When starting a consulting business, it is essential to understand the price range for services. The most reliable way to determine your rate is to research your competitors and their prices. A profit margin between 25 and 30 percent is considered acceptable, but not excessive. This should be added to the estimated hours your customer will need, so you can determine how much you should charge per project or advance.
Large consulting firms usually add a minimum margin of 30%. As an independent contractor, you should be on the same line or a little lower than them. Consultants have the potential to generate unlimited revenue, which is one of the reasons why they start their consulting business. Pricing consulting services is one of the most challenging aspects, whether you are a new consultant or have been in the game for years.
Most large publicly traded companies have an absolute minimum margin of 75% in non-salaried and contract labor, and a margin of 200% in “bank” and salaried resources, with some going up to 300% for “niche skills”.I recently joined a specialized consultancy (a small team over 50 years old) that is part of an international consulting and advisory organization. To get more revenue from your company, it is important to understand what consultants do with their consulting fees.
