Is Business Consulting Worth the Money? Real ROI Math
Consultants sell results, but is there proven data? We've collected 6 ways to measure ROI on business consulting - and the averages we see in the field.
By Eitan Eshtemaker
Skepticism about business consulting is justified. The market is full of big claims that are hard to verify. But when you look at the data - a clear picture emerges: the right consulting pays back. The wrong consulting: waste.
Average ROI on business consulting per research: every $1 invested in business coaching returns $7 on average. In businesses we've worked with at Plan B: average profitability improvement of 22% within 12 months. The real ROI depends on 3 things: is the consulting measurable? Is the client implementing? Is the consultant experienced in your industry?
6 ROI metrics you can quantify
Increase in gross margin after pricing corrections.
Conversion rate improvement that lowers cost per lead.
Shorter sales cycle that improves cash flow.
Overhead reduction through process improvement.
Customer retention growth from more focused service.
Owner hours freed up for revenue-generating activity.
Real example from the field
Apparel import business, 8 employees: revenue $1.4M, profit 3%. After 9 months of engagement: revenue $1.6M, profit 11%. Consulting cost: $14,000/year. Profit add: $130,000. ROI: 9.4x.
Part of the improvement: repricing three product lines, closing one losing line, and renegotiating with main supplier.
When consulting doesn't pay off
When the business doesn't implement - gets a plan, doesn't execute.
When the consultant isn't focused on measurable results.
When the owner isn't ready for change (a consultant doesn't replace decisions).
When the price exceeds the expected benefit in year one.
Questions to ask before paying
What's your proof of success with a business similar to mine?
What will our success metrics be after 90 days?
What percentage of your clients stay past 6 months? (quality indicator)
Our approach at Plan B Business
We define measurable financial goals before starting any engagement. In the diagnostic session ($290) we show the financial upside, and only then propose engagement. If we don't see clear ROI potential - we won't recommend engagement.