How Much Does a Business Consultant Cost: Consulting Fees and Pricing Structure

Consultants are notorious for undercharging — especially when they charge by the hour. You’ll spend just as much time winning projects as you do delivering them. As a beginner consultant, you’re typically not working 40-hour weeks.

It’s not just the time you put into consulting—it’s the results of the consulting. No matter what situation you find yourself in, you have the ability to adjust your fees accordingly. It’s time to create the business you want, delivering value while making a good living. Let’s take a look at the different methods you can use to create your pricing structure. If you ask any consultant, freelancer, or other „gig” worker what the hardest part of their job is, most will likely say „pricing my services.”

Consulting fees and pricing can be structured in several ways. But like in most businesses offering services, the number one challenge is pricing their offers. 48.67% of consultants lowered their fees to win clients in the past, but don’t do it anymore. One of the best ways to build a more resilient consulting business is to use monthly retainers.

Market rate

On the other hand, a consultant who provides ongoing monthly services may want to bill on a monthly retainer. It doesn’t matter whether the organization has a business plan in place yet or not. Consulting firms – especially those active in the higher segments of the market – do not unveil their fee structure. Consultancies regard their rates as one of their key competitive assets and therefore manage their fee structure as a 'trade secret’, similar to salaries, which are also shrouded in secrecy. But it’s your job to make your potential clients see your value. When clients see your consulting rates as an investment, not an expense, you’ll be able to charge high rates without pushback.

75.15% of consultants we polled are male, and 25.8% are female. 44.11% of consultants we polled do not have any employees or contractors. 19.01% haven’t and would not lower their fees to win clients. 9.51% do not offer productized consulting and aren’t interested in doing so.

Understand the total hourly compensation opportunity for a Business Consultant, hourly wage plus other pay elements

Some of my peers sell one-time consulting calls and then upsell their other services through their agencies or partners. There are cases wherein a consultant’s services are needed on an ongoing basis. In such cases, a retainer agreement is more appropriate. I am available for WordPress consulting and business growth strategies via Clarity so you can schedule a 15-minute call to unblock the challenges you’ve been struggling with. Here are three action items for you if you’re serious about raising your rates and increasing your revenue.

• Here are three action items for you if you’re serious about raising your rates and increasing your revenue.
• The tips above paired with the processes below should help you settle on what to charge for your consulting services and formulate a consulting business price guide.
• In this case, you can charge for a few hours upfront, then charge the rest at the end of the week or month.
• Sometimes, it could be an invite to a mastermind, a business event they host , a private Slack community, a free promotion at events, and a lot of other factors included in a larger package.
• Investment firms often wear multiple hats, as Goldman did on this deal.

Do some real thinking on how much time you will spend on a project. Make sure to estimate your hours for every stage of the project, including client analysis, research, and interviews, as well as drafting, editing, and creating any type of proposal or report. You may convince your client to cut out some of the scope to meet your pricing constraints, or you may insert a clause into the agreement to raise your rates after 2 to 3 months of satisfactory work. Some clients will start the conversation by proposing their standard rates, while others will ask what you charge. For example, let’s say you wanted to make a gross salary of $60,000 per year.

Past Consulting Fees Comparison

How much experience you have in your industry influences how much you can charge. You want to do research to make sure that you aren’t overvaluing or undervaluing your level of experience. Different industries have different rates for projects, so your area of expertise and the scope of the project will influence your pricing model and consultant arrangement. Calculate your consulting retainer fee the same way you’d do your project rates—it’s essentially a comprehensive monthly project rather than smaller one-off assignments. Some consultants offer discounts for retainer fees as they’d prefer consistent income over hourly or per-project invoices.

However, if you set your rates too high, you may alienate yourself from the client and out price yourself out of the project. Clients may perceive you as the high-end of the consulting or freelance market, and they may decide to settle for a less experienced but more affordable alternative. Before you set a price, ensure you understand everything that the project entails.

As an employee, you need an hourly wage of $48-$50 an hour to make $100,000 per year. Before you even enter the negotiation phase with your first clients, there are several factors to consider when deciding how much to charge for consulting. Accounting consultants, who should also be CPAs, can charge between $150 and $450 an hour. If you consult clients for diversity training, you can charge between $150 to $250 per hour. Kaitlin is an editor at Square where she covers everything from how small businesses can start, run, and grow, to how enterprise companies can use tools and data to become industry leaders. Management consultants hone in on improving specific business strategies and specialize in disciplines or industries such as HR, IT, or health care.

How Much Should I Pay a Business Consultant?

80% of consultant are actively looking to increase their rate. 33% of consultants will lower their fees in order to win clients. Depending on the client or project, you may adjust your structure or choose a different model to charge entirely. You don’t have to pick just one model to work with – it’s fine to switch it up as long as both you and your client are comfortable with the pricing and you’re transparent about any costs. The coaches and consultants that succeed are those whose business lasts long enough to make an impact on their clients’ lives.

After you’ve estimated the time you’ll spend and any additional costs, you need to decide how to translate that into a pricing model. Will you charge by the hour, per project, by performance, or will it be a combination? Make sure you make this decision based on the project you’ve been asked to work on, how your client works, and the structure that you think will get you fairly compensated. The competitive landscape and your physical location are the final components that will influence your consulting fees. While you don’t need to mirror your competition’s prices, it’s important to weigh in how much others are charging to remain competitive.

Hourly rate can vary widely depending on many important factors, including education, certifications, additional skills, the number of years you have spent in your profession. With more online, real-time compensation data than any other website, Salary.com helps you determine your exact pay target. However, it’ll be impossible for you to consult with clients for 8 hours a day during all 235 days. You’ll likely spend those days doing admin work and finding new consulting clients.

Factors in Determining Consulting Fees and Pricing Structures

If you think a consultant has something to offer other than his expert counsel that is of great value, consider this in deciding on which consultant to work with. For instance, I had a couple of calls with a VC charging $600/hr. He introduced me to a large startup community with valuable peers I still network with occasionally.

They are another fantastic way to create greater leverage in your business. Recurring revenue can provide a higher sense of security because you know you have predictable income coming in each month. But, as you can see, it takes an experienced consultant to make it work. Instead of “pitching” your client, you’re collaborating with the client on different ways to help them achieve their goals. Finally, it’s best if you present your 3 options over a call.

How to Price Your Consulting Services

Sessions take place online and can range business consulting rates from four to 20 participants in size.

41.44% of consultants don’t have any retainer-based work, but would like to. 15.40% of consultants have done a performance deal and it worked out well for both parties. 60.46% of consultants have not done a performance deal, but are open to the idea. 42% of consultants have never tried value-based pricing because they don’t know how. For example, helping your client generate 3 clients per month will generate $18K in monthly recurring revenue. One of the issues with the hourly method is that your client feels uncertainty around how much they’ll end up paying you.

Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Peshev was born in Bulgaria and gained diverse management experience through his training work across Europe, North America, and the Arab world. With 10,000+ hours in consulting and training for organizations like SAP, VMware, CERN, he’s been helping hundreds of SMEs growing in different stages of the business lifecycle. Large corporations tend to hire niche consultants for areas of expertise outside their own comfort zone.

If your clients have regularly hired consultants or freelancers, they’ll be familiar with average consulting market rates. Pitching yourself on the low end simply to undercut competitors won’t always serve you well. Knowing what your competitors are up to is crucial in deciding on your pricing. Their experience, like special skills and certifications, could be impacting their prices.