Notice that you might be working 40 hour weeks, but you’re not necessarily available for all that time. It’s important to remember that different clients have their own preferences, and that negotiating with some will be easier than with others. Some clients may have extensive experience working with consultants, while others will seek you out as their first consultant. Your responsibility will be to research your clients in advance and get a clear sense of their needs, and be willing to listen and negotiate when needed. Because as a consultant, you are responsible for covering expenses such as health insurance, sick days, and office space and equipment that your employer would normally cover. Strategy Boutiques, high-end firms that have a national/regional focus, follow in terms of rates.

Chances are that you’re not the first consultant your client has hired. Once you have the industry rates and a firm feel for your own worth based on your knowledge and experience, you can further adjust your rates by looking to your competition. This includes tangible qualities like the specific services you’re providing, your level of expertise, and any industry certifications or awards that verify that expertise. It also includes intangible qualities like your flexibility, adaptability to your client’s needs, responsiveness, and ability to meet deadlines.

Don’t miss billable hours anymore!

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. That 40% markup would cover the cost of your expertise and business expenses like overhead, benefits, taxes, and more. These costs are different for everyone, depending on tax status and type of business. Once you have a better grasp of the amount of work required, you’ll be better able to set your rates.

• Instead of altogether rejecting the client (or the client rejecting you), steer the client towards negotiation.
• Three types of firms find themselves in the consultant revenue range between $150,000 (R1 million) and $220,000 ( R3 million) per year.
• At the very least, seek a base rate plus performance pay or share of ownership.
• However, the major drawback is that it can be challenging to define metrics that reflect the effort involved in a particular project, task, or job.
• Setting your consultation fees is the best and worst part of running a consulting business.
• Because as a consultant, you are responsible for covering expenses such as health insurance, sick days, and office space and equipment that your employer would normally cover.

Here are three action items for you if you’re serious about raising your rates and increasing your revenue. There are many different reasons why consultants aren’t raising their fees despite wishing to do so. And 21% of consultants are not actively looking to increase their fees.

Average IT Consulting Rates by Industry

Three types of firms find themselves in the consultant revenue range between $150,000 (R1 million) and $220,000 ( R3 million) per year. The Small and Mid-size Technology Players tend to have comparable rates, yet vary in size, ranging from small http://holmi.ru/workshops/?action=show&id=4714 local players to large mid-sized firms with thousands of employees. The category Mid-size Global Accountants refers to the top 20 global professional services providers, excluding the Big 4, such as BDO, Baker Tilly, Grant Thornton, RSM and PKF.

Your consulting business can charge an hourly rate to manage your fee structure easily. With this model, you’ll record the number of hours worked and invoice based on your hourly rate. The hourly pricing model allows you to bill only for hours worked.

Finding the market rates for your industry

Terms and conditions for rate and coverage may vary by class of business and state. Don’t compare yourself to the industry thought leaders who were featured in Forbes (unless you’re one of them!). At the same time, don’t undercut yourself simply because you’re new at this. Since consultants tend to round to the nearest $5, our example results in $115 per hour rate.

These IT companies have from 2 to 10 consultants, including a CEO, and cooperate with startups, small businesses, and mid-size regional businesses. As you work with more clients, keep track of how long it really does take you to perform these various tasks, so you can get better at setting these rates moving forward. Let us know in the comments section or via the IC-Hub Google and Facebook groups (IC-Hub members only).

IT Consulting Hourly Rates in 2023: Full Price Comparison

For instance, the USA holds the highest IT consulting rate—$100-$250 per hour compared to $50/h for the same service in Estonia. You pay a monthly fee in advance to have consultants on your team anytime you need them and ensure they help make the right decisions during some risky project. One of the issues with hourly rates is that you don’t know how much you’ll pay in the end. 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.