How Much HR Consulting Owners Make: $150k Pay, 18-Month Breakeven
Under the researched assumptions, HR consulting owner income starts with a planned $150,000 annual founder salary, but that pay is not the same as business profit The model shows about $217,000 in Year 1 revenue with -$151,000 EBITDA, so early owner pay may need outside cash support By Year 2, inferred revenue is about $757,000 and EBITDA is $97,000, with breakeven in Month 18 By Year 5, revenue reaches about $56 million and EBITDA reaches $4076 million before taxes, reserves, debt, and distributions
Owner income$150k baseNet margin−695% to 728%Revenue for target pay≈$198k–$5.5MBusiness difficultyHard
Want the six HR consulting income drivers?
1
Pricing Mix
$175-$245
Hourly rates rise from $175 to $245 and project rates from $200 to $220, so each booked hour carries more owner cash.
2
Retainers
40%-85%
Mix shifting from 40% to 85% raises recurring revenue and makes each client-month worth about $2.6K in Year 1 and $3.7K by Year 5.
3
Utilization
15-29h
Retainer hours rise from 15 to 19 and project hours from 25 to 29, so empty consultant time hits profit fast.
4
Leverage
24%-12%
The combined variable and COGS load falls from 24% to 12%, so each new consultant hour keeps more gross margin.
5
Client Growth
$1.5K-$0.8K
CAC drops from $1.5K to $800, so the same marketing spend buys more clients and shortens payback.
6
Overhead
$78.6K
Fixed overhead is $78.6K a year, and with Year 1 EBITDA at -$151K, tight spending is what gets you to Month 18 breakeven.
Want to test your HR consulting owner income?
Owner income calculator
Estimate owner take-home and the gap to target pay from revenue, margin, labor, fixed overhead, marketing, reserves, and target pay.
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Planning note: Research-based planning estimate only. It is not guaranteed salary, tax advice, or owner distribution advice.
How do you check owner income in the HR Consulting model?
This screenshot shows the dashboard, income outputs, assumptions, staffing, forecast, profit, and owner pay. Open the HR Consulting Financial Model Template.
Owner-income model highlights
Retainers, projects, ad-hoc
Revenue: $217k to $56M
EBITDA: -$151k to $4,076M
Breakeven: Month 18
Cash need: $694k minimum
How does solo HR consultant income compare with a small firm?
For HR Consulting, solo income usually starts cleaner because payroll stays light, but the owner still hits a ceiling fast from sales, admin, client calls, and compliance research. In the small-firm model, non-founder payroll rises from $72,500 in Year 1 to $520,000 in Year 5, so capacity grows, but take-home only improves if pricing, client volume, and utilization hold. EBITDA moves from -$151,000 to $4.076 million by Year 5, but hiring does not automatically raise the owner’s pay.
Solo income
Lower payroll keeps cash needs light.
Owner hours cap billable revenue.
Sales still take time.
Compliance work still lands on the owner.
Small firm
Adds senior, junior, and admin staff.
Non-founder payroll grows to $520,000.
Capacity expands, but utilization risk rises.
Year 5 EBITDA is $4.076 million only if the model holds.
How much revenue does an HR consulting business need to pay the owner?
An HR Consulting business needs about $416,000/year in revenue to pay the owner $150,000 and break even on EBITDA, meaning cash profit before interest, taxes, depreciation, and amortization; for the main operating metric behind that target, see What Is The Main Success Indicator For Your HR Consulting Business?. Here’s the quick math: ($150,000 + $72,500 + $78,600 + $15,000) / 76% = ~$416,000.
Owner Pay Math
Target owner pay: $150,000
Non-owner payroll: $72,500
Fixed overhead: $78,600
Marketing budget: $15,000
Model Reality
Contribution margin: 76%
Year 1 revenue: ~$217,000
Year 1 EBITDA: ~-$151,000
Year 2 revenue: ~$757,000
How many HR consulting retainer clients or billable hours are needed?
There isn’t one fixed answer for HR Consulting. At 15 hours per month and $175 an hour, one retainer client brings in $2,625 a month, so 10 clients equals about $26,250 before expenses. That same logic also works for project work at 25 hours × $200 = $5,000 and ad-hoc support at 5 hours × $225 = $1,125.
Retainer math
1 client = $2,625 monthly
10 clients = $26,250 monthly
15 hours per client each month
150 hours at 10 clients
Margin drivers
40% retainer mix in Year 1
85% retainer mix in Year 5
Scope creep can erode margin
Renewals and utilization set profit
Key Takeaways
Retainers drive steadier revenue than project work.
Headcount grows fast, so margin needs tight control.
Cash needs are high before payback arrives.
Compare lean, base, and high HR consulting owner income scenarios
Owner income scenarios
Income swings with revenue mix, direct costs, staffing, and marketing. Year 1 is loss-making, Year 3 is profitable, and Year 5 shows the strongest scale.
Low, base, and high cases show how wage load and marketing shape owner income.
Scenario
Low CaseDownside case
Base CaseCore case
High CaseUpside case
Launch model
This is the lower earnings path, built from Year 1 economics and a negative EBITDA base.
This is the modeled middle path, built from Year 3 scale and strong positive EBITDA.
This is the stronger earnings path, built from Year 5 scale and the highest EBITDA case.
Typical setup
Year 1 runs at about $217,000 revenue, $150,000 founder pay, $222,500 total wages, a 24% variable plus direct-cost load, $78,600 fixed overhead, and $15,000 marketing.
Year 3 reaches about $1.765 million revenue, $510,000 wages, an 18% variable plus direct-cost load, $50,000 marketing, and $809,000 EBITDA.
Year 5 reaches about $5.596 million revenue, $670,000 wages, a 12% variable plus direct-cost load, $100,000 marketing, and $4.076 million EBITDA.
Cost drivers
Year 1 revenue $217,000
founder salary $150,000
total wages $222,500
24% variable plus COGS load
$15,000 marketing
Year 3 revenue $1.765 million
$510,000 wages
18% variable plus COGS load
$50,000 marketing
larger consultant bench
Year 5 revenue $5.596 million
$670,000 wages
12% variable plus COGS load
$100,000 marketing
larger consultant bench
Owner income rangeBefore owner reserves
-$151,000Negative EBITDA
$809,000Modeled profit
$4,076,000Scale profit
Best fit
Use this to stress-test cash flow if the founder is still carrying most of the work and marketing stays light.
Use this as the core planning case for a steady mix of retainers, projects, and ad-hoc work.
Use this to test upside if the firm adds staff and keeps revenue scaling into Year 5.
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Planning note: Scenario ranges are researched planning assumptions, not guaranteed earnings, salary promises, tax advice, or distributions.
HR Consulting Core Six Income Drivers
Pricing And Service Mix
Retainers, Projects, and Hours
Pricing drives revenue quality before cost cuts do. In Year 1, the model uses $175 for retainers, $200 for projects, and $225 for ad-hoc hourly work; by Year 5, those rates rise to $195, $220, and $245. Retainers build steady cash flow, projects can lift margin fast, and hourly work can look rich but stay choppy.
That mix matters because HR work should be sold around deliverables, not vague access. Compliance audits, handbooks, fractional HR support, and advisory work need clear scope, so the owner can protect gross margin and avoid unpaid scope creep. If the offer is not tied to output, take-home pay gets squeezed even when revenue looks strong.
Price to Scope and Capacity
Measure each offer by scope, gross margin, and hours used. A simple check is: expected fee divided by expected delivery time. If a client wants broad HR access but pays like a small project, the owner is funding the gap with unpaid labor.
Keep the mix balanced on purpose. Use retainers for base income, projects for larger one-time work, and ad-hoc only when the rate is worth the fragmentation. Year 5 pricing of $195, $220, and $245 should rise with the value delivered, not just with the calendar.
Client Acquisition And Sales Pipeline
Client Acquisition And Sales Pipeline
Pipeline is not income until a contract is signed and work is delivered. In this model, marketing spend rises from $15,000 in Year 1 to $100,000 in Year 5, while CAC improves from $1,500 to $800. Here’s the quick math: that is about 10 client wins at first and 125 later, but only if close rates hold. A weak pipeline leaves idle payroll and cuts owner take-home.
The inputs that matter are leads, close rate, signed retainer revenue, project backlog, and retention. More leads help only if they fill billable capacity; otherwise sales spend turns into dead cash. A thin pipeline delays cash in, so the owner keeps paying staff and still has less to draw.
Track booked work, not leads
Track booked retainer revenue and project backlog by month, not just leads. Measure CAC by channel, then compare it with the value of the first 90 days of work. Referrals can lower cash cost, but they still use owner selling time, so time spent on sales should be counted too.
Set a rule that new bookings must support expected utilization before adding payroll. If signed work does not cover next-month delivery, pause spend, tighten targeting, and push renewal asks earlier. The goal is a pipeline that turns into paid hours fast enough to protect margin and keep owner distributions steady.
Overhead, Reserves, And Reinvestment
Overhead, Reserves, and Reinvestment
$6,550 in monthly fixed costs cuts current owner take-home, but it protects the firm. That bucket includes office rent, software, insurance, legal and accounting, hosting, utilities, and admin supplies. Here’s the quick math: if bookings slow, these costs still hit, so reserve cash matters as much as revenue.
First-year setup capex is $57,000, and minimum cash need reaches $694,000. Breakeven lands in Month 18, and payback in Month 30, so owner pay stays tight early. Keep taxes outside the income estimate, or you’ll overstate take-home and underfund the business.
Separate Fixed Costs From Nice-to-Haves
Track three lines every month: necessary overhead, discretionary spend, and reserve cash. If an expense doesn’t protect delivery, compliance, or client service, cut it first. One clean rule: protect the $6,550 core, but review anything outside that bucket before it reduces owner pay.
Build the forecast from cash, not just profit. Use breakeven Month 18 and payback Month 30 as guardrails, then stress test slower sales and delayed collections. If cash gets thin, delay reinvestment before you touch essential overhead.
Billable Utilization And Capacity
Billable Utilization
Billable utilization is the share of available time that becomes paid client work. In Year 1, the model assumes 15 retainer hours, 25 project hours, and 5 ad-hoc hours at $175 to $225 per hour, or about $2,625 per client-month. By Year 5, that rises to 19, 29, and 7 hours at $195 to $245, or $3,705.
Protect Billable Hours
Utilization means billable hours ÷ total available hours. Track non-billable time in sales, admin, client management, quality review, and continuing HR compliance knowledge. If utilization slips, payroll stays fixed but revenue falls, so owner distributions shrink. Keep each retainer tied to hours or deliverables, and cap scope creep before it eats margin.
Track hours by service line.
Compare sold vs. used hours.
Review margin by client monthly.
Set a cap on unpaid work.
Recurring Client Base And Retention
Recurring Retainer Base
Recurring HR consulting income steadies owner pay because it cuts the need to re-sell every month. In the model, the retainer mix rises from 40% in Year 1 to 85% in Year 5, and the retainer value per client-month grows from $2,625 to $3,705. That can lift cash flow, but only if renewals stay strong and support stays in scope.
What this driver includes: renewal rate, monthly retainer revenue, hours used, and gross margin by client. Recurring revenue is not the same as profit. If scope creep, slow renewals, or underpriced support push hours up, owner draw falls even when top-line revenue looks stable.
Protect Margin by Client
Track each retainer like a mini P&L. Here’s the quick math: compare monthly fee to hours used and the gross margin left after delivery time. If a client’s support load keeps rising without a price reset, the retainer can feel busy but still drain cash.
Use a simple control set: renewal rate, retainer hours, gross margin, and scope changes. Renew early, document what is included, and reprice when usage climbs. One clean rule helps: if the work needs more hours than the retainer covers, the owner should raise price or narrow scope.
Staffing Model And Delivery Margin
Consultant Leverage and Delivery Margin
This driver is the spread between what clients pay and the direct cost to deliver the work. In Year 1, staffing is the founder, 0.5 senior consultant, and 0.5 admin, with wages at $222,500. By Year 5, the model reaches 6 delivery FTE plus business development and admin support, and wages rise to $670,000. Owner income improves only when billable work stays priced above loaded labor cost.
The key inputs are utilization, review time, and client continuity. If consultants are underbooked or need heavy QA, payroll climbs faster than revenue, so margin shrinks. Contractor hires can protect cash flow, but employees can improve control and retention. The choice comes down to whether each seat stays profitable at the target rate.
Measure Booked Hours, Not Headcount
Track utilization, meaning billable hours as a share of available hours, plus revenue per delivery FTE and gross margin by client. That is the cleanest way to see whether added staff supports owner pay or just adds cost.
Watch booked hours weekly.
Tag review time by client.
Set margin targets per seat.
Use contractors for variable demand.
Here’s the quick math: $670,000 in Year 5 wages needs steady booked work to avoid squeezing distributions. If a consultant’s load drops, the margin leak shows up fast in payroll before it shows up in revenue.
