What to Charge as a Consultant: Setting Rates You Can Defend
Operations consultant pricing from old salary discovers employee math doesn’t work for consulting value
Your Old Salary Formula Is Failing You
You spent eight years in-house. Made $75K/year. Now you’re consulting.
You calculate: $75K ÷ 2,080 hours = $36/hour. Add overhead, target profit... maybe $75/hour?
You quote $75/hour. Clients say yes. You’re busy. But something’s wrong—you’re working more and earning the same or less than your salary.
You tell yourself you need industry benchmarks. Better formulas. More data on what consultants charge.
Here’s what nobody tells you: Employee math doesn’t apply to consulting. At all.
Over 63% of first-year consultants price from salary calculations and wonder why they can’t break $60K. The ones scaling past $150K stopped using employee math and started using transformation math.
What You Think Is Wrong vs What’s Actually Wrong
What you think: Need to find industry benchmarks, calculate from salary equivalent, use pricing formulas.
What’s actually wrong: You’re not replacing a salary—you’re selling expertise, speed, and outcomes. Employee pricing formulas are useless here.
Here’s what’s happening: Astrid’s an operations consultant. Eight years in-house experience, one year consulting. $60K/year revenue.
She calculates rates from her old $75K salary. Adds overhead, desired profit, and hourly breakdown. Lands at $75/hour.
She’s busy. Fully booked. Working 40+ hours/week. Earning less than her corporate job after expenses.
What she can’t see: Employees are paid for time. Consultants are paid for transformation.
When she was in-house:
$75K/year for 2,080 hours of presence
Value = availability during business hours
Paid regardless of output
As a consultant:
Clients don’t want 40 hours of her time
They want 8 years of her knowledge compressed into 20 hours
They’re paying for expertise + speed + outcome
A $75/hour consultant rate says: “I’m selling time.” A $200/hour consultant rate says: “I’m selling transformation.”
Same consultant. Same expertise. Different positioning.
The consultant pricing equation isn’t: Salary ÷ hours + overhead = consulting rate
It’s: Problem value × transformation speed = consulting rate
Astrid solves process problems that cost companies $50K-$200K annually in wasted labor. She should be charging $150-$250/hour or $10K-$25K per engagement—not $75/hour calculated from her old salary.
The Reframe That Changes Everything
“You’re not replacing a salary—you’re selling expertise, speed, and outcomes. Employee pricing formulas are useless here.”
Stop calculating from salary. Start pricing from the transformation.
Do This Today (The Immediate Fix)
You don’t need more benchmarking. You need to understand what you actually sell.
Step 1: Stop calculating from salary
Delete your spreadsheet. The one where you divided the old salary by hours and added overhead.
That formula answers: “How do I replace my paycheck?”
Wrong question. You’re not an employee anymore.
Right question: “What transformation do I create and what’s it worth?”
Step 2: List 3 outcomes you create for clients
Don’t list deliverables (what you do). List transformations (what changes).
Don’t write: “Process documentation and workflow optimization.”
Write: “Client was spending 25 hours/week on manual data entry. New workflow reduced it to 3 hours/week. Freed 22 hours × $50/hour × 50 weeks = $55,000/year in recovered labor.”
Don’t write: “Operations audit and recommendations.”
Write: “Client had 18% customer churn from poor fulfillment processes. Fixed process reduced churn to 6%. Saved $180K annually in lost revenue.”
Step 3: Research what ONE of those outcomes is worth
Pick your most common transformation. Ask: “What would a company pay to achieve this?”
Saving $55K/year in labor costs—what’s that worth?
Internal hire to solve it: $75K salary + 6 months to fix = $37K+ investment
Leaving it broken: $55K lost every year, compounding
Your solution: 40 hours to diagnose + implement = value is $15K-$25K
You’re charging $3,000 (40 hours × $75). You should be charging $15,000 minimum.
The 7-Day Protocol (Complete Solution)
Day 1: Document transformation you create (before/after for clients)
For each recent project, write the before/after:
Before: Team spending 25 hours/week on manual reporting
After: Automated reporting system, 2 hours/week required
Transformation: 23 hours freed × $50/hour × 50 weeks = $57,500/year value
Do this for 5 projects. You’ll see a pattern: You’re creating $50K-$200K in annual value per engagement.
Day 2: Quantify outcomes in dollars (revenue, savings, time)
Convert every transformation to money:
Time saved: Hours × wage rate × 50 weeks
Error reduction: Error cost × reduction percentage × frequency
Revenue increase: New revenue - old revenue (if you can attribute it)
Churn reduction: Retained revenue × years of retention
Get specific. “Improved efficiency” means nothing. “$73,000 saved annually” is a number clients understand.
Day 3: Calculate the ROI clients get from working with you
Pick your average engagement:
Value created: $_
What you charged: $_
Client ROI: Value ÷ Cost = _x
Example:
Value: $73,000/year saved
Charged: $5,000
ROI: 14.6x
They paid $5K to get $73K. That’s a 1,360% return in year one.
Would they have paid $15K? Yes. $20K? Probably. You’re not overcharging at $15K—you’re finally capturing fair value.
Day 4: Set price at 10-20% of annual value delivered
This is your new pricing framework.
If you save a client $100K/year, charge $10K-$20K. If you generate $250K in new revenue, charge $25K-$50K.
Not hourly. Not a daily rate. Flat engagement fee based on transformation value.
Day 5: Create outcome-focused proposal template
Old template structure:
Scope of work
Timeline
Deliverables
Price: $X/hour for estimated Y hours
New template structure:
Current state (problem + cost)
Desired state (transformation + value)
How we get there (approach, not hours)
Investment: $X (fixed, outcome-based)
Example:
Current State: Your fulfillment process has an 18% error rate, costing approximately $12K/month in rework, refunds, and lost customers.
Desired State: Error rate below 3%, saving $10K/month ($120K annually) and improving customer satisfaction scores.
How We Get There: Diagnostic audit → process redesign → team training → monitoring system
Investment: $18,000
No hours mentioned. No daily rate. Just problem, solution, value, price.
Day 6: Practice articulating value (not time/effort)
Reframe every conversation from time to transformation:
Don’t say: “I charge $150/hour and this will take about 40 hours.”
Say: “This saves you approximately $120K annually. The investment is $18K.”
Don’t say: “I have 8 years experience in operations.”
Say: “I’ve helped 15 companies reduce fulfillment errors by 70%+, saving an average of $150K per year.”
Practice with a friend. Record yourself. Get comfortable leading with outcomes, not credentials or time.
Day 7: Quote new rate leading with outcomes
Next client inquiry, use the new approach:
“Based on what you’ve described, you’re losing approximately $X/month to [problem]. Companies in your situation typically see $Y in savings once we implement [transformation]. The investment for this engagement is $Z.”
They’ll either:
Say yes (transformation worth it)
Negotiate (but still thinking value, not hours)
Say it’s too expensive (wrong client for this transformation)
All three are better than hourly rate conversations.
Go Deeper: The Complete Framework
This solves the immediate problem—understanding that consultant pricing isn’t employee math and how to price from transformation value.
But if you want the complete system for restructuring pricing and offers to capture more value from the same work, moving beyond time-based pricing entirely:
The Revenue Multiplier shows you how to double your earnings without working more. You’ll learn exactly how to package consulting by outcome instead of time, why transformation-based pricing captures exponentially more value than hourly rates, and how to build pricing confidence through systematic value documentation.
Want the full Clear Edge OS? 26 frameworks for $5K-$150K operators who want precision, not guesswork. Start here
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