Small businesses sell themselves short on charge-out rates

A significant number of small consulting firms are selling services to major consultancy markets at rates well below average, and below same-size competitors selling to the same markets.

This is one of the messages in the report Future Markets for Management Consultancy 1996, to be published later this month. The report illustrates growth currently taking place in different industry sectors and also shows the average rates being charged by different-sized consulting firms, broken down by type of service offered.

One of the major surprises in the report is that some small firms are currently charging senior IT consultants to the financial sector at day rates which are 15 per cent higher than rates charged by Big Six firms.

However, when it comes to selling similar services to central government, small firms are charging rates around 28 per cent lower than their larger competitors.

Pressure on rates has intensified in the public sector market in recent years, and looks set to fall in the financial sector as purchasers seek to obtain better prices from consultants.

Future Markets for Consultancy 1997 (74 tables) is available from Management Consultancy, VNU Business Publications BV, 32-34 Broadwick Street, London W1A 2HG. Price #65.