For many, consulting is a dream job. But people get into this line of work for a wide variety of reasons. Some do it for the freedom, aiming to create a “lifestyle business” that earns them just enough to fund their needs and occasional wants. Others want to grow an empire, maybe even scaling up to an agency.
And then there are those of us whose eyes light up at the idea of becoming a “six-figure consultant.” It’s a milestone you’ll see plastered all over the websites and Facebook ads of business coaches who promise to help you achieve just that.
Before you shell out cash for that online course or coaching program, step back and ask yourself, “What’s my goal? Why do I want to earn $100,000 versus, say, $75,000 or $50,000?” Status? Personal financial goals? A boat? You need to understand your destination before you begin this journey, because the roadmap to a five-figure business looks a lot different from the roadmap to a six-figure business.
If you’re definitely ready to commit to this journey, or you’re investigating just what this process would look like, read on to learn all about the four levers you can pull to hit that elusive six-figure consulting mark.
To get a better grasp of exactly what this transformation entails, we also interviewed five six-figure consultants with various backgrounds—from SEO to digital marketing to personal development—and asked them for their advice on how to make $100K a year. That way, you can get a variety of tips based on real-life experiences.
If you’re struggling to make $100K a year as a consultant—or just plain struggling to pay the bills—chances are there’s something flawed in your pricing. A common problem among freelancers and consultants (especially if they’re new) is that they’re charging way too little for their services.
Here’s a common mistake consultants make when setting their rates: They take their last full-time job’s annual salary, divide it by 12 months, divide that by 160 hours, and then use that as their hourly consulting rate.
“But I made good money at my last job!” they argue. But you know what didn’t happen at their last job? They didn’t have to pay 15.3% of their income to Self-Employment Taxes. They didn’t have to pay for a bookkeeper, office space, or advertising. An hourly rate based on an employee’s salary doesn’t factor in the overhead costs of running a business, which means it almost always ends up being too low for a consultant.
So what’s the best way to know how much to charge to make $100K a year? Well, you’ve already won half the battle by knowing where you want to go. I always recommend starting with a goal and then working backward.
So if you know you want to make $100K a year, the next questions are, how many clients can you handle per month? How many hours do you want to work per week? This will require that you have some idea of how long certain tasks take you.
Let’s say you’re a copywriter and you know you only want to work part-time hours, so you set a goal of 15 billable hours per week. That’s 60 hours per month and 780 hours per year. But we haven’t factored in holidays and vacation/sick days yet, so assuming you have three weeks of those, that cuts down your billable hours to 735 a year. In that case, your hourly rate would need to be about $136 to hit $100,000 in annual revenue.
You could certainly run with that as your hourly rate, but to be honest, I’m not a big fan of hourly rates. So let’s look at another method—value-based pricing. Instead of selling your time, you can charge flat fees based on the value you provide your clients. This helps them view you as an expert; they’re paying you for your expertise, not your time.
OK, so the goal is $100,000 a year, but now instead of hourly, we’re doing value-based pricing. Let’s say you’ve productized your service (we’ll talk about that below), and you know a typical long-form sales page will cost the client $3,000. At that rate, you’d need to land 34 clients in one year to break the $100,000 mark, so you’d be writing roughly three long-form sales pages per month. Not bad!
If you want more information on setting consulting rates, check out our post on how to charge as a consultant.
So what happens if you’re already working with clients at too-low rates? Raise those rates!
“Don’t be afraid to charge more,” says José Sevilla, the founder of Happpy, a six-figure consulting business helping entrepreneurs launch and scale.
Regarding the biggest obstacle he had to overcome to hit the $100K/year milestone, Sevilla says, “The first challenge was to decide to be expensive and to have few clients but to be extremely dedicated on providing results and fully committed to transform each and every one of them into success stories.”
So if you can back your prices with results (or in Sevilla’s case, he offers a 100% guarantee), then you can absolutely command higher rates.
Getting Selective About Clients
Another thing you need to do when planning how to make $100K a year is get selective about your clients. It’s time to ditch the ones who don’t pay you enough. When you raise your rates, that will usually weed them out for you.
It may be time to leave freelance marketplaces behind too. They may be quick wins for you, but they’re unlikely to be frequented by clients who can afford the sort of rates you’ll need to command if your goal is six figures a year.
“Platforms such as Upwork won’t work to reach that goal,” says JP Wallhorn, founder of Syntx, which offers web, mobile app, and Salesforce development. “You have to actively go after contract opportunities from larger companies and get their trust.”
Wallhorn has landed contracts as large as $100,000! How? By starting small. When he began, he struggled to get companies to trust him as a newbie freelancer with little to no portfolio, so he leveraged achievements from his personal career to gain trust. That helped him get $5,000 to $10,000 contracts, until he eventually worked his way up to that six-figure deal.
Instead of marketplaces that encourage a race to the lowest price, consider investing more of your time into LinkedIn, where many companies with larger budgets are searching for consultants.
Freelance medical writer Lori De Milto has used LinkedIn to help build her six-figure business. She recommends sprucing up your profile by:
- Designing your profile with your ideal client in mind
- Growing your connections
- Being active on the platform
In addition to using LinkedIn to build your network, Neil Sheth recommends attending local networking events and industry-specific conferences, joining Facebook groups, and asking business friends to make introductions. Sheth runs six-figure content marketing and SEO agency Your Brand Found.
“Start building relationships,” he says. “This was the first thing I focused on when leaving investment banking, as my business network was pretty non-existent.”
Outsourcing and Automation
One of the biggest criticisms entrepreneurs have of freelancing or consulting is that it’s not scalable. You’re trading hours for money, they say, and eventually, you’ll hit an income cap.
While yes, freelancing and consulting will never be completely passive, because someone has to deliver the services, there are ways to automate and outsource parts of your business.
First, consider hiring a virtual assistant (a contractor who usually works part-time and remotely) to take on the tasks that don’t directly earn you money, such as answering emails, bookkeeping, scheduling meetings, and the like. It may be tough to relinquish control of any part of your business—especially if you’ve been flying solo for a while—but it’s crucial if you want to scale to six figures.
“Make a list of everything you do on a daily basis,” recommends Ryan Sprance, founder of Kaihatsu Media. “You will find that there are dozens of tasks that a VA can do. If you do not get over that hurdle, you will never be able to scale. Hire before you have a need. By the time the average entrepreneur realizes they need help, it is too late. They have already lost opportunity from being buried in the weeds.”
Here’s a list of some options on where to find a VA:
- Facebook groups for entrepreneurs. In business Facebook groups, it’s common to see fellow founders put out calls for VA recommendations. This is a great way to find a VA because, often, the other members of the group can vouch for the VAs they’ve used.
- Zirtual. With packages starting at $398/month for 12 hours, Zirtual is not the cheapest option, but it differentiates itself from the competition by hiring only college-educated VAs based in the U.S. and boasts a 2% acceptance rate for VA applicants.
- Fancy Hands. Like Zirtual, these VAs are all U.S.-based. But unlike Zirtual, rather than a dedicated VA, your requests could get picked up by a different person each time (though you can contact their support team if you’re interested in getting a dedicated VA). Plans start at just $29.99/month for five requests.
- Virtual Staff Finder. Virtual Staff Finder matches you with dedicated VAs based in the Philippines. Unlike the other options, though, this site is geared for businesses that want to hire full-time employees.
Second, you could consider subcontracting freelancers, as agencies do. Khaleelah Jones runs digital marketing agency Careful Feet Digital, which consistently brings in more than $12,000 of monthly recurring revenue.
“I’m the only full-time employee,” she says. “Everyone else who works for the agency is a freelancer, which keeps our overheads low as a distributed team but keeps our quality high, since everyone brings experience from a variety of projects across industries and markets.”
Yet another way to scale your consulting business is to automate as much as you can: invoices, scheduling appointments, onboarding, social media, email marketing, and more. You can even automate your sales process by setting up a sales funnel that generates and warms up leads before you get them on an initial call.
Here’s a list of some automation software that could be useful in your consulting business:
- Zapier – Connect web apps to create automated workflows.
- ConvertKit – Build your email sales funnels.
- HoneyBook – Easily manage and onboard clients.
- Acuity – Make it easy for clients to schedule time with you.
- Buffer – Schedule your social media posts.
So when you’re thinking about how to make $100K a year in your consulting business, outsourcing and automation are ways to cut down on your time spent on things that bring your effective hourly rate down.
Productizing Your Services
People always say it’s harder to sell intangible goods than tangible goods. Unlike a smartphone or a pair of shoes, your digital marketing strategy or SEO services can’t be held or touched. That can make it tough for a prospect to see the value.
One way to combat that is to “productize” your service. That means making your service feel more like a product by templatizing it (to an extent) to make it easier for you to repeat at scale and easier for clients to say “yes” to it.
Neville Chamberlain likens it to pulling a box of cake mix off the shelf at a supermarket. He writes for Marketing and Growth Hacking:
“A productized service has many of the same characteristics:
- a catchy name and description of the outcome (and possibly a captivating picture);
- what the service contains (ingredients);
- a predefined process (the recipe) for delivering the service;
- a fixed scope (serving size);
- defined benefits (nutritional value);
- testimonials and contact information; and
- a fixed price.”
Productizing a service becomes feasible only after completing that service over and over for many clients. As you work on it, your systems become more refined, and you understand how much time and costs are involved. You can see productized services pretty much anywhere a service is being offered for a flat fee.
A great example of this is Bench, which is essentially bookkeeping as a service (BaaS?). They offer a suite of five productized services, monthly subscriptions to their bookkeeping services that range from $125/month to $345/month when billed on a monthly basis.
The experience is different from hiring a bookkeeper in the traditional way, in that Bench has managed to outline a workflow and processes that make it easy for them to offer recurring monthly services that are narrowly scoped. There’s no initial consultations, custom proposals, modifications, or any of those things that add extra time and effort. You as the customer know exactly what you’re getting when you buy one of their packages. And as the service provider, they know exactly what they’ll be providing you and approximately how long tasks should take each month.
But you don’t have to offer low-cost monthly recurring subscriptions to productize your services. For example, Fuze Branding productized its visual brand identity services by turning them into three flat-rate packages, each with a description of exactly what’s included.
Do you see how it’s like the cake mix box metaphor mentioned earlier? As a shopper, you can tell what’s inside each package, making it easier for you to make a decision about which one to purchase.
“Productized services are a way to add more leverage to your service-based business,” Chamberlain writes. “Done right, it will allow you to earn more, work less and provide better value to your customers.”
How to Make $100K/Year: Parting Advice from Six-Figure Consultants
To recap, if you’re hustling hard to hit that sweet six-figure milestone, you have four levers you can pull: pricing, clients, outsourcing and automation, and productizing services. Play around with these—try changing one at a time or go for all of them at once—until you find what works for your business.
Before you go, here’s some parting wisdom from six-figure consultants:
- Neil Sheth: “If you want to build a great long-term business, you need to put clients first, always. That’s why when I think about freeing up time and making more money, I do it in the context of asking myself the following question: ‘How do I still keep the customer happy?”
- José Sevilla: “Focus on who your ideal customers are. Find your purpose. Focus. Develop your superpowers. Never stop improving, but most of all, find your message, your process, and trademark it. That way, you can’t have competition.”
- Ryan Sprance: “It is important to move away from trading time for money. Expand your service offerings to more automated services or offerings that you can delegate out to people on your team. Partner with like-minded agencies that do similar work but not the same. You can cross-sell your services.”
- Khaleelah Jones: “You never know where your next big break is going to come from, so keep an open mind and be ready for opportunity wherever it comes from.”
What’s the next revenue milestone you hope to hit in your consulting business? Leave a comment and share it with us!