It Consultant

How Profitable Is An It Consultant? (Updated for 2024)

Pat Walls

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Updated: October 6th, 2024

How Profitable Is An It Consultant? (Updated for 2024)

So you want to start an IT consultant?

And the first question that came to your mind was, “well, are IT consultants actually profitable?”

With a market size of $998B - there’s plenty of business to go around.

Especially considering:

You could start a IT consultant with as low as $100
Based on our data, IT consultants generate an average of $5.3M per year
You could see gross margins as high as 80% with IT consultants

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a IT consultant.

Let’s dive in!

Is an IT consultant profitable?

Yes, an IT consultant is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $5.3M per year with an estimated gross margin of 90%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your IT consultant.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your IT consultant is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is an IT consultant worth it?

If you’re wondering if a IT consultant is worth it, the answer is a big YES. With IT consultants, you have the potential to earn $5.3M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $998B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a IT consultant to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful IT consultants case studies.

Examples Of Profitable It Consultants

Here are a few examples of profitable IT consultants, and a few more details about them:

1. iContact ($50M/year)

Ryan Allis co-founded iContact by recognizing a pain point early on through his experiences with digital marketing. His journey began as a young entrepreneur who started various ventures, like a computer consulting business when he was 11 and a web marketing consultancy by 16. While handling web design jobs, he noticed how tedious and inefficient existing email marketing solutions were, especially as most were desktop-based and not user-friendly.

This revelation came to a head when he partnered with Aaron Houghton, whom he met through the Carolina Entrepreneurship Club at UNC. The duo discussed creating a web-based email marketing tool that would simplify email newsletter distribution for small businesses. They validated their idea by offering free services to local businesses, such as Jimmy John's Sandwich Shop, to demonstrate the tool's effectiveness. Learning from initial user feedback and adjusting their approach, they managed to generate recurring revenue and acquire paying customers.

One of their early challenges was managing their resources; they bootstrapped the company, working in frugal conditions without a salary for years. Additionally, an instance of a critical server crash taught them the importance of system reliability and customer trust. Surviving these hurdles with persistent efforts and smart pivoting, they refined their product, proving the business model was not only feasible but scalable. By focusing on getting things right with the product and maintaining a close relationship with initial customers, they learned the importance of real-world validation and adaptability in their startup journey.

Is it profitable? Yes
How much money it makes: $50M/year
How much did it cost to start: $5K

How Ryan Allis Dropped Out of College and Built iContact to a $169 Million Exit

Discover how Ryan Allis turned a $4,000 server investment into a $169 million acquisition by Vocus, overcoming technical and financial challenges through strategic pivots in email marketing for small businesses.

Read this case study

Read by 80 founders

2. Karma ($420K/year)

David and his co-founder Stas recognized the issue of team inefficiency firsthand while running their web development agency. They noticed that even with a great team, employees often worked in silos, leading to delayed projects and increased costs. This observation motivated them to build Karmabot as an internal tool to better align their team on Slack and boost collective performance through a rewards system.

Before fully committing to the idea, they experimented with existing tools but found them lacking, particularly in linking productivity directly to employee bonuses. This gap led them to develop a Minimum Viable Product (MVP) integrating instant recognition and leaderboard features to track team performance more effectively. They refined their product based on initial feedback and internal testing, ensuring it addressed both their employee engagement needs and provided valuable insights for performance management.

During the ideation phase, they encountered challenges such as making the system user-friendly and ensuring it provided actionable insights. By iterating through multiple versions and incorporating advanced technologies like Natural Language Understanding, they overcame these hurdles, developing a robust solution that not only suited their needs but also resonated with larger organizations facing similar issues. The key lesson they learned was iterating based on real-world use and feedback to create a product that truly solves a pressing problem.

Is it profitable? Yes
How much money it makes: $420K/year

How 2 Founders Bootstrapped Karma Bot to $420K ARR in 2 Years

Read this case study

Read by 22 founders

3. Data Fetcher ($276K/year)

In 2020, Andy learned about a Google Sheets add-on called API Connector, which imports your data into a simple Google sheet.

Around the same time, Andy noticed the rise in popularity of Airtable.

Since Google Sheets and Airtable were close in compatibility, Andy decided to build a similar type of data integration tool for Airtable.

Andy’s 3-step method for coming up with ideas is helpful context for understanding how he came up with the idea: - Find a platform that is already growing massively. - Look at already successful tools for more mature platforms. - Build an equivalent tool for the new platform.

Is it profitable? Yes
What's the gross margin? 75%
How much money it makes: $276K/year
How much did it cost to start: $100

How I Built An Airtable Plugin That Lets Users Manage Their Data Better [$80K/Year]

Data Fetcher is a no-code tool that imports data into Airtable which has reached 190 paying customers in just over a year after launch and is making $6500 in MRR, with a goal of reaching $30k+ in MRR, for aspiring founders looking to bootstrap an app to life-changing revenue as a solo founder.

Read this case study

Read by 5,301 founders

Learn more about starting an IT consultant:

Where to start?

-> How much does it cost to start an IT consultant?
-> Pros and cons of an IT consultant

Need inspiration?

-> Other IT consultant success stories
-> Marketing ideas for an IT consultant
-> It consultant names

Other resources

-> It consultant tips

How much can you make with an IT consultant?

With a IT consultant, you can make an average of $5.3M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $100. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a IT consultant make a week?

Based on our data, average weekly revenue for a IT consultant ranges around $110K. As such, you could see monthly revenues of $442K.

To know if your IT consultant achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your IT consultant.

How much do IT consultants owners make?

The income of an IT consultant owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established IT consultant is about $110K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as an IT consultant owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

It Consultant Profit Margins

Generally speaking, an IT consultant can expect profit margin of around 90%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of an IT consultant, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, IT consultant owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, IT consultant owners can ensure long-term sustainability and profitability for their business.

It consultant owner salary

The salary of an IT consultant owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established IT consultant, in a prime position, might see an average weekly salary around the ballpark of $99.3K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a IT consultant may be a promising business to start - but the success of your IT consultant mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable IT consultant.

Part of

Becoming An It Consultant: Everything You Need To Know

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