have less than 10 employees.
  • 16% of their clients have 100-500 employees.
  • 10% of their clients have 1000+ employees.
  • And 7% of their clients have 500-1000 employees.

Here’s a deeper look at how this data breaks down:

  • Consultants who charge more ($20K-$50K) for their average project tend to work with bigger companies (10+ employees).
  • Consultants who earn more per month ($10K – $45K+) tend to work with companies with more employees.
  • There is a small correlation between a consultant’s age and experience and working with companies that have more employees.

Consulting Demographics

We always ask our list of consultants to tell us about other aspects of their business. This helps us break down the numbers even more.

Here is the demographic data from our list of 45K+ independent consultants and small consulting firm owners.

Average Level Of Experience Consultants Have

How much experience do consulting business owners have consulting?

  • 24% have 15+ years of experience.
  • 19% have 1-3 years of experience.
  • 5-10% have 5-10 years of experience.
  • 15% have 3-5 years of experience.
  • 14% have less than 1 year of experience.
  • 11% have 10-15 years of experience.

Types Of Consultants

There are many types of consultants. Here are the types of consultants in this study:

  • Management consultant 25%
  • Strategy consultant 17%
  • Other 16%
  • Operations consultant 9%
  • IT/Tech consultant 8%
  • Marketing consultant 7%
  • HR consultant 5%
  • Non-profit consultant 4%
  • Financial advisory consultant 3%
  • Sales consultant 3%
  • Data consultant 2%
  • Design/branding consultant 1%

How Many Clients Consultants Work With Per Year

You don’t have to work with a ton of clients per year to run a highly profitable consulting business.

  • 31% of consultants work with 3-6 clients per year.
  • 27% of consultants work with 1-3 clients per year.
  • 25% of consultants work with 6-12 clients per year.
  • 10% of consultants work with 10-20 clients per year.
  • 4% of consultants work with 20-40 clients per year.
  • 3% of consultants work with 40+ clients per year.

And here’s a deeper look at this particular question:

  • 58% of consultants who charge between $20K-$50K for their average project work with between 3-12 clients per year.
  • 42% of non-specialists work with between 1-3 clients per year. That percentage is only 24% for specialist consultants.
  • Strategy consultants work with slightly more clients per year than management consultants.
  • There is virtually no difference between male and female consultants with regard to how many clients they work with.

Do Consultants Work With Employees Or Contractors

If you want to scale your consulting business, hiring employees or contractors can be a great way to do that.

  • 46% of consultants hire contractors but don’t employ anyone full-time.
  • 39% of consultants don’t use contractors or have employees.
  • 14% of consultants have full-time employees.

Here’s an inside look at how the segments play into this data:

  • 47% of female consultants do not work with any contractors or employees. For men, that percentage is 35%.
  • The more consultants earn per month and the higher their average project engagement value, the more likely they are to work with contractors or have employees.
  • Specialists are much more likely to employ full-time people than non-specialists. 16% of specialists employ people full-time compared to 6% of non-specialists.
  • Of consultants 60+ years of age, 11% employ people full-time. For consultants aged 30-40, 25% of them employ people full-time.

How Many Employees Consulting Firms Have

For the consultants who do have full-time employees, here’s how many employees they have:

  • 1-3 employees (21.43%)
  • 4-10 (7.28%)
  • 11-25 (1.32%)
  • 26-50 (1.19%)
  • 100+ (0.53%)
  • 51-100 (0.13%)

Average Age Of Consultants

You can be any age and start a consulting business.

  • The majority of consultants we polled (31%) are 50-60 years old.
  • 27% are 40-50 years old.
  • 26% are 60+ years old.
  • 13% are 30-40 years old.
  • 3% are 20-30 years old.

Consulting Gender Demographics

61% of consultants polled are male, and 37% are female.

1% preferred not to share or selected “Other.”

Here’s a deeper look at the consulting gender data and consulting fees:

  • Of consultants charging between $20K-$50K for their average project, 68% are men, and 32% are women.
  • Of consultants making $10K-$45K per month, 70% are men, and 29% are women.

Consulting Geography Demographics

Consultants all around the world took our fees survey.

Here’s where they are from:

  • North America – 62.89%
  • Western Europe – 12.37%
  • Asia – 7.63%
  • Africa – 6.97%
  • Australia/New Zealand – 5.79%
  • Eastern Europe – 2.37%
  • South America -1.97%

How To Set Your Consulting Fees (Consulting Fees Calculator)

Want to know exactly how much you should be charging to reach your income goals?

For that, we developed a Consulting Fees Calculator.

In 4 steps, you’ll learn your daily billable rate and your ideal hourly rate so that you can reach your target income.

It’s an invaluable tool to help you get clear on how much you should be charging your clients.

That said, we advise you to move towards greater leverage — away from billing based on your time. Here’s how you can do that:

  • Productized Services: Giving your services a fixed scope and price, creating a more efficient delivery.
  • Value-Based Fees: Pricing your services based on the value you might create for your client instead of the time you spend delivering.
  • Monthly Retainers: Recurring revenue where your client either pays for your work or pays for access to you.
  • ROI-Based Fees: Pricing your services based to capture a percentage of the earnings or savings you create for your client.
  • Equity: Working for shares in your client’s business instead of a fixed amount of money.

Consulting Fees Action Plan

Here are three action items for you if you’re serious about raising your rates and increasing your revenue.

  • Elevate your mindset. If you’re uncomfortable with the idea of raising your rate or you would feel that your clients would leave you, then you need to work on your mindset before you think about your pricing. Read The Elite Consulting Mind — and take action on what you learn there.
  • Raise your hourly rate. Even though hourly rates aren’t ideal, they are often the foundation of your pricing strategy. And no one is going to give you the green light to raise them — you must do so yourself. What better time than now? Commit to raising your hourly rate by at least 10-20% by the first of January 2020.
  • Experiment with a leveraged form of pricing. Whether that be productized consulting, value-based pricing, or ROI-based pricing, charge a client using a method other than just your time. You’ll learn how much more revenue you can earn when you stop charging for your time and start charging what your clients really care about — the value you’re creating for their business.

Want Expert Help To Raise Your Consulting Fees?

No matter your level of experience, the Consulting Success® team can help you raise your consulting fees.

Our Momentum program is for newer consultants who want to follow a step-by-step system to predictably and reliably get to 6-figures per year or more.

Our Clarity program is for consultants committed to maximize their value and fees through personal coaching and strategy on more advanced pricing strategies, marketing systems to generate consistent leads — to grow and scale their business.

Whether you’re struggling to price your services based on value, want to build in more recurring revenue, or want to know how to structure an equity deal properly, our programs will help you increase your pricing with confidence.

Conclusion

That concludes the Consulting Fees Study.

What did you learn?

More importantly, how are you going to use this information to increase your value, raise your prices, and reach your target income?

Information without action won’t get you anywhere.

I challenge you to take what you’ve learned here to make your consulting business better.

We’d love to hear your thoughts about this study.

Leave a reply in the comments — and share your thoughts below!

32 thoughts on “Consulting Fees Guide: How Much To Charge For Consulting (3 Formulas & Examples)

  1. Bogdan says:

    Wonderful survey! You’ve done a great job surveying such a large pool of consultants and sharing the results!
    I was curious if you’re willing to maybe show us a breakdown by industry? I’m operating in the IT/Tech consulting and I’m curious how the numbers look for that…Cheers!

    • Thanks Bogdan – appreciate the comment and support!. We will look into this and notify you with any updates.

  2. very informative and helpful reserach.great hard work by Micheal and Thank you for Sharing.very very incisive.God bless you Micheal. says:

    very incisive,detailed information and very helpful .Thank you Micheal.Solid hard work and your generosity in sharing with us Micheal.God bless you!

  3. Joe O'Mahoney says:

    Great work, yet again. Really impressed with your output. Would it be possible to get this as a .pdf please? I’d love to share it with my MBA students, but the current format doesn’t lend itself.

    Thanks

    Joe

    • Much appreciated Joe. We don’t have a PDF available but why not provide the direct link to the study to all your students. They can access it on their phones, tablets or computers : )

  4. The depth and quality of your content is unique. I’ve recently joined a specialist consultancy (small team 50+) part of an international consultancy and advisory organisation. I would love for some collaboration in the future, I’m only in 2 months so have to settle before I start recommending external support to the Senior Management Team, they have a great foundation to expand from.

    • Appreciate that Peter and congratulations on the new position, that’s exciting!

  5. Very comprehensive study. It shows in detail what consultants all over the world are doing. Thanks, Michael!

    • Appreciate the feedback Earline. The team did a great job on the study and we’re looking forward to putting out the next one.

  6. Hi Michael
    Thanks for the report. I was wondering how can we have access to the data sources.
    Thanks

    • Hamed, you’re very welcome. We aren’t providing access to the data currently. Wish you great success.

  7. I am very happy to read the above information. It is really helpful for me, I learned many new things from your website. Big thanks to you all for everything and I am really very happy.
    Can you share which is the best placement consultancy in Pune

  8. As I was reading your article I must say it was quite helpful. Most of the time small businesses go that far or stuck at some point because they don’t know what to do. As being the CEO of well-known business consulting firm Makateb. I appreciate the way you explained the cause of how they affect business. I also appreciate the way you delivered their remedies. Most people don’t know it and that’s why they had to stop in the middle. You did a great job by mentioning the major factors that became hurdles (most of the time). From Insufficient Funding to Failure to Seek Out-side Assistance, Talent Deficits to Destructive New Technology, all of these are major obstacles for business whether it’s a small one or reaching the heights of success. If a company overcome these obstacles, they’re more likely to grow. In the end, I just want to say you did a great job by sharing this article with people who are struggling with this.

  9. Thanks for the good info. Interesting to see it all broken down like that.

  10. Very insightful. Lots of hard work has been put into this and then shared very generously with everybody. Greatly appreciated. Thank you and God Bless.

    • Thank you Michael, appreciate your comment and glad it resonates with you.

  11. An interesting read on consulting fees, it gives you something to think about.

    • Glad you found it interesting John and hope it helps. If you have other questions get in touch.

  12. Harrison Phong says:

    Very interesting and insightful piece of work. Greatly appreciated.
    By any chance you have also the comparison for consultancy rates between countries :
    e.g. US , India, Europe, China, Asia, Australia ??
    Does the argument of going to LCC for a more cost effective rates still hold giving that Consulting firms are increasing their rates through various approaches and justification, even though there are clear differences in cost of living and GDP for each country?

    • Harrison, fees can certainly be different based on where you live. However, that doesn’t need to be a limiting factor. There are consultants living in countries considered less developed who are still able to charge and earn significant rates – especially if your clientele is global. We don’t have a country by country breakdown here.

  13. Mugweri Ben says:

    I have appreciated your presentation of consultancy fees. This will help me to undertake a consultancy am about to begin

  14. Sam says:

    I sell equipment. It’s often to start-ups or people adding a brand new service to their business. I’m interested in encouraging some of my customers to be consultants for others. I think my new customers would benefit from more thorough help, and it would allow me to draw a line between what I offer and do not offer (i.e. I’m not a business consultant – but here are some options).

    In a value-based model, how do you keep clients from sucking you dry? How do you put constraints along with the list of services? My customers tend to ask questions for a lingering 5 years and call and text all hours of the night and on weekends. Does being a consultant in the first place naturally discourage this? Do you charge hourly after the standard deliverables, or maybe include a specified number of support hours as a line item? Thanks! Great information here.

    • Hi Sam, great questions. Start by defining very clear responsibilities of what each part is required to do and what the expectations are. And when a client asks additional questions or for help that is outside the scope of the engagement offer to provide them with another proposal to help them with that separate work.

  15. Tammy Stains says:

    Michael,
    Thank you so much for sharing your knowledge! This has been an invaluable article because I am starting my own consulting company and had no idea how I was going to determine what I should charge for services.
    Thank you for giving me options and the information I need to succeed.
    Bless you,
    Tammy

  16. Mia Evans says:

    I find it interesting when you said that consultants are earning a lot per month wherein they have increased some percentage from 2018 to 2019. And they might be named more now because it’s already 2023, so it must be helpful to do your research and compare rates from various companies and professionals to find those that you can afford if you are starting out in your business. For example, it might also be different when you hire experts in professional technology consulting for businesses compared to those helping entrepreneurs in other fields.

  17. Russ Bankson says:

    How did you arrive at these numbers? 500 per client = 1500/mo *12=18k per year revenue

    You know that each client is worth $500 per month to your prospect.
    And they want to win 3 clients per month.
    Now, you can calculate the tangible value.
    The tangible value is the quantifiable value your offer provides.
    For example, if you help Acme Financial Services win 3 new clients per month, you’ll help them generate:
    $18K in monthly recurring revenue.
    $117K in total revenue after a year.

    • Tsavo Neal says:

      Hey Russ,

      The $117K is the total sum of the revenue generated from months 1 through 12:

      1500
      3000
      4500
      6000
      7500
      9000
      10500
      12000
      13500
      15000
      16500
      18000

      117000

  18. Millie Hue says:

    I like that you talked about consulting companies that will charge by the hour, because it is a simple method that is perfect for those that are new to the industry. In my opinion, IT consulting services that do or offer those kinds of options will be perfect for the people who are also starting with their business. They would need their help int technological aspects, but they would need to stick to their budget to prevent them from overspending their capital on one area.

  19. Richard Millington says:

    I’ve always felt the challenge with value-based fees is it assume the prospect has nowhere else to go or turn to.
    Sure, if you’re the only game in town you can estimate the value of the project and set your rate accordingly. But if you’re in a competitive environment it doesn’t work as well. People will be comparing what you offer against others – and while you can differentiate yourself to a certain amount – you can’t go multiples higher of what anyone else is charging. Pricing is ultimately a story and above a certain level you get into RFP territory. I think early on people need to decide which tier their playing in and find the right pricing to match.

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