How to Price Consulting Services After a Corporate Career

The wrong starting point

Almost every ex-corporate consultant starts their pricing calculation by dividing their old salary by the number of working days in a year and calling that the day rate. Sometimes with a modest multiplier bolted on. This is a mathematically wrong starting point and it quietly undervalues years of experience.

Salary included pension, paid holiday, sick leave, benefits, bonus, office, software, training, admin support, and a sales function that was placing qualified work in front of you. None of that is included in your new day rate by default. You have to add it back in, or you are quietly being paid less to do the same work with more risk and less support.

The honest maths of a day rate

Here is the calculation that actually works. Start with your total compensation in your last role — base salary, bonus, pension contributions, employer national insurance or payroll tax, health and life benefits, long-term incentives, and the monetary value of paid holiday and sick leave. For most senior corporate professionals, this is 25 to 40 percent higher than their base salary.

Then divide by realistic billable days, not working days. A good year for an independent consultant is 120 to 160 billable days. The rest of the time is sales, admin, proposals, conferences, training, and the machinery of running the business.

That produces a day rate that usually looks uncomfortable at first — often two to three times the naïve salary-divided-by-days figure. It is not a premium. It is simply the honest number. If you cannot charge it, you have either a positioning problem or a sales problem, not a pricing problem.

When hourly pricing becomes self-sabotage

Hourly pricing punishes expertise. The problem that would take a junior consultant three weeks takes you two hours because you have seen it dozens of times before. Pricing those two hours hourly means you are paid less for being more useful.

Outcome-based or package-based pricing solves this. Instead of selling hours, you are selling a defined piece of work with a defined result. “A three-week operational review and 60-page report, £45,000.” “A twelve-week product pricing transformation, £80,000.” “A one-day strategic offsite and written recommendation, £12,000.” The client gets clarity; you get paid for the value delivered, not the hours burned.

The transition from hourly to package pricing is one of the most impactful single decisions a new consultant can make. It typically increases effective hourly earnings by a factor of two to four.

Know your floor, your target, and your walk-away

Before any pricing conversation, write down three numbers: the price you would be delighted to receive, the price you would accept cleanly, and the price below which you will walk away. Do not improvise these in the moment. The pressure of a live conversation almost always moves your number down, not up, unless you have anchored it on paper first.

The third number — the walk-away — is the most important. It is the thing that lets you stay calm in a negotiation, because you know exactly where the conversation ends. Clients can sense the difference between a consultant who has a walk-away and one who doesn’t. The presence of a real floor often moves the agreed price upward without it ever being mentioned.

Raising your rate over time

Once you are established, raising rates is not optional — it is structurally necessary. Costs go up every year. Your experience accumulates every year. Staying at the same rate for five years is equivalent to a quiet pay cut.

The straightforward way to raise rates is to raise them on new clients first and grandfather existing clients for a defined period — typically through their current engagement or for a twelve-month window. This avoids the difficult conversation of a mid-engagement rate rise while still moving your realised rate upward over time.

Annual increases of five to ten percent are rarely contested. Step changes — thirty percent in a single move — usually require either a positioning shift, a significant new credential, or a change in the type of work you are doing.

Common mistakes to avoid

A short list of pricing mistakes that are common enough to be worth naming explicitly.

• Sliding discounts — accepting a lower rate for “the first project” and never successfully raising it afterwards.
• Pricing per hour when the client wanted an outcome — you will under-earn and the client will under-value the work.
• Discounting before being asked — offering a lower price pre-emptively because you are nervous about the number.
• Not separating fee from expenses — absorb travel and the fee looks inflated; bill it separately and the fee reads cleanly.
• Quoting a range — “Somewhere between £30k and £50k” invites the client to anchor at the low end. Quote one number.
• Skipping the written proposal — verbal agreements get remembered differently on each side. Write it down.

The specific numbers in this article are a framework — the right number for your specific expertise, in your specific market, benefits from a data-grounded pricing tool.