By: Lindsay Angelo, Strategy and Foresight Consultant, MBA, TEDx Speaker
The job market is undergoing a remarkable transformation. The gig economy and remote work have opened up a world of opportunities to thrive as an Independent Consultant. This is why independent consulting has emerged as one of the most prominent and empowering career paths in 2023.
Independent Consulting aligns with the changing demands of the modern workforce and presents an opportunity for individuals to embrace autonomy, balance, and personal growth. As a consultant, you're at the forefront of this transformative shift, offering your specialized skills and expertise.
As an independent contractor offering consulting services, you have the freedom to choose projects that align with your values and passion while driving financial success.
Let's explore how you can set your rates with an eye on both making an impact on your clients and profit at the same time.
Factors Affecting Independent Consultant Rates
As you embark on your purpose-driven consulting journey, remember you no longer think in terms of average salaries or annual salaries. You think in terms of rates. And rates are determined by a number of factors, including experience and expertise, industry and niche, and sometimes even location.
Let's dive deeper into each:
Experience, expertise and skill level
Your experience and expertise are your greatest assets in creating transformational change. Generally speaking, the more seasoned you are, the higher the rate you can command. In fact, senior consultants with a myriad of successful projects under their belt can command some serious income! The call to action? Work on honing your skills and becoming an expert in your niche, whether you're in healthcare, software, brand strategy and marketing, IT, artificial intelligence, project management, futurism, software development, strategy consulting, you name it!
This will allow you to position yourself as a rare and invaluable partner to your existing or potential clients, justifying higher rates.
Bear in mind that in the skills arena, your strategic thinking and problem-solving game play a big role in your independent consulting business. If you're a powerhouse at strategic problem-solving, clients tend to be more than happy to loosen their purse strings. Learn more about strategic thinking here.
Industry and Niche
Having valuable skills in a hot niche, such as being a sought-after IT consultant, an AI consultant, a futurist consultant, or a software development project consultant, not only sets you apart but also drives client satisfaction. According to research, average consulting fees can average $80 to $1,000 per hour for highly specialized skills/niches. Positioning yourself in a hot niche that's in high demand will drive you toward the higher end of that spectrum. Businesses are willing to pay top dollar for independent consultants with specialized skills that are in demand.
Location
Another factor to consider is location. Different regions come with different costs of living and rate norms, which may impact your rates. What might be the norm for marketing consultants in an urban city center might be a splurge in a smaller town. It also impact travel/business expenses, communication equipment, and other actual costs of engaging. As a consultant, adjusting for location is fully your choice. Some set their rates to be location agnostic. It's up to you, but it maybe something worthy of consideration.
Researching and Determining Independent Consultant Rates
As Independent Consultants, research can be a superpower. When setting rates, one way to help gauge is to look to the market to determine what the "water level" is. Do your homework! Check out daily rate surveys and industry salary reports. They'll provide a sense of the average consultant fees out there. It also helps to network! Gather insider information from other experienced consultants who've been around the block. You'll be surprised at how much insight and advice they can offer regarding setting your rates.
However, a more powerful pricing model to consider is one that's become standard in recent years—a value-based approach to pricing. This means aligning your fees with the positive impact you intend to make. This pricing model reflects the fact that clients are not so much investing in your time as they are in the transformative outcomes you bring to their businesses. Consider the 10X rule—ie. the value you deliver should be 10X your cost.
By combining research, networking, value, and industry knowledge, you'll be well-equipped to confidently set your consultant fees.
Consulting Fee Strategies: Setting and Negotiating Independent Consultant Rates
When it comes to the fee structure, keep in mind that it isn't just about the dollars; it's about the impact you create. Advocating for fair compensation isn't just for yourself but for the greater purpose of empowering your ability to make a difference. Here are some tips to apply:
1. Your fee structure should be about understanding your value proposition, not relying on any consulting fees calculator. What unique skills and expertise do you bring to the table? Clearly communicate the profound impact you aim to achieve for your clients, and let that become the foundation of your fee structure.
2. You have a choice when it comes to structuring your rate type. You can set project-based fees (concurrent with the value you deliver), monthly retainers, or even hourly fees if you prefer. As mentioned, in recent years, value based pricing has started to become best practice as it creates a win-win for both you and your clients!
3. Consider the client's budget. Sometimes clients have a set budget they're working with. Ask this question upfront to determine what you're working with. This empowers you to be able to scope the budget—in other words, craft a proposal that meets that budget.
4. Consider the macroclimate and your current pipeline. Macro conditions fluctuate, as does your pipeline. Considering both of these as you set your rates will help set you up for success.
Balancing the above factors will help you arrive at a rate that keeps both you and your clients happy.
Positioning Before Pricing
Determining your worth in independent consulting goes beyond setting competitive rates. You must first understand your value proposition—be an expert in your niche and clarify your service offering in order for potential clients to distinguish you from the rest. As you navigate this landscape, confidently communicate the impact you aspire to achieve, and let this clarity guide you in setting your fees.
Training and Development Resources for Independent Consultants
The best piece of advice we can offer in setting your rates is: never stop learning! Invest in your professional development. There are unique training programs offering industry certifications, workshops, and online courses out there to keep you sharp and ahead of the game.
Consider enrolling in a specialized training program such as our Permissionless Consultant Accelerator to guide you through the purpose-driven consulting practice. Delivered by a Fortune 500 consultant and Global innovation leader, this will deliver everything you need to kick-start your own independent consultancy and more.
Continuing to learn and grow is the heartbeat of your success. Embrace professional development opportunities that align with your values, ensuring that your skills and impact continue to flourish!
Frequently Asked Questions (FAQs)
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As a Consultant, your superpower lies in your critical thinking and strategic problem-solving skills. Clients will rely on your expertise and practical knowledge. This type of thinking will allow you to tackle complex issues and make business decisions that have direct impact on client projects. Whether they have a general direction or need you to kickstart the discussion, your strategy skills—especially your problem-solving skills will be in high demand. To excel in problem-solving, it's crucial to grasp the MECE (Mutually Exclusive, Collectively Exhaustive) framework and issue trees.
Learn more about MECE framework and issue trees here. Looking for a more immersive experience? Enroll in our Strategic Thinking Masterclass now.
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Determining consulting rates depend on several factors, including your skill level, market demand, industry standards, and the value you deliver to clients. It's a critical step to research market rates—hourly rates, or project rates for consultants in your field. It's also important to consider your experience and unique offerings, and assess the specific needs and budget of your target clients when setting your business consulting fees or rates.
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The Consultant Accelerator is suitable for individuals aspiring to become business consultants, such as corporate professionals, entrepreneurs, senior managers, project managers, current freelancers and advisors and those interested in exploring a new career option in a variety of industries. The Accelerator caters to individuals from various backgrounds and level of expertise, offering the expert perspective—knowledge and strategies needed.
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There are several online resources available on how to become an Independent Strategy Consultant. Consider joining our Permissionless Consultant accelerator to learn the ropes! Or read our blog post here for more information.
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In the independent consulting realm, effectively selling oneself and showcasing valuable consulting skills is critical to success. It's essential to actively market your expertise and competencies to acquire clients and improve speed to market—don't stick to handing out business cards and sending generic emails—it can be a waste of time.
Crafting a compelling personal brand, leveraging SEO and social media can make a significant difference in attracting clients. Offering additional resources such as webinars and ebooks to consulting clients can also demonstrate knowledge and build trust as can speaking.
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The world is your oyster when it comes to positioning yourself as a consultant. There are many types across all niches—strategy consultants, foresight consultants, management consultants, education consultants, leasing consultants, international development consultants. You may also have expertise in healthcare software and technology or business development process. Some refer to themselves as Consultants, others will call themselves an Independent Contractor. Consultants exist in every niche—you can even create your own niche if you wish.
ABOUT THE AUTHOR
Lindsay Angelo is the founder of Permissionless Consultant, supporting purpose-preneurs in launching their practices to create impact, freedom, and a life they love.
She's also a practicing and award-winning Strategist, Futurist, MBA, and TEDx speaker. She launched her foresight and business strategy consulting firm six years ago with the goal of helping purpose-driven brands and business owners drive growth and impact.
Since then, she's more than tripled her prior earnings while advising entrepreneurs, think tanks, celebrities, and Fortune 500 companies—all the while creating a nomadic lifestyle rooted in travel, family, and community.
Named a Woman to Watch and Global Innovation Leader, Lindsay has delivered over 100+ keynotes and is the creator of a signature blueprint for driving brand growth and impact.
A born entrepreneur, former NCAA athlete, and wellness warrior, she sits on the Advisory Board for World Business Research. She contributes to a variety of media houses including CBS, The Globe and Mail, Retail Executive, and the National Post. She believes magic happens where logic meets intuition, where the rational meets the emotive, and where facts meet insights.
