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Consulting ROI calculator

Check whether a consulting project pays off before you sign, measure what it really delivered after it ends, or price your own proposal on the value you create. ROI, payback, NPV and IRR. Free, no sign-up, nothing leaves your browser.

$
$
Staff time, tools and rollout
$
%
Only profit counts as return
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%
100% = certain. Lowers the benefit.
Benefits grow evenly until then
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Retainer, licenses, upkeep
%
Your cost of capital
Changes the symbol only, no conversion

For consultants and agencies

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The method

How consulting ROI is calculated

ROI compares what the project returns with everything it costs.

ROI = (Benefit − Cost) ÷ Cost × 100%

The benefit is the extra profit and the savings the project brings, reduced by your confidence, and counted over the years you choose. The calculator works month by month: benefits grow evenly until the month results are fully in place, so a slow start lowers the first year.

Next to ROI you get the benefit-cost ratio (benefit ÷ cost), the payback period, net present value and the internal rate of return.

Benefit

$100,000 a year

$200,000 × 30% + $40,000 = $100,000

At 80% confidence, $80,000 a year counts.

Three years

$223,333 in total

6-month ramp-up: $63,333 in year 1

Then $80,000 in each of years 2 and 3.

Result

197.8% ROI

($223,333 − $75,000) ÷ $75,000

Payback in 13.8 months. NPV $116,548 at 10%.

Common mistake

Revenue is not profit

Extra sales come with extra costs, so only the profit on them is a return.

If a project adds $200,000 of sales at a 30% margin, the business is $60,000 better off, not $200,000. Counting revenue instead of profit makes the ROI in this example look three times better than it is. Enter your gross or contribution margin, and enter cost savings separately, because a saving is already profit.

Full cost

What counts as the cost of a consulting project

The fee is only part of it.

Fees

Consulting fees

Including travel, expenses and any planned extensions of the engagement.

Your team

Internal time

Hours your managers and staff spend in workshops, interviews and rollout, at their loaded cost.

Ongoing

Running costs

New software, retainers or extra staff the recommendations require. Enter them as an ongoing cost per year.

Credible results

How much of the result came from the consultant?

Sales and costs change for many reasons. The After the project tab only credits the share the consulting work caused.

Credited benefit = Measured improvement × Share caused by the work × Confidence

This is the estimation method Jack Phillips describes for training and other programs: people closest to the results estimate what share of the improvement the program caused and how confident they are in that estimate, and the two percentages are multiplied. If they say 50% with 70% confidence, 35% of the improvement is credited.

In the example, a $250,000 improvement becomes $87,500 of credited benefit. Against $75,000 of cost, the ROI is 16.7%, not the 233% you would get by crediting everything.

Time value

NPV, IRR and payback

Money you receive later is worth less than money you pay now.

NPV

Value in today's money

Each month's benefit is discounted at your rate and the costs are subtracted. Above zero means the project beats your cost of capital.

IRR

The project's own return rate

The yearly rate at which NPV is exactly zero. Compare it with the return you expect from other uses of the money.

Payback

Months to break even

When the benefits received so far cover the upfront cost. A slow ramp-up moves it later.

For consultants

Value-based fees

Price the project on the value it creates for the client, not on your hours.

Fee = Value for the client per year × Years counted ÷ Return per $1 of fee

Consultant Alan Weiss argues that a fee should give the buyer at least a 10 to 1 return. If your work is worth $500,000 a year to the client, a $50,000 fee gives them that return. With 120 hours of work, your effective rate is about $417 an hour.

The Price my proposal tab shows fees at 5, 10 and 20 to 1, so you can offer options and see what each means for your hourly rate.

Spreadsheets

Consulting ROI formulas for Excel and Google Sheets

A1 = total benefit, B1 = total cost.

ROI

=(A1-B1)/B1

Benefit-cost ratio

=A1/B1

Credited benefit (C1 = improvement, D1 = share caused, E1 = confidence)

=C1*D1*E1

NPV and IRR of yearly cash flows in F1:F4 (F1 = upfront cost as a negative number)

=F1+NPV(10%,F2:F4)
=IRR(F1:F4)

FAQ

Consulting ROI questions

How do you calculate the ROI of a consulting project?

Subtract the total cost from the total benefit, divide by the total cost and multiply by 100. Count profit, not revenue, include your internal time in the cost, and only credit the share of the result the consulting work caused.

What is a good ROI for consulting?

There is no single standard. Any ROI above 0% returns more than it costs, and an NPV above zero means the project beats your cost of capital. Many consultants who price on value aim for the client to get several times the fee back; Alan Weiss recommends at least 10 to 1.

Should I use revenue or profit?

Profit. Extra revenue brings extra costs, so multiply new revenue by your margin. Cost savings are already profit and count in full.

How do I know how much of the result came from the consultant?

Ask the people closest to the results to estimate the share the project caused and how confident they are, then multiply the two percentages. Use control groups or trend data when you have them.

When should I measure the results?

Six to twelve months after the project ends, once changes are in place. Results on the last day of a project usually show plans, not outcomes.

What is the difference between ROI and the benefit-cost ratio?

ROI shows net gain as a percentage of cost. The benefit-cost ratio divides total benefit by cost. A ratio of 3 equals an ROI of 200%.

How do I price a consulting project on value?

Estimate the yearly value your work creates for the client, decide how many years to count and divide by the return you want the client to get for each dollar of fee. Then check the effective hourly rate against your effort.

Does the calculator store my data?

No. Everything runs in your browser. The share link keeps your numbers in the address after the # sign, which is not sent to our server.

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