I see many people enter the World of management consulting with quite unrealistic expectations of potential incomes.  OK, I was very lucky when I started out, but 95% of ‘new’ consultants have a tough time at first.

management consultant income

The typical scenario goes like this.  The ‘would be’ consultant has decades of experience in their chosen field.  They then lose their job in a large corporate, maybe as a result of a management restructure.  And the ‘natural’ next step for them is to go it alone and start their own consulting business.  And that’s where it all starts to go wrong.  Why?  Let me explain.

You see the skills required to run your own consulting business are quite different to that of a corporate manager.  Sure the people skills and business understanding transfer very well.  As do the technical skills.  But that’s really only half the picture.

You see to make it on your own; you also need a vast range of other business skills, or the ability to hire others to carry out these functions for you.

Let’s assume you already have the technical / professional skills.  You might be an engineer, an architect, a tax advisor or an HR expert.  OK, you are half way there.  Because thousands of other professionals in your market also have those technical skills.


The skills that will ensure your success in establishing your own consulting firm are these:

  1. Being able to sell your services in a face to face situation.
  2. Being able to find good quality sales leads.
  3. Being able to market your services to a suitable target market.
  4. Being able to manage the client relationship.
  5. Being able to identify and ‘on sell’ additional services to existing clients.

Are you starting to get the picture yet?  Success is all about your sales and marketing skills, not your technical skills. You need the technical skills to even consider starting your own consulting business.  But it’s the sales and marketing skills that will ensure your success.

OK, so the title of this post is Management Consultant Income.  Here’s the point.  You are probably coming from a corporate salaried role, with all the necessary support around you like Sales, Marketing, HR, Finance, IT and the like.  When you start consulting on your own, you will have none of that.  So you need to take time out of your available ‘client hours’ to do all that.  Non billable time.

The second key point is this.  You cannot expect to be billing client work at 100% utilisation.  If you have for example 60 available hours in the week for client work, you can’t expect to get paid for those 60 hours.  Not only must you allow for all the sales and marketing time you need along with carrying out other key business functions, but client work will ebb and flow.  It will come at you in big ‘chunks’ and then not at all for a while.

Those new to consulting rarely appreciate this, thinking that they will have a wave of client work and be working 5 days a week for their clients.

The reality is, that if you reach 65% utilisation rate, that is, 65% of your available time is being spent on paid client work, then you are doing really well.

So how much can an independent management consultant earn?  It’s now not hard to work out is it?  Let’s say you have 220 available days per year, taking out holidays and weekends and sick days.  65% of that is 143 days.  What do you think your charge out rate will be?  To keep the numbers easy, let’s use $1,200 per day.  So your potential income, assuming you have the sales and marketing skills, will be $171,600 per annum.  Out of which you will be paying all your business operating costs and taxes.

How does that stack up with your corporate salary?

Earning double that and more, is the real secret to starting out in management consulting …


Rob O'ByrneBest Regards,
Rob O’Byrne
Email: robyrne@logisticsbureau.com
Phone: +61 417 417 307