Coastal and urban-based consultants can command premiums up to 25% higher than their suburban, Midwestern and Southern counterparts, says Conners. Not surprisingly, the more specific and valuable your expertise, or the more name recognition you have, the more you safely can charge. If you’ve written a book or have worked with a marquee customer, sell it. The first step may be difficult for inexperienced consultants, so this is where industry standards come in useful.
- Feel free to look at consulting rates by industry, but don’t use them as your bible to pricing—use them as another data point to reference.
- They may save on employee hours, make more profitable decisions, and more.
- In the U.S., small business consulting fees range from $95 to $1,500, with an average cost of $399.
- Millions of companies use Square to take payments, manage staff, and conduct business in-store and online.
- Let’s dive into our first consulting fee formula, which is an easy option for beginners.
Clients are often willing to pay a premium fee for consultants who’ve demonstrated expertise in their industry. With a monthly retainer, you’re working with (and billing) your client on a monthly basis. Learn what consultants across every niche are charging per project, how they structure retainer deals, and what’s holding you back from earning more.
Experience
However, there’s more to being a consultant than just offering consulting services; you need to take in all that experience you’ve built up and add a price tag to that too. Your consulting rates aren’t just a transaction of services you offer but also all the knowledge you have that customers can’t get from anybody but you. We don’t necessarily recommend charging by the hour, but you may want to structure your pricing this way if your consulting work involves meetings and a lot of in-person work. Determining an hourly rate is also an important part of calculating per-project or retainer rates, allowing you a baseline to work from.
There are a lot of things to keep in mind when you create your consulting rate. It can be tricky to balance all of the factors we’ve outlined above, but there are a few steps you can follow to ensure an optimal pricing structure for you and your client. For companies just getting started, a business plan is the perfect place to begin. With professional assistance and consulting, new business owners can map out their success strategy with a seasoned pro who will help them determine their goals and how to accomplish them. Business plans can be created to target different goals, such as gaining investment funding, preparing for loans or branching out into a new market or specialty.
How to Calculate Per-Project Consultant Rates
With this in mind, you can determine typical consultant rates — what companies pay consultants for their hours, days, projects and expert opinions. Note that your personal experiences and background may influence how you go about setting your rate. The time and money you invest in finding small businesses that provide consistent income will need to factor into your rate. Alternatively, you want to ensure you can easily afford your living expenses. If you have three clients paying your hourly rate once a month, that’s only three hours of work on paper.
Large corporations tend to hire niche consultants for areas of expertise outside their own comfort zone. Think of integrating a specific technology or implementing an innovative marketing channel. Digital transformation is a big aspect for many who have primarily positioned themselves locally, including print and billboards as marketing instruments. Niche industry expertise can be truly invaluable when choosing a business consultant to partner up with. Since we serve clients across 17 different time zones in a team of 50+ people, that’s important.
Join 38,877 subscribers making clients happy and growing their business.
Consultants bring up their fees at different stages of the pipeline. Value pricing is a hot topic in the consulting world, and for good reason. 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. Notice how we lead with Option 3, the highest-priced option.
I recommend rounding up to the nearest $5 or $10 multiple, because a $78/hr or $117 fee looks odd. And while that may work for certain big box discount stores, it’s probably not the approach that will work for independent consulting. Browse profiles, see prices and use filters to find pros who match your project.
What a Retainer-Based Approach Can Do for a Consulting Business
When you’re starting as a consultant, one of the most important decisions you’ll need to make is what to charge your clients. This can be tricky, especially if you don’t have a lot of experience setting rates. The market rate refers to the average price of the market or what the customers usually pay for certain products or services. While this does not serve as a mandatory ceiling on your prices, determining the market rate is crucial in structuring consulting fees. As a rule of thumb, some consultants simply take the hourly wage (plus benefits) that they would earn when working on salary for someone else and double or in most cases triple that amount.
The freelance job that pays the least is Data Entry Clerk ($13/hour). The most profitable industry is the Legal field, with all 5 average consulting fees per hour 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).
Discovering what your competitors are charging
However, the table provides a general idea of the ranges that can be expected. In particular, I’m a huge fan of the “Ask Me Anything”-style hour-long consultation. My office hours program is in this model and it’s a wildly successful way to build trust with new clients. People can pay a flat rate and get good advice without sales for an hour.
Some of my clients allocate annual budgets and plan their consulting sessions accordingly. Arranging an annual contract with a fixed number of hours per month is a good justification to introduce a discount for the work. Moreover, in case of larger contracts (such as training courses or the like), buying a bulk of hours at a lower rate may be an option as well.
What are consultancy fees?
It comes down to what the market will bear and what your competitors are doing. If you fall in line by charging the same as everyone else, you’re signalling that you’re a worthy (qualified) consultant who plays fairly. You’re also making sure you get the base line rate for consulting in your market. Despite your best intentions, not all your clients will pay you. Some will take weeks or months to pay, but a small percentage will never pay the bill.