Average Consulting Rates by Industry in 2020 Infographic

It’s a demanded option in projects where it’s challenging to set a fixed timeline. Basically, IT consulting fees per hour vary depending on location.

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. Productized consulting services are becoming more popular — 40% of consultants offer a fixed-scope, fixed-price productized service.

Business Consulting Jobs by Hourly Rate

One of the reasons consultants start their consulting business is for the unlimited earning potential. We asked our list of 30K+ consultants for the latest insights into the financials of small consulting firms.

The costs of consulting services can vary significantly based upon the specific type of services and industries involved. Additional details are covered in the sections that follow. Since not all projects have the same requirements and goals, different IT consulting services will be required and priced accordingly. ✔️ We offer a convenient time zone for North American clients, dedicated project managers, and favorable project rates, thanks to our well-organized R&D branch in Ukraine and other countries. As an entrepreneur and consultant, you’ll be paying for your own benefits, buying your own computer and workspace, and no one will be paying you to go on vacation. You’ll also spend at least half your time tracking down new clients rather than working billable hours. There is one more factor to consider that makes this a bit easier.

Consultants Who Want To Increase Their Fees

Give your client 3 options in your proposal, and allow them to choose their level of risk. 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. You know that each client is worth $500 per month to your prospect. But there is no better method for raising your rates and creating more value. Using the value-based method is just as much art as it is science.

Using a formula or fee calculator like the examples listed below is a good jumping-off point. The least profitable industry is Customer & Administrative support, with all 4 of its listed jobs being the bottom paying freelance jobs. The freelance job that pays the least is Data Entry Clerk ($13/hour). The most profitable industry is the Legal field, with all 5 of its listed jobs being in the top 5 best paying freelance jobs. The freelance job that pays the most is Tax Lawyer ($30/hour). Cutting corners in the early stages of development can leave you with software that underperforms or malfunctions, costing you even more time and money to eradicate bugs and fix coding errors. In the worst case scenario, you may be left with an inferior product that has to be completely rebuilt from scratch.

Assessing your experience and services

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.

Regardless of which pricing model you choose, be confident in your rates and know that the client doesn’t care about the “time” it takes you to complete a project. Evaluate the value of that end result, and charge accordingly. You can also add a clause to your contract stating that this project rate is based on the items outlined in the statement of work. Anything that comes up that’s out of scope will either be renegotiated or charged at your hourly rate. Once you’ve familiarized yourself with the going market rates, consider where you fall within those ranges. Do you have expertise on par with a specialist, with a few working years behind you?

How Much Is My Service Worth?

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.

• 15.40% of consultants have done a performance deal and it worked out well for both parties.
• If you want to NET $100,000 per year, you’ll need to charge double that amount — or $178 per hour.
• 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.
• One of the best ways to build a more resilient consulting business is to use monthly retainers.
• Recurring revenue can provide a higher sense of security because you know you have predictable income coming in each month.
• Defining and reinforcing a predetermined scope of work is crucial when charging by the project.

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. Productized consulting is when you take your service, strip it down to its essentials, and give it a fixed scope and price. 28.33% use value-based pricing on some of their projects. It’s one of the best ways consultants get leverage and increase their earnings without spending more time working.

Understanding what the client needs play a major role in how you price or whether you want to move forward at all. Toss out a number too early, and it might be hard to change it later if the project evolves.

Set rates that make sense for your business and personal expenses. This tip goes beyond value, the scope of work, and client perceptions—you have to set prices that’ll lead to adequate quality of life and profitability for your business.

The mid-market fee range is populated with three large types of consulting firms. Global Functional Specialists– such as Hay Group, Mercer and Willis Towers Watson or FTI Consulting and Navigant – typically have a revenue per consultant between $300,000 and $400,000 per year. The Big Four– Deloitte, PwC, EY and KPMG – compete in the same range yet in some services areas also offer lower fees. Because your fee is an expression of value, low consulting rates don’t necessarily lead to work or respect. If your clients have regularly hired consultants or freelancers, they’ll be familiar with average consulting market rates.