SOURCE: Women in Consulting

Women In Consulting

December 12, 2013 11:00 ET

Survey Finds Top Bay Area Consultants Dramatically Increased Gross Revenue, but Revenue Margins Are Down

12th Annual Women In Consulting (WIC) Survey Also Shows a Decline in the Use of Consulting Best Practices

SAN JOSE, CA--(Marketwired - Dec 12, 2013) - The gross revenue of top Bay Area consultants increased dramatically, but their revenue margins were down, according to the 12th Annual Women In Consulting (WIC) Best Practices and Compensation Survey. Respondents also reported decreasing use of techniques that have helped build profitable consulting practices in the past.

WIC is a collaborative community offering consultants and small business owners a powerful resource to help them build strong businesses.

The survey covers overall trends in revenue and rates and examines best practices, including the choice of business structure, use of employees and subcontractors, billing practices, networking, and marketing approaches. The WIC survey team compares results to previous years to track evolving trends and compares the responses of the top-earning consultants to the overall group to help identify best practices.

Gross revenue for the Top 20% of the respondents was $444,500, up 19 percent from $373,000 in 2012 and 36 percent from $325,000 in 2011. However, revenue margins have declined over the past two years, from 90 percent in 2011 to 77 and 72 percent in 2012 and 2013 respectively.

Results for the group as a whole show that gross revenue went back up to 2011 levels after a slight drop in 2012, although revenue margins have not returned to 2011 levels. Specifically, average gross revenue increased by $10,000 this year to $130,000 (same as 2011), while net revenue is $7,000 less than in 2011.

"Gross revenue" refers to total annual revenue reported by respondents. "Net revenue" refers to gross revenue minus expenses for subcontractors and employees for the same period. "Revenue margin" refers to the net revenue divided by the gross revenue.

"One of the most valuable aspects of the WIC survey is the analysis of the responses of top-earning consultants to identify successful best practices that others can use in their businesses," said Kathie Sherman, president of TenFourMarketing and WIC's president.

"There may be several reasons for the decline in revenue margins, including a changing economic climate, different types of projects, and client preferences but part of the reason may be due to less use of consulting best practices," she added.

Some of the specific findings related to best practices are:

  • Only 69 percent of all respondents sometimes charge fixed or project fees, a decrease from 70 percent in 2011 and 77 percent in 2012.
  • Few respondents (13 percent) always charge some portion of the project fee upfront, a significant decrease from previous years (20 percent in 2011 and 23 percent in 2012).
  • Although the number of consultants who use subcontractors has increased steadily over the years, the consultants who regularly mark up their subcontractors' fees has decreased the past two years (59 percent in 2013 compared to 75 and 67 percent in 2011 and 2012).
  • Fewer consultants tried to renegotiate project fees when the scope changed (64 percent compared to 77 percent in 2012 and 69 percent in 2011).

More than 200 consultants took the survey, which covers the 12-month period through June 30, 2013. Detailed findings are available exclusively to WIC members and to all survey participants. A webinar that presents all the results is available.

About WIC

Women In Consulting (WIC) is a vibrant, diverse, and powerful community of consultants and small business owners working to build strong businesses. Founded in the San Francisco Bay Area in 1998, WIC provides its 400+ members and affiliates a forum to connect and share with like-minded professionals. Established as a nonprofit, collaborative community to foster successful businesses for its members, WIC sponsors programs and activities to help members network, improve their skills, and thrive even in a tumultuous economic climate, and also provides consulting leadership and support to the community at large.

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