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What Type of Consulting Business Model Should You Adopt

What Type of Consulting Business Model Should You AdoptWhen you start up your new IT business, put some thought into the type of consulting business model you want to adopt.

As a small IT consulting firm, your edge comes from the fact that you are more agile, more human, and have less overhead than some of the more corporate competition.

You have a couple of decisions that you need to make to determine the type of business model you end up using. There are positives and negatives associated with each choice you make.

Here are the two main items to consider for your pricing and positioning:

IT Consulting Pricing Structures

  • Time and Materials – This can be the most equitable way of charging customers, but time logging can be onerous. It can also lead to a strained relationship with your client as well as them watching over your shoulder at every move.

  • Fixed Pricing – Charging fixed prices is sometimes seen as a risk by the client and/or by the consultant. Fixed pricing does give the client some comfort that she or he knows exactly what their costs are going to be up front. After a while, the risks become minimal as you’ll become an expert at judging the right price for you and the client on each project based on your previous experience.

  • Niche Consulting – Finding a niche is never a bad thing as long as there is enough work in that market to sustain your business. The only issue is that too much immersion or in-depth knowledge can lead to the dulling of your strategic business thinking. It can also lead to bias towards certain technologies.

  • Generalist Consulting – Being a generalist can be an advantage. It can enable you to think from a strategic position, but it may mean that you have to bring in specialist assistance to implement projects fully.

IT Consulting Market Positioning

As you can see, many options will determine the type of consulting business model that you use. You can mix and match certain of these depending on the situation so that you can offer a broader range of services, but you must clearly identify which services that you offer in each circumstance.


What type of consulting business model have you adopted and how has it benefited your business? Share your thoughts with us in the Comments section below.  


And to follow-through on the tips introduced in this short article, be sure to download your free copy of the special report on How to Start a Computer Consulting Business: 6 Proven Ways to Build Your Initial Client Base

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