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

Updated: June 14th, 2024
Start A Consulting Business

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 $1.21M 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 $1.21M 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 $1.21M 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. Visualise Value ($1M/year)

After a few years of working on agencies, Jack was operating at a level where he could hear and see what brands were paying for work.

That's when he realized that he could offer 90% of the services his employers were providing, but take home a greater share of the margin if he went out alone.

Is it profitable? Yes
What's the gross margin? 99%
How much money it makes: $1M/year
How much did it cost to start: $1K

How Jack Butcher Built $1M/year Digital Product Business in 18 Months

Learn how Jack Butcher transitioned from a creative director to founder of Visualise Value, now making an impressive $1M/year by offering unique visuals and creating a community-driven digital platform.

Read by 149 founders

2. Minor Workshop ($1.44M/year)

Is it profitable? Yes
What's the gross margin? 70%
How much money it makes: $1.44M/year
How much did it cost to start: $500

How I Started A $1M/Year Productivity Consulting Business

This case study article showcases the success story of Paul, who built a profitable consulting business focused on Asana and Pipedrive, generating around $90,000 in monthly sales from consulting and subscription fees, with a margin of 80% and a customer base ranging from solo operators to big enterprise clients.

Read by 1,608 founders

3. Alex Albarran & Co. ($6.49M/year)

Is it profitable? Yes
How much money it makes: $6.49M/year
How much did it cost to start: $1K

How I Grew My Marketing and Consulting Business to $500K+/Month

Learn how Alex Albarran grew his online marketing and business consulting company to achieve a gross revenue of $541k per month, with 3x revenue growth over 15 months, and a team of 8 members, while helping entrepreneurs close the gap between where they are and where they want to be in their business, life, and wealth.

Read by 2,433 founders

Learn more about starting a consulting business:

Where to start?

-> How to start a consulting business?
-> 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
-> Examples of established consulting business
-> 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 $1.21M 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 revenue for a consulting business ranges around $30.5K. As such, you could see monthly revenue if $122K.

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 $30.5K. 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 $27.5K.

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, a consulting business is quite promising if you plan on starting such. With a market size of $250B, you can enjoy a potential revenue of around $1.21M per year with a gross margin of 90%.

Considering this information, you can enjoy a return of investment within 7 months, especially if you have a monthly profit of $110K. Overall, the success of your consulting business also depends on your effort and knowledge about it. If you persevere with these things, you can ensure that this consulting business is profitable.

Make sure you have a proper consulting business plan and know how to get clients for your consulting business.