Average Consulting Rates by Industry in 2020 Infographic

They have different needs, processes, and expectations. Be patient, and don’t expect them to know exactly what they want from the get-go. Consultant get paid based on the results of the project. Take a look at the projects we’ve developed in our portfolio. We have an in-depth article describing major types of appraisement. Usually, small outsourcing companies specialize in one specific area, like UI/UX design, mobile app development, or exact programming languages like Node.js, React Native, and so on. Businesses across the world rely on IT consultancy to keep pace with technological advancement in a cost-effective way.

• If you find a business willing to agree to these terms, they either don’t have the money to pay you upfront or lack faith in their follow-through to implement the steps you advise them to take.
• That number can be as high or as low as those parties accept.
• Your client wants a consultant they can trust, and that trust is established throughout negotiations and working together.
• 9.89% have tried a performance deal, but it did not work out well.
• Many consultants don’t start their work until they’ve received at least a percentage of the payment upfront.

You set an hourly rate, track your hours, and then bill your client by the hour. Multiply that by your hourly rate and then add a 10-20% markup for unexpected contingencies, and voila—you have a rough estimate for a per-project consultant rate. 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 scope of work should be a large determinant of your rates, but pricing per hour or project is challenging to estimate. For example, it may be quicker for you to write a 2,000-word article for a company than to help produce a 5-minute podcast episode.

The Project-Based Method

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.

• These calculators are a great way to start off figuring out your own consulting rates.
• Charging per hour definitely has its benefits, but there is one definite downside to this fee structure — the better you get at your job, the less you make.
• They’re often more experienced and have in-depth tech expertise in specific areas.
• To stay competitive and turn technologies into a growth driver, companies of all sizes resort to software consulting.
• Consultants enjoy this pricing model because they can earn more than they would with a traditional hourly rate.
• First, though, you’ll need to know your baseline salary goals and business expenses.
• It’s good practice to check-in often on your competitors and not just when you’re first deciding on your pricing model, especially if your industry evolves frequently.

Do you charge hourly after the standard deliverables, or maybe include a specified number of support hours as a line item? Harrison, fees can certainly be different based on where you live. 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. With a monthly retainer, you’re working with & billing your clients every month.

Consultant Gender Demographics

This answer varies for everyone, so you’re not going to find a golden number anywhere. You have the expertise or a skillset that your clients need. Your value is long-term financial gain, removing annoying roadblocks, revealing business-changing insights, creating ongoing traffic, and more. It’s not just the time you put into consulting—it’s the results of the consulting.

Averages don’t take into account your value, the scope of work, client perceptions, or even your cash flow. 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.

How Many Consultants Have Retainer-Based Work

Average IT consulting industry rates range between $50-250/h, depending on the consultant’s tech expertise and location. IT consultant rates often depend on location, company size, experience, and many other factors.

Remember, you are charging based on the ROI you will create. Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night , you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado. The conversation about rates happens with every client, sometimes more than once.

When to Charge an Initial Fee Plus Monthly Retainer

A performance deal is where you are paid based on the performance of your work. Value-based pricing is a hot topic in the consulting world — and for good reason. 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. You’ll have to improve your sales skills, accounting skills, project management skills, and more.

If you consult clients for diversity training, you can charge between $150 to $250 per hour. HR consultants can charge between $50 and $150 an hour. 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. 75.15% of consultants we polled are male, and 25.8% are female. 23% of consultants polled have been consulting for 1-3 years. Here are the demographic data from our list of 30K+ of independent consultants and small consulting firm owners.

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

It is important to keep in mind that the above analysis from Consultancy.org presents a simplified and indicative view of rates. Differences in for instance firms, market segments and service offerings across regions and countries will inevitably lead to exceptions to the typology. With these factors in mind, you can start building the framework of the consulting rate you’d like to charge.