Quick answer
Confirm target income, billable hours, costs, tax, margin, market rate and payment terms one by one. Consulting rates often exceed execution rates because they include diagnosis/strategy/risk.
Why it matters
Miss one input and the price is wrong.
Outcome/project pricing has more upside.
Step by step
- Set a target annual income (keep pre/post-tax consistent).
- Add business costs/tax/insurance/gaps/margin.
- Calculate real billable hours per year, then divide to get the floor hourly rate.
- Calibrate with market/peer/closed-deal data; don't reverse-engineer a low price.
- State scope/payment/revision limits/rush fees in the quote.
Common mistakes
- Assuming 40 hours x 52 weeks are billable.
- Omitting tax/software/insurance/gaps/bad debt.
- Copying a competitor's low price without covering costs.
- Letting scope creep go unpaid.
Checklist
- Target income/costs/tax/margin confirmed.
- Billable hours reduced for gaps/admin/sales.
- Hourly/day/project rates use consistent assumptions.
- Market rate cross-checked.
- Quote includes scope/payment/revisions/rush terms.
Key facts
- Outcome/project pricing has more upside.
- Don't sell consulting as unskilled hourly labor.
FAQ
What should I check before setting Consulting rate?
Confirm target income, billable hours, costs, tax, margin, market rate and payment terms one by one. Consulting rates often exceed execution rates because they include diagnosis/strategy/risk.
How long does it take?
Usually 1-3 minutes; for intermittent issues, run 30 seconds and retest elsewhere.
Is data uploaded?
Runs locally and does not upload video/audio; extensions may still read the page.
Source: Consulting Success