How much can you make consulting on your own?

The fastest route from a salary to a higher income, and the one with the hardest ceiling. The rate is not the number that matters — utilisation is, and most people calculate it wrong.

Part of the common ways of making money.

Solo consulting is the quickest way most skilled employees can substantially raise their income, and it is also the clearest example of a ceiling that no amount of skill removes.

Both facts come from the same arithmetic.

The arithmetic people get wrong

The appealing calculation: my salary is £60,000, that is about £30 an hour, and consultants charge £150. Five times the money.

The actual calculation has three corrections.

You will not bill 40 hours a week. Selling, proposals, invoicing, admin, dead time between clients — that is unbilled and unavoidable. Sustained utilisation for solo consultants is commonly 50–60%, and many first-year consultants achieve considerably less.

You now pay for everything an employer paid for. Pension contributions, holiday, sick leave, equipment, insurance, software, accounting, training. This is a large number and it is invisible while employed.

Income is lumpy. A good quarter followed by a quiet one, and the quiet one still has costs.

Run it properly. £150 an hour at 55% utilisation across a 46-week year is roughly £126,000 billed. Take off maybe £20,000 of costs, and price the absent pension, holiday and sick pay honestly, and you are somewhere near £90,000 of genuinely comparable income.

That is a real and substantial improvement on £60,000. It is not five times, and the gap between the two figures is where most disappointment lives.

Where the money comes from

A client’s budget, because they have a problem and lack the person to solve it. Straightforward, and it points at what actually sets your rate.

Your rate is set by the cost of the alternative, not by your skill. What would it cost the client to hire someone, or to use a firm, or to leave the problem unsolved? That is the band. Being better than the alternative raises the rate somewhat. Being able to solve something they cannot solve any other way raises it a great deal.

Which is why narrow specialists earn multiples of generalists at identical skill levels. Not because they are better — because the alternative is worse.

The ceiling

Here is why this belongs on a site about the shift from wages to ownership.

Solo consulting is the wage channel at its most optimised. You have removed the employer’s margin and taken it yourself. That is a real gain, and it is a one-time gain.

After it, the cap is unchanged: your income is hours multiplied by rate, and hours are finite. You can raise the rate for a while. You cannot raise the hours. And unlike a salary, income stops completely the moment you do — no holiday pay, no sick pay, no notice period.

It is a better version of the same channel, not a different one.

The three ways out

Each of these is the move from activity to structure, and each has a real cost.

Employ people. This is the agency: margin on other people’s hours. Scales, and turns you into a manager and salesperson rather than a practitioner. Many excellent consultants dislike the job it becomes.

Productise. Turn the repeatable part into a fixed-scope offering, or software, or a template. Revenue decouples from hours. Hard, and most attempts fail because the value was in the judgement rather than the deliverable.

Take equity instead of cash. Trade some of the fee for ownership in the client. Converts wage income into ownership income directly, at the cost of certainty. Occasionally transformative, frequently worth nothing.

If none appeals, that is a legitimate answer. Solo consulting is a good life for many people. It is simply worth knowing that you have optimised a channel rather than left it — and that everything in stage 3 still applies, funded by an unusually good surplus.

What the evidence says

Moderate. Day rates are reasonably observable through job boards, recruiters and peers. Utilisation is not published and is the number that decides your income, which is an unfortunate combination.

The most common first-year failure is not rate — it is utilisation. People price themselves adequately and then bill 30% of their time because they did not sell while delivering. The feast-famine cycle is nearly universal early and is a scheduling problem rather than a demand problem.

If you are considering it

Line up the first client before resigning. Ideally your employer, or a former one. Most successful independents start with work already in hand.

Price on value, not on your old salary. The salary is irrelevant to the client and anchoring to it costs you for years.

Assume 50% utilisation in year one, and be pleased if you beat it.

Sell while delivering. The famine follows the feast because nobody sold during the feast. Blocking time for this weekly is the single highest-return habit in the job.

Narrow deliberately. “I do X for Y companies” commands more than “I do consulting,” because the alternative to a specialist is worse.

And decide early whether you want the ceiling. If not, choose which of the three exits you are building toward and start while you still have the surplus and the energy.