Consulting Business

How Profitable Is A Consulting Business? (Updated for 2024)

Pat Walls

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Updated: October 5th, 2024

How Profitable Is A Consulting Business? (Updated for 2024)

So you want to start a consulting business?

And the first question that came to your mind was, “well, are consulting businesses actually profitable?”

With a market size of $250B - there’s plenty of business to go around.

Especially considering:

You could start a consulting business with as low as $9
Based on our data, consulting businesses generate an average of $1.77M per year
You could see gross margins as high as 99% with consulting businesses

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a consulting business.

Let’s dive in!

Is a consulting business profitable?

Yes, a consulting business is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $1.77M per year with an estimated gross margin of 90%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your consulting business.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your consulting business is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a consulting business worth it?

If you’re wondering if a consulting business is worth it, the answer is a big YES. With consulting businesses, you have the potential to earn $1.77M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $250B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a consulting business to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful consulting businesses case studies.

Examples Of Profitable Consulting Businesses

Here are a few examples of profitable consulting businesses, and a few more details about them:

1. Consulting Success ($2.88M/year)

Michael Zipursky, founder of Consulting Success®, came up with the idea for his business after running and selling several businesses with his cousin Sam. They wanted to create a business that allowed them to work from anywhere and have the freedom to travel. By sharing their expertise and providing valuable content, they built an audience that eventually requested a course and coaching program, leading to the launch of Consulting Success®.

Is it profitable? Yes
How much money it makes: $2.88M/year
How much did it cost to start: $1K

How These Cousins Started A $200K/Month Consultant Training And Coaching Business

Consulting Success® is a 7-figure, highly profitable business that offers courses and coaching programs for consultants looking to start or grow their consulting business, built through iterative content creation and audience validation.

Read this case study

Read by 9,376 founders

2. Fullfunnel ($600K/year)

Andrei Zinkevich and Vladimir Blagojević came up with the idea for Fullfunnel.io while developing an ABM strategy for B2B tech startups. They noticed that many companies had a limited understanding of ABM and decided to launch a pilot campaign to validate the demand for in-house ABM operations. The campaign generated 6 sales opportunities and 2 deals, validating the idea for Fullfunnel.io in September 2020. Since then, they have utilized regular marketing operations, thought leadership on LinkedIn, personalized outreach, and detailed case studies to attract and retain customers, leading to $1M in the sales pipeline and $500K ARR in just 18 months.

Is it profitable? Yes
How much money it makes: $600K/year
How much did it cost to start: $0

How Our B2B Marketing Agency Reached $50K/Month In Just 18 Months

Co-founders at Fullfunnel.io generated $1M in sales pipeline and extended their portfolio in 18 months to grow the company to $500K ARR by training and guiding B2B marketing and sales teams to connect, engage & win deals with target accounts and create stable demand for products with impressive growth tactics on LinkedIn.

Read this case study

Read by 2,532 founders

3. DigitalCollars ($20.4K/year)

David Arroyo, the founder of DigitalCollars, came up with the idea for his digital consultancy after working in manufacturing for nine years and realizing the gap between software and factories. He saw the need for optimizing and automating processes in small and medium-sized factories that were still relying on spreadsheets for production. After implementing digital solutions in his own factory and seeing the positive impact, he decided to monetize his productivity tools and offer his services to other manufacturing companies.

Is it profitable? Yes
How much money it makes: $20.4K/year
How much did it cost to start: $300

This Engineer's $21K/Year Side Hustle Helps Manufacturing Companies Go Digital

DigitalCollars is a digital consultancy created by founder David Arroyo to provide software solutions for manufacturing companies, generating an average of $1,700 per month while working full-time, targeting the small and medium-size factories market with potential for growth.

Read this case study

Read by 2,264 founders

Learn more about starting a consulting business:

Where to start?

-> Consulting business plan
-> How to finance a consulting business?
-> How much does it cost to start a consulting business?
-> Pros and cons of a consulting business

Need inspiration?

-> Other consulting business success stories
-> Marketing ideas for a consulting business
-> Consulting business names

Other resources

-> Consulting business tips

How much can you make with a consulting business?

With a consulting business, you can make an average of $1.77M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $9. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a consulting business make a week?

Based on our data, average weekly revenue for a consulting business ranges around $36.5K. As such, you could see monthly revenues of $146K.

To know if your consulting business achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your consulting business.

How much do consulting businesses owners make?

The income of a consulting business owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established consulting business is about $36.5K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a consulting business owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Consulting Business Profit Margins

Generally speaking, a consulting business can expect profit margin of around 90%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a consulting business, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, consulting business owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, consulting business owners can ensure long-term sustainability and profitability for their business.

Consulting business owner salary

The salary of a consulting business owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established consulting business, in a prime position, might see an average weekly salary around the ballpark of $32.8K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a consulting business may be a promising business to start - but the success of your consulting business mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable consulting business.

Part of

Starting A Consulting Business: Everything You Need To Know

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