In IT consulting it is important to know the relationship between hourly billing rates and salary affordability so you can properly plan for both your own salary draw, as well as salaries of future technical and sales-related staff.

This is directly related to one of the biggest mistakes you can make when starting your IT consulting business.

Don't Give Away Your Services

Many new IT consultants give away their services for ridiculously unsustainable rates, like $25 or $30 an hour, because they're emulating the wrong people in the market.

They're copying the computer repair technicians or other moonlighters, and it's not possible to ever be able to have a sustainable business.

Value your IT Consulting Business

There is a very definite relationship between what your clients pay your consulting firm, your hourly billing rate, and the kind of salary package you can ultimately offer your sales and technology staff. Even if you don't plan on hiring additional staff, you have to consider that you are doing the work and you need to be compensated appropriately.

Don't Underestimate

Your IT consulting company is going to hit a brick wall and you're going to hit a brick wall if you underestimate the expenses and what you need to be charging.

If your billing rates are at a certain level, you're eventually going to find that you're going to have an extremely difficult time attracting the kind of staff that's required to recruit and service sweet spot IT consulting clients.

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