How much do McKinsey, BCG and Bain charge clients for a consulting case?

Our new survey reveals exactly what high-earning consultants are charging and how you can set fees confidently to amplify your revenue. Working “at scale” and impacting a larger number of people or directly supporting the revenue goals of a business tends to generate a lot more, which justifies a high consulting rate too. You can take advantage of this kind of deal once you have tested a consultant after a month or two, or once you have already covered the entire scope of the project.

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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.

Factors Influencing Consulting Industry Rates

Don’t get stuck doing massive amounts of work for less than you’re worth—it’ll impact your work, happiness, and your client’s future expectations. The number of respondents who worked solely as independent consultants in the calendar year 2020 continues to decline. After peaking at 48.6% in 2018, it has declined steadily to 36% this year. The top three client areas were private sector (non-defense or utility) at 58.8%, defense (private and government) at 11.9%, and utilities at 11%. Those with a Professional Engineer’s License (P.E.) experienced a $15 hourly advantage over those without a license (up $5 over the past two years, but down from the $22 hourly advantage in 2018). Nurture and grow your business with customer relationship management software.

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. To maximize the profitability of your consulting projects, create a clear outline of the various tasks included within a project, and estimate the amount of time it will take you to complete each one.

Best Gifts for Small Business Owners

By charging a fair price, you not only ensure that you’re making a good income, but you also show your clients that you’re worth their investment. Keep these things in mind when establishing your fees, and you’ll be able to charge what your services are worth. Lastly, Independent Contactors contains the large group of self-employed consultants active in the industry.

Differences in firms, market segments and service offerings across regions and countries, for instance, will inevitably lead to exceptions in the typology. The figure uses the revenues pe consultant per annum as a proxy for average rates and the number of consultants as a proxy for firm size. This calculator provides a great starting point to help you figure out how much much to charge in order to make the amount of money you want each day, month, and year. The consultants who charge the highest fees are lawyers, finance, and tax professionals. Because they have unique and specific expertise that is rare. So, you might not be a copyright lawyer or investment consultant, but think about where your expertise is rare in your field.

How Many Employees Consulting Firms Have

If you use an hourly or daily rate, your clients might be unsure how much money they’ll owe at the end of the job – you won’t know either. My first project as a consultant lasted 3-months for $70K. But in 2016, I had no idea how to run my consulting business. Chances are that you’re not the first consultant your client has hired.

That said, some consultants are only available for retainer arrangements – given the fact there is the initial investment in exploring the business and its needs, a long-term commitment may be necessary. According to SBA, the hourly rate is taken from dividing the former salary by 52 work weeks and then dividing that number by 40 or the number of regular work hours in a week. Often, when consultants charge by the hour, they base their pay on how much they were getting from the company they used to work for or still work for on an hourly basis, with a little markup.

Fees, fees, fees: How much can I charge as an independent consultant?

Remember that to get better clients and grow your firm, you need to value yourself properly. This means that you should not price your services too low. This will show people that you do not think your talent and experience are valuable. A higher hourly charge covers any gaps in a genuine consulting strategy. You’ll also need to include any other expenses your employer has previously paid, such as healthcare, vacation days, sick time, and a 401(k) plan.

  • The best model for you depends on how you deliver your consulting services (and your personal preference!).
  • Your ceiling rate is based on how much your work is worth to your client.
  • Keep in mind that you don’t need to make quarterly tax payments unless you expect to be taxed more than $1,000 in a year.
  • The scope of work should be a large determinant of your rates, but pricing per hour or project is challenging to estimate.
  • When you’re starting as a consultant, one of the most important decisions you’ll need to make is what to charge your clients.
  • Differences in for instance firms, market segments and service offerings across regions and countries will inevitably lead to exceptions to the typology.

The conversation about rates happens with every client, sometimes more than once. Sometimes it’s pleasant, sometimes it’s awkward, and sometimes it’s ugly. However, remember that this kind of pricing still excludes the true value of your work. If you’re performing business-altering work, that has a financial price tag to it, as well. This step can be tricky for new consultants, so this is where industry averages come in handy.

Summary of Our Key Findings on Consulting Fees

If you don’t speak, the conference may or may not fill those seats. If you want to take time off – and you should – that must be budgeted as well. In the example above, I removed 80 hours of billable time, or two weeks’ vacation. Live in a nation where there are minimum requirements for time off?

average consulting rate

It may take some time to build up that confidence, but be wary of undervaluing your services as you build that belief in yourself. 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.” Ever wondered exactly what other coaches are offering, and ​for how much? Find out if you’re charging too much or too ​little by benchmarking your own rates with this free report.

Social media consulting rates

They may save on employee hours, make more profitable decisions, and more. Average marketing consultants charge at least $100 an hour but can charge upwards of $1000 per hour depending on the type of marketing they help clients with. Consultants don’t have the same payment terms as coaches or some types of freelancers. Coaches can average consulting rate usually charge upfront for a set number of sessions or charge for individual sessions. But consultants who work with businesses — especially large corporations — usually need to adapt their payment terms for this industry. By following these tips, you’ll be able to negotiate consulting rates that work for both you and the client.

average consulting rate