Margin per consultant
Revenue a consultant bills minus their fully-loaded day cost, in euros or as a percent of revenue. No canonical formula exists, so state which costs you load in.
Definition
Margin per consultant is the revenue a consultant bills over a period minus the cost of that consultant for the same period. Billed revenue is the day rate multiplied by billed days. The cost side is the consultant's fully-loaded day cost multiplied by days. The loading floor is salary plus employer contributions; tooling and an overhead allocation are optional additions.
The result is readable in euros or as a percent of revenue. A close relative is a ratio sometimes called the gross margin percentage, computed as day rate minus day cost divided by day rate, which measures the same quality of a mission. Because loading choices differ, two firms can report different margins on one consultant, so every comparison requires stating which costs were loaded in.
Formula
Margin per consultant = (day rate x billed days) minus (fully-loaded day cost x days). No canonical formula: the result depends on which costs you load in, salary plus employer contributions at minimum, tooling and overhead allocation optional. State your loading.
Example: A consultant billed 500 EUR per day for 18 days brings in 9,000 EUR. With a loaded cost of 350 EUR per day, the cost is 6,300 EUR. The margin is 2,700 EUR, which is 30% of revenue.
Why it matters
A company average margin can stay healthy while individual consultants lose money. A consultant on a high day rate who is barely billed, or a cheap consultant on a discounted mission, both hide inside the aggregate. Reading margin per consultant shows whether a problem is a rate problem or a utilization problem, and those need opposite fixes. Commonly cited figures put gross margins for consulting firms around 25 to 35%, but that is a range people repeat, not a law. The trend of each consultant and the spread across the roster carry more information than any single average.
How to improve margin per consultant
- 1
Review margin per consultant every month. The drift is invisible in company averages and obvious once you sort the roster from lowest to highest margin.
- 2
Separate rate problems from utilization problems. The same margin loss can come from a low day price or from few billed days, and the two need opposite fixes.
- 3
Renegotiate or reprice any mission below your margin floor before it renews automatically. A quiet renewal locks the loss in for another year.
How Okouro shows it
Okouro stores the cost and the billing rate together per consultant and per mission, so margin computes continuously at both levels. Cost fields stay hidden from consultants by role, and a free plan lets you test the tracking before paying.