Do You Know the Difference Between Average and High-Income Consultants?
Jun 19, 2021
The charts below show earnings for average, senior-level, and super-high earners in 2019 that are working in industry. But, if you can take just a moment, I want to tell you a short, personal story that illustrates the difference between consultants and their range of earnings.
A Short, Embarrassing Story
In my 30+ years as a consultant, first technical and later corporate strategy, I’ve seen wide ranges in consultant's skills, experience, and earnings; earnings often are not comparable to expertise. I know that doesn’t seem fair.
The difference between those being paid for their technical skill and the earnings for those with both technical skills and business/branding acumen became very apparent to me at one of Microsoft’s first conferences.
In 1984 Microsoft asked me to be one of their first independent consultants. Three or four years later, at one of Microsoft's first large conferences, from the midst of hundreds in attendance, a consultant stood up and spoke into the open mic,
The laughter was long, and I’m afraid, embarrassing for the questioner. He shriveled back into his seat.
Of course, expertise matters. It’s a ticket you need to play in the game. But, after that the game goes to those that know how to build relationships and create systems that build a thriving consulting business.
After "retiring" from active consulting I dedicated two years to studying the differences between high income and average income consultants and solo-professionals. The difference is more than experience or technical expertise. This difference is in knowing how to build a business.
Average and Senior Consulting Incomes
Before we talk about these differences between average and high-earning independent professionals, look at the table below. This table compares incomes from the last week of January 2019 for the average-level consulting employee and senior-level consulting employee on the three job sites, Glassdoor, PayScale, and Indeed.
This comparison is between jobs that included “consultant” in the title. It also does not include salaries for senior consultants or partners from large consulting firms.
|
|
Average |
Senior Level |
|---|---|---|
|
Glassdoor.com |
$79,526 |
$95,469 |
|
PayScale.com |
$71,170 |
$93,176 |
|
Indeed.com |
$79,727 |
$95,440 |
The difference between average income and senior consultant income is about what you might expect for the difference between average income and senior income for employees.
Average Consulting Incomes for the Table Above
Income for High Earning Consultants and Solo-Professionals
Now, compare the income differences in the table above to the differences in income between solo-professionals shown below.
This second table shows the income distribution for solo-professional’s from analysis Elaine Pofeldt did of US Census data from 2015. The outliers earn amazingly high-incomes. They are using business systems the average solo-consultants and solo-professionals are not.
I know these high six- and seven-figure incomes can be earned as a solo-consultant. I’ve done it for multiple years without selling over the internet. (But, the internet does make it easier to earn these incomes.)
There are almost one-million solopreneurs making more than $250,000 and there are 35,584 making between $1,000,000 and $2,500,000. (The number of high-earners is even greater now as this census data is from 2015.)
|
Number |
Income |
|---|---|
|
35,584 |
$1,000,000 to $2,500,000 |
|
258,148 |
$500,000 to $999,999 |
|
584,586 |
$250,000 to $499,999 |
|
1,860,000 |
$100,000 to $249,000 |
If you add up the long tail to the right of $100,000 on the curve below there are more than 2.7 million solopreneur’s making more than $100,000 per year. Many of them are solo-professionals and consultants.
Even if you shoot for the top and fall a little short your income will still be in the high-six figures. Duplicating even a few of the business systems used by these high-earners can significantly improve your income and give you more independence.
Why Do Some Consultants Earn Such a High Income?
Why do some independent consultants and solopreneurs make so much money? What do they do differently?
Books like “Outliers: The Story of Success” by Malcolm Gladwell, “The Million-Dollar, One-Person Business“ by Elaine Pofeldt, and my six- and seven-figure independent consulting business plus two years of research into high-earners shows that following the systems used by these outliers can dramatically increase your performance.
For her book, Elaine Pofeldt interviewed thirty $1,000,000 solopreneurs to learn what they did differently. She found six areas the high-earners did that average earners do not do.
In parallel to Elaine’s findings, my research found nine stages of business systems that used specific business building practices and systems. In fact, Elaine’s six areas and my nine stages incorporate many of the business systems experienced investors demand of new Silicon Valley startups.
Success as an independent consultant doesn't take magic. Success comes from building your independent consulting or solopreneur business using well-proven business systems and following them consistently.