It still shocks me that I didn't run these numbers until *after* I had quit my consulting job and decided to start my own business. And I'm a finance nerd who loves nothing more than a good Excel model!
Your earnings will obviously depend on many factors. But this simplified illustration is like a punch in the face that wakes you up to the reality that you can earn a lot more working for yourself than for a professional services firm.
The specific rate that you can command will depend on your market, your experience, your unique skills, and the value clients place on your services. It will also depend on whether you plan to work with clients in the private, public, or not-for-profit sectors.
$100-$200 might be realistic when you're starting out, or if you offer services that are relatively common in your market. If you're coming out of a Big 4 firm you may be able to leverage that brand recognition to aim higher.
You can charge higher rates ($200-$300+) if you offer strategic advice to executive-level clients, if you lead large-scale, complex projects, or if you have highly specialized and in-demand skills.
This isn't to say you have to charge by the hour - there are many ways to structure your fees. You could also explore value-based fees, fixed fees, retainers, or day rates. The purpose of the table above is just to get you to see you can easily make more than your current consulting firm salary, even in the first year of your business.
Want to find out how you can work less but earn more? Check out my Coaching page to sign up for my accelerated coaching program, Take the Leap.
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