How Does One Increase the Amount they Charge in Consulting?
I've been talking to some of my friends who are independent consultants who are making crazy amounts of money for daily charges from their clients. It reaches a range of around 2000-2500 bucks. What do you guys think? How easy is that? I'm sure you have to be in that niche within the market in order to make that amount of money.
This is a SPAM LINK that I've read about it; however, I'm not too sure about the possibility of this. I would love to hear what you guys say about it.
Best.
Mod note: If you are going to post links to your blog, please do not be disingenuous about it. You have been warned! -IlliniProgrammer
It depends on how experienced / senior they are, and whether they have unique expertise.
MBB charges 2500 - 4000 / day for people 0-3 years out of their MBA, but that includes all of the overhead / benefits you get from working with a big firm.
If you're credible, reputable, trusted and established...or just plain good at selling, you can charge whatever the hell you want.
A professor told me $500 an hour is the going rate.
For what kind of consulting? What kind of expertise?
I honestly wouldn't be surprised at any number - some of these "consultants" I interview through GLG (for example) charge $400+, and a lot of them are full of shit.
My professor said $500 an hour for management consulting. I have nothing to do with consulting and I do not plan to go into it. We were just having a conversation about promising careers. Basically what he meant was if someone couldn't find a job and they had an MBA they could set up their own shop and charge that price. Therefore, no experience and most of what that person would be doing is probably shit, but if you can sell your services why not?
That seems low for an established consultant.
With no experience, in the Big 4 (in a niche group) I was billing out at $225/hour. At that point in time I was completely useless. Obviously the brand name you're tied to can allow you to charge more, but if you have an established track record I'd assume a minimum of $250/hr for a credible consultant.
If you can sell it, that's great, but I think charging $500 is unrealistic. You can pay MBB $300 an hour, and that comes along with all of the resources they bring to bear - which is what really differentiates from the random-ass MBA consultant.
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MBB pays you for every day you sit at home. As independent with no valid experience, goodluck with that.
If people are paying independents fresh from their MBA's $500/hour consistently....boy do I live in the wrong place. My billable is $235 for my firm, and with a B.Comm + 3 years in my field I would still probably be able to pull $100-150 consistently 20-30 hours a week all year (assuming about 25% of my time is business development).
The only reason the clients pay the firm this sort of money for someone like me is because I have access to the sort of work of partners and directors etc. who do have the experience. If I have a problem, I can reach out to them, leverage prior work as starting points, talk to economists and financial modelers etc.
I guess all I'm saying is as an independent I'm worth far less than I am now, being able to use all the resources the firm has.
When I was a fresh grad I was cocky about what consulting was, and is...and I was pretty damn ignorant of what it is like. Most of the independent consultants are more subject matter experts than actual consultants, but everyone wants to be a consultant these days. (I moved from being an industry SME to consultant, and the difference is pretty stark).
PS - I know an independent who does what I do (30 years experience consulting /industry) and he managed $10k a day from a client for 15 days. All because they really wanted him, and he picked a number he thought they would never pay.....they called his bluff. So, people will pay what they think you're worth.
At big 4 consulting, the rates are £200 for an analyst, 0-2 years experience, £300 for the next rank up, capping up at around partner which is £650 an hour, x 1.4 for your monopoly money conversion. There are about 6-7 intermediate steps between the 200 and the 650. Recovery of this is not always 100%, but often is.
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