Small Business Consultant Hourly Rate – Whether you are a new consultant or have been in the game for years, pricing your consulting services is one of the most challenging aspects.
After spending over 2 decades helping advisors increase their fees by 30%-400%+, we have the data on what works – and what doesn’t.
Small Business Consultant Hourly Rate
However, if you have developed deep expertise in your field, we do not recommend using the hourly billing method.
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Step 1. Open Google and search for the average salary for your position. Write the number down.
For work weeks per year, enter “48” (or however many weeks you want to work, minus the number of weeks you want to take off).
Example: A salary of $98,000 equals a monthly salary of $8167, a weekly salary of $2042 and an hourly salary of $102.
Eventually, you will reach a point where charging by the hour is no longer the best method for you or your customers.
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One of the problems with the hourly method is that your client feels uncertain how much he will pay you in the end. And uncertainty surrounding a project will prevent your client from moving forward.
The project-based method is a powerful pricing method for beginning and intermediate consultants. It’s a bit more complicated than the hourly method. But it removes a lot of the uncertainty around hourly billing. Your customer knows what he is paying in advance.
Use an app like Toggl to track the time you spend on each product. If you don’t know the exact number, estimate. Add another hour or two to be sure.
If you don’t feel like you’re fully compensated for the value you provide, you won’t do your best work.
Avg. Small Business Consulting Fees (with Price Factors)
If you are a more experienced consultant with 2-5+ years of experience, we recommend moving to a more highly leveraged pricing model such as value-based pricing.
Value-based pricing is when you price your services based on the tangible and intangible value you create for your customer.
You charge based on what matters most to your client = the results and outcomes you create for them.
The value conversation is where you ask your client questions to find out where they want to be – and agree on the value of a successful project.
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They tell you they won’t have to stress about pay and can enjoy working on things they really enjoy.
If you are stuck on the next step of calculating the tangible value, ask the customer more about the intangible value. Tangible value is often hidden deeper than intangible value.
Example: Payroll printing takes at least one hour of the CEO’s time, that’s hundreds of dollars a day wasted on this printing.
For example, if you help Acme Financial Services win 3 new clients per month, you will help them create:
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Ask the prospect if $117,000 in revenue means the project was a success. They will agree that you are using their numbers.
For example, completing the project will make the CEO’s life much easier – she wants to focus more on managing the business instead of stressing about salary.
For example, if your service helps your client increase their income by 5% – and it will continue for another 2 years – you can calculate the YoY growth in your price.
With any value-based pricing, you want to create a 3-10x ROI for your customer. Remember, you charge based on the ROI you generate.
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For example, since the successful completion of your project will result in $117,000 in new revenue for your client, you can calculate different levels of ROI.
This helps you leverage the anchoring bias: the first price they see determines how they see the rest of your prices.
Instead of “suggesting” your client, you collaborate with the client in various ways to help them achieve their goals.
For an in-depth look at value-based pricing, check out our article: A Guide to Value-Based Pricing for Consultants: 10 Experts Share Their Fee Strategies.
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And if you’re looking for hands-on training to implement value-based pricing in your consulting business, check out Clarity Coaching’s training program.
If you feel that something is holding you back from competing with your consulting rates and earning the revenue you want in your business, this study is for you.
You will learn how consultants set their rate, how much consultants earn per project, how many consultants use retention and performance deals, and much more.
Read on to learn what consultants do with their consulting fees—and learn how to earn more revenue in your business.
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This is one of the best ways for consultants to gain leverage and increase their profits without spending more time on the job.
13.88% of consultants never price their services based on value because they are satisfied with their current pricing structure.
Example: Your client is currently making $100K per month. You help bring them to $200k per month. With a performance contract, you charge a percentage based on the additional value you create. So if you and the client agree on 10% of the added value, you will make $10K per month on the project – in addition to your base salary.
With a monthly retainer, you work and bill your customers every month. This means there is recurring revenue.
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Recurring income can provide a greater sense of security because you know you have predictable income each month.
Productive consulting is when you take your service, strip it down to its basics and give it a fixed scope and price.
If you want to build a predictable, profitable and scalable consulting business with premium pricing, our new Consulting Fee Multiplier Mini Course is for you.
Lowering your commissions to get clients is never a good idea. This sends all the wrong signals to the customer about the value you can add to their business.
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We polled our list of 30K+ advisors for the latest insights into the finances of small consulting firms.
With the right strategy and mindset, consultants can earn five or six figures—or even more—per month.
We always ask our list of consultants to tell us about other aspects of their business. This helps us break down the numbers even further.
Below is the demographic data of the 30K+ list of independent consultants and owners of small consulting firms.
Average Consulting Rates By Industry In 2020 [infographic]
If you want to grow your consulting business, hiring employees or contractors can be a great way to do so.
In 4 steps, you will learn your daily billing rate and your ideal hourly rate so you can reach your target income.
This is an invaluable tool to help you understand how much you should be charging your customers.
However, we encourage you to move up to greater leverage – away from charging based on your time. Here’s how you can do it:
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Value-based pricing is becoming more popular. In 2018, 12% of advisors used value-based pricing. In 2019, 17% percent of advisors use value-based pricing.
Consultants earn more per month. In 2018, 24.3% of consultants earned $10K-$45K per month, compared to 29.09% in 2019.
Here are three action items for you if you are serious about raising your rates and increasing your revenue.
Our momentum program is designed for new consultants who want to follow a step-by-step system to predictably and reliably reach 6 figures per year or more.
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Our Clarity program is designed for consultants who are committed to maximizing their value and pay through personalized coaching and a more advanced pricing strategy, marketing systems to generate consistent leads – to grow and expand their business.
Whether you’re struggling to price your services based on value, want to build more recurring revenue, or want to know how to structure an equity deal properly, our programs will help you balance your pricing with confidence.
More importantly, how will you use this information to increase your value, raise your prices, and reach your target income?
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Any cookies that may not be particularly necessary for the website to function and are used specifically to collect the user’s personal data through analytics, ads, other embedded content, are called non-necessary cookies. User consent must be obtained before you can enable cookies on your site. Average Business Consultant Salary $87,214 Annually To make our salary estimates, we start with data published in publicly available sources such as the U.S. Census Bureau. it. Bureau of Labor Statistics (BLS), Foreign Labor Certification Data Center (FLC) show more
The average salary for a business consultant in the United States is $87,214. Business consultant salaries typically range from $64,000 to $117,000 per year.
