Are You Worth the Salary You Used to Make?
Your last salary is as relevant to your consulting rate as your shoe size.
That number on your last W-2 has absolutely nothing to do with what you should charge as a consultant.
Yet when we surveyed solo consultants this spring most used their corporate salary to set their rate.
If that sounds familiar, you're leaving 50-70% of your potential revenue on the table.
Key Takeaways
Your employee salary reflected your cost to a company, not the value you created
The real pricing formula: Impact × Urgency × Scarcity = Your Rate
Most consultants deliver 3-10x more value than their salary ever reflected
Your expertise becomes exponentially more valuable when applied strategically
Think outcomes not hourly rates.
What Your Salary Actually Represented
Your salary was never about your value. It was about:
Risk mitigation for your employer (they paid you whether projects succeeded or failed)
Availability tax (they owned 40+ hours of your week)
Overhead absorption (your salary covered their inefficiencies)
Market minimums (the least they could pay to keep you from leaving)
When you solved a $2M problem at your company, did your salary jump by $200K? Of course not. You got a 4% raise and maybe a plaque.
As a consultant, you capture that value directly.
How to Calculate Your Real Worth
Forget the salary-divided-by-hours nonsense. Here's the formula that actually works:
Impact × Urgency × Scarcity = Your Rate
Let me break this down:
Impact: The measurable difference you make
Revenue generated
Costs eliminated
Time saved
Risk reduced
Urgency: How badly they need it solved NOW
Regulatory deadlines
Market windows
Competitive threats
Board presentations
Scarcity: How many people can do what you do
Specific industry experience
Unique methodology
Proven track record
Available bandwidth
Real Examples from Real Consultants
Sarah, IT Security Consultant
Last salary: $125,000
Old consulting rate: $75/hour (salary math)
Impact identified: Preventing breaches that average $4.35M
New rate: $15,000/week for security audits
Result: 3.5x revenue increase
Marcus, Operations Consultant
Last salary: $95,000
Old consulting rate: $100/hour ("premium" over salary)
Impact identified: Supply chain optimization saving $2M+ annually
New rate: $50,000 per optimization project
Result: Working 6 months, earning 2x previous annual salary
Jennifer, Marketing Strategist
Last salary: $110,000
Old consulting rate: $125/hour
Impact identified: Customer acquisition cost reduction of 40%
New rate: $25,000/month retainers
Result: 5 clients, $1.5M annual run rate
The Mindset Shifts You Need to Make
1. Stop Selling Time, Start Selling Transformation
Your client doesn't care how many hours you work. They care about reaching their destination. Price the journey, not the fuel.
2. Your Expertise Compounds
Every project makes you more valuable, not less. Your rates should reflect your growing expertise stack.
3. Scarcity Is Your Friend
The narrower your focus, the higher your rates. "Marketing consultant" = commodity. "B2B SaaS customer retention specialist for Series B companies" = premium.
4. You're Not Looking for a Job
Stop pricing like you're grateful for work. Price like you're selecting which high-impact problems deserve your attention.
Building Your Value Inventory
Time to get specific about your worth. Answer these questions:
Step 1: Quantify Your Corporate Impact
What was the biggest problem you solved?
What was it worth to the company?
How long did it take you?
Who else could have done it?
Step 2: Identify Your Unique Value Stack
Industry expertise (years, specific sectors)
Technical skills (certifications, methodologies)
Relationship capital (who you know)
Pattern recognition (what you've seen)
Step 3: Calculate Your Minimum Viable Rate
Annual income target ÷ 1,000 billable hours
(Yes, only 1,000. You're not a machine.)
This is your FLOOR, not your ceiling
Step 4: Find Your Value Multiplier
Average project value you deliver
Divide by time invested
This is your hourly value creation
Your rate should be 20-30% of this
Common Objections (And Why They're Wrong)
"But I don't have the credentials they had at corporate" Your results are your credentials. Period.
"The market won't bear those rates" You're not serving "the market." You're serving specific clients with specific expensive problems.
"I need to build up to higher rates" Based on what? This thinking keeps you stuck. Test high, adjust if needed.
"What if they say no?" Then you've qualified them out. Better to know early than waste time on bad fits.
The Bottom Line
Your salary was a rental fee for your potential. As a consultant, you're selling realized value. These are fundamentally different transactions.
Stop letting a number from your past dictate your future pricing. Your expertise, applied strategically to the right problems, is worth far more than any salary ever reflected.
Next week, we'll tackle the mechanical side: how to make it ridiculously easy for clients to say yes to your new rates.
Ready to calculate your real worth? Check out the rate estimator at www.pricewisely.me
Have questions about your specific situation? Hit reply and let me know. I read every email.
Based on insights from 200+ consultants who are successfully charging what they're worth.