The Math New Consultants Get Wrong About Hourly Rates

26 Dec 2025 · 1 min

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In this brief segment, the speaker emphasizes that a consultant’s hourly rate should be set to meet personal and business goals, not merely to fill a calendar. He points out a common misconception among new consultants: they often assume most of their work time is billable. In reality, only about 60% of a consultant’s hours are typically billable, while the remaining 40% is consumed by non‑billable activities such as marketing, sales, administrative duties, and other back‑office tasks required of a business owner. Understanding this split is crucial for correctly pricing services and ensuring the rate supports the consultant’s objectives.

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Your hourly rate isn't about filling your calendar. Your rate has to support your goals. And to do that, you need to understand something most new consultants miss. Only a fraction of your time is billable. On average, you'll bill about 60% of your hours. Well, where does the other 40% go? Think about it. You have marketing, sales, administrative work, back office tasks, All the things you now have to do as a business owner.