--- title: "How to Avoid Financial Ruin Using Our Consultant Pricing Calculator: Use Case #1" description: "Avoid financial ruin using our Consultant Pricing Calculator: Use Case #1. Use the consulting rate calculator to quickly analyze recruiter's offers." image: https://www.sapbwconsulting.com/hubfs/Consulting%20Rate%20Calculator/Cast%20Study%201%20results%20top%20060817(1).png --- ![](https://www.sapbwconsulting.com/hubfs/Consulting%20Rate%20Calculator/Cast%20Study%201%20results%20top%20060817(1).png) # How to Avoid Financial Ruin Using Our Consultant Pricing Calculator: Use Case #1 Table of Contents ## [Consulting Rate Calculator](https://www.sapbwconsulting.com/consulting-rate-calculator-whats-your-rate): Use Case #1 ## (Expenses Not Paid) Scenario **TESTIMONIAL 1**: "This is the ideal, [best practice](https://www.sapbwconsulting.com/blog/5-kpi-design-best-practice-guidelines) employed by [leading consultancies](https://www.sapbwconsulting.com/fully-loaded-cost-calculator)." **TESTIMONIAL 2**: "The rate [calculator tool](https://www.sapbwconsulting.com/blog/what-is-the-tco-of-that-shinny-new-system-youre-about-to-buy) was awesome!!! " **[![How the consulting rate calculator works. Turn Job Descriptions into quick financial analysis.](https://www.sapbwconsulting.com/hs-fs/hubfs/Consulting%20Rate%20Calculator/Turn%20Something%20like%20this%20into%20something%20like%20this%20053117(7).png?width=669&name=Turn%20Something%20like%20this%20into%20something%20like%20this%20053117(7).png "How the consulting rate calculator works. Turn Job Descriptions into quick financial analysis.")](https://www.sapbwconsulting.com/consulting-calculator-job-offer-career-decision-analyzer-q1)** ## **A real example of how our [Consulting Rate Calculator](https://www.sapbwconsulting.com/charge-out-rate-calculator) was used in a live discussion to [avoid financial ruin](https://www.sapbwconsulting.com/marketing-and-sales-sla-calculator-service-level-agreement): Get Analysis Results in just 7 seconds.**   ### **Via Linkedin Discussion:**   **Blanket [Job Description](https://www.sapbwconsulting.com/sap-view-consultant-profiles-resumes-and-cv) sent to List of Potential Candidates by Technical Recruiter**   **From Technical Recruiting Manager** Remote [Project Manager](https://www.sapbwconsulting.com/blog/inbound-marketing/field-report-from-a-marketing-project-manager)- PM will use their 8+ years of IT focused exp to lead large scale [enterprise initiatives](https://www.sapbwconsulting.com/total-cost-of-ownership-tco) in a senior capacity. Client is a [global financial firm](https://www.sapbwconsulting.com/blog/inbound-marketing/does-pci-dss-compliance-affect-you). Successful PM's in this space has exp. leading large [multi-million $ projects](https://www.sapbwconsulting.com/blog/how-to-use-a-project-charter-to-start-a-project) in [financial](https://www.sapbwconsulting.com/blog/inbound-marketing/are-you-ready-to-think-grow-rich-mindmap) services firms, come from a PMO background and are technical. This is a W2 ONLY role and is 12 months in length.   **Reply from Potential Candidate**  ![Doug Ayers, Engineer, MBA, PMP](https://www.sapbwconsulting.com/hs-fs/hub/118735/file-560009032.png?width=320&name=file-560009032.png "Doug Ayers, Engineer, MBA, PMP") [Douglas Ayers Information Technology Officer](https://www.linkedin.com/in/douglas-ayers-information-technology-consultant-7130a11/) ## I saw your job advertisement. ## Are you paying travel expenses?   ### **Reply From Technical Recruiting Manager**   Thanks for the responses. This is [a W2 contract](https://www.sapbwconsulting.com/blog/inbound-marketing/speaking-at-the-fame-and-profit-summit-2022) and I am not using sub vendors. The role does not require travel so no expenses are paid. Must sit onsite in Minneapolis. Must have recent contracts 12+ months in [financial services](https://www.sapbwconsulting.com/blog/6-financial-management-excellence-tips). Please message me if you are interested!   ### **Reply from Potential Candidate**   Doesn't "onsite in Minneapolis" imply there is some kind of travel involved for the person doing the work and therefor expenses need to be paid by someone ([either client or consultant](https://www.sapbwconsulting.com/blog/inbound-marketing/learn-how-to-land-big-customers-using-multi-channel-marketing))? The only way there would be no travel involved, and therefore no travel expenses, would be you find someone already living in Minneapolis within driving distance to your office. It is also W-2 Contract 12 months. So in that case it [makes little sense](https://www.sapbwconsulting.com/blog/inbound-marketing/the-guaranteed-easiest-way-to-calculate-sla) for the person to move their residence to Minneapolis because in a year they will have to move again to a new city for the next job. What am I missing here? How is someone from out of town, non-local to Minneapolis, going to make this job work? This sounds like a "Non-Local(onsite)", "expenses not paid" scenario to me if you want to try out the rate calculator. [http://www.sapbwconsulting.com/blog/how-the-consulting-rate-calculator-works](https://www.sapbwconsulting.com/blog/how-the-consulting-rate-calculator-works)   ### **Reply From Technical Recruiting Manager**   Hi Doug, yes, most likely the candidate for this role will be local to the Twin Cities. If the position was a niche skill set with a small talent pool in the area, [I would look at additional options](https://www.sapbwconsulting.com/blog/inbound-marketing/10-ways-profound-knowledge-can-improve-building-landing-pages). Most of our clients provide "all-inclusive" bill rates which cover travel/parking etc. We do have many folks who relo to Minneapolis to accept 12 month contracts but that is not ideal for everyone certainly.   ### **Reply from Potential Candidate** Well I ran the [consulting](https://www.sapbwconsulting.com/get-sap-consulting-support-now) rate calculator as I recommended above:   The calculator’s [financial modeling](https://www.sapbwconsulting.com/blog/understanding-the-difference-between-value-model-and-value-case) says, the PM can just breakeven on expenses at $210/hr with zero [profits](https://www.sapbwconsulting.com/how-to-increase-profitability-sap-profitability-management-guide) for doing the work. If experienced PM’s typically charge a min of $150/hr plus expenses, then a proper all-in rate expectation would be $360/hr.   Is this in line with the all-in rate you initially had in mind? ** ** ### **Reply from Potential Candidate** **Looking at the Cash Flow at a rate of $210/hr:** Max out of pocket cash-on-hand needed: **-$32048**. At the end of 12 months, the PM will still be **-$16,528** in the hole on their cash trying to recover their initial cash outlays (**the project does not have a 12 month payback**).   They will need 18 months to go totally cash flow positive. The project will end 6 months before then so this person will likely lose money on this project looks like. Just the onsite Minnesota onsite [expenses](https://www.sapbwconsulting.com/blog/roce-return-on-capital-employed-simply-explained) does not go cash flow positive until month 10 and at month 12 has only put $12072 into the PM's bank account. Not much cash for 12 months of work at $210/hr.   ### **Reply from Potential Candidate [cont.]**   Here are the cost inputs taken fresh today (6/7/2017) from Orbitz.com   Job Type:** Non-local(onsite)**, Expenses paid: **no,** rate: $**210**/hr, **160** hours per month. Location: **Minneapolis**.   [Costing](https://www.sapbwconsulting.com/blog/how-to-determine-your-fully-loaded-cost-rate) is worst case assumption: You might get a better deal, you might not, plan on worst case. These prices are beyond the [consultant’s](https://www.sapbwconsulting.com/blog/how-to-build-a-sap-sem-bps-retail-industry-value-case) ability to control as they are set by Orbitz.com.   Assuming the person ultimately found is not in Minnesota and has to travel in from one of these end points. ### **Airfare**: - Seattle to Minneapolis $624 / wk *4 = $2496 / month - San Diego to Minneapolis $727 / wk *4 = $2908 / month - Houston to Minneapolis $777 / wk *4 = $3108 / month - Miami to Minneapolis $590 / wk *4 = $2360 / month - Boston to Minneapolis $592 / wk *4 = $2368 / month   **Hotel**: in Minneapolis $160/day *7 = $1120 / wk * 4 = $4480 / mo **Car**: in Minneapolis = $33 / Day * 6 = $231 * 4 = $924 / mo **Miscellaneous (ie. parking)** I threw in $200/month for that.   ## **CONSULTING RATE CALCULATOR TESTIMONIALS AND USER FEEDBACK** **TESTIMONIAL 1**: "This is the ideal, best practice employed by leading consultancies. The reality facing our industry today is an emergent culture by smaller firms, steeped in garden variety outsourcing practices. They discount the expenses part of the project cost and offer an All-inclusive rate."  **by Ted Olaye, Supply Chain Specialist, MBA, CSCP**   **TESTIMONIAL 1: **The calculator tool was awesome!!!  I'm in a slightly different industry from the SAP field, but I filled out the questionnaire and submitted my resume because one never knows where the network leads.  Also, it only took a few minutes to share my personal/[professional](https://www.sapbwconsulting.com/professional-services-learn-about-engaging-with-us) info after using a tool that probably took many hours to create, write instructions & format it for online usage.  You should be able to grab the stats of who used it.  Seemed fair enough to me. Again, awesome job! Rick " **by Richard Easler, Opus BPO**   To run the consulting rate calculator and to get your own job analysis, just press the button below to be taken to the start of the [consulting calculator](https://www.sapbwconsulting.com/consulting-rate-calculator-whats-your-rate).   [![FREE Consulting Rate Calculator](https://no-cache.hubspot.com/cta/default/118735/71be0dbe-5150-494e-9ad9-e0051bc88ab0.png)](https://cta-redirect.hubspot.com/cta/redirect/118735/71be0dbe-5150-494e-9ad9-e0051bc88ab0)    **ANALYSIS RESULTS** Note: the $210/hr breakeven rate is job description independent. It’s the rate anyone traveling weekly in to Minneapolis for any job will face.   **Calculator Output: Consolidated Income Statement (City A + City B)** [![Cast Study 1 Consulting Rate Calculator Results Output Income Statement](https://www.sapbwconsulting.com/hs-fs/hubfs/Consulting%20Rate%20Calculator/Cast%20Study%201%20results%20top%20060817(1).png?width=669&name=Cast%20Study%201%20results%20top%20060817(1).png "Cast Study 1 Consulting Rate Calculator Results Output Income Statement")](https://www.sapbwconsulting.com/consulting-calculator-job-offer-career-decision-analyzer-q1) ### **Calculator Output: Cont** [![Cast Study 1 Consulting Rate Calculator Results Output P&L](https://www.sapbwconsulting.com/hs-fs/hubfs/Consulting%20Rate%20Calculator/Cast%20Study%201%20results%20middle%20060817(1).png?width=669&name=Cast%20Study%201%20results%20middle%20060817(1).png "Cast Study 1 Consulting Rate Calculator Results Output P&L")](https://www.sapbwconsulting.com/consulting-calculator-job-offer-career-decision-analyzer-q1) ### **Calculator Output: Consolidated Cash Flow Statement (City A + City B)** [![Cast Study 1 Consulting Rate Calculator Results Output Cash Flow Statement](https://www.sapbwconsulting.com/hs-fs/hubfs/Consulting%20Rate%20Calculator/Cast%20Study%201%20results%20bottom%20060817(1).png?width=669&name=Cast%20Study%201%20results%20bottom%20060817(1).png "Cast Study 1 Consulting Rate Calculator Results Output Cash Flow Statement")](https://www.sapbwconsulting.com/consulting-calculator-job-offer-career-decision-analyzer-q1)   ## Setting Up A Consulting Rate Card Within the world of Professional Services, you will often hear the term Consulting Rate Card.  What is a consulting rate card?  Usually it is simply a table of job roles which list hourly rates, for example: - [Ecommerce](https://www.sapbwconsulting.com/blog/inbound-marketing/10-shortcuts-to-mastering-multi-channel-marketing) consultant hourly rate - Engineering consulting rates - HR consulting rates - Management consultant rates - [Hubspot consulting rates](https://www.sapbwconsulting.com/hubspot-consultant) - IT Consulting Rates - [Project Management](https://www.sapbwconsulting.com/understand-sap-program-manager-consulting-rates) consulting rates - SAP ABAP developer rates - [SAP Project Managers](https://www.sapbwconsulting.com/enterprise-services/sap-industry-solutions/sap-project-management) - Interim Executive Rates, i.e., CEO, CIO, CFO, CMO We designed our consulting rate calculator to allow both sides of the equation to determine a 'fair rate', based on facts.  We then had it validated by a finance professional to ensure our [methodology and approach](https://www.sapbwconsulting.com/blog/10-things-you-need-to-know-about-sap-s-hrms) was correct in fact and principle.   We now know and so do clients, whether the offer makes sense for all involved.   ## Shouldn't you make use of the same technology?   People Who Read This Also Read: - 14 Remote SAP [Consulting Mistakes](https://www.sapbwconsulting.com/blog/14-sap-remote-consulting-mistakes-you-don-t-know-your-making) You Don't Know You're Making - Top 10 Benefits for [Financial](https://www.sapbwconsulting.com/how-to-increase-profitability-sap-profitability-management-guide) Analysis in the [Latest SAP EP4](https://www.sapbwconsulting.com/blog/top-10-benefits-for-financial-analysis-in-the-latest-sap-ep4) - Learn What [Tools To Use](https://www.sapbwconsulting.com/blog/learn-what-tools-to-use-to-investigate-is-mill-functionality) To Investigate IS-Mill Functionality - Leverage SAP BW to Increase [Supply Chain Inventory](https://www.sapbwconsulting.com/blog/leverage-sap-bw-to-increase-supply-chain-inventory-accuracy) Accuracy     Topics from this blog: [Consultant Rates](https://www.sapbwconsulting.com/blog/topic/consultant-rates) [Consulting Rate Calculator](https://www.sapbwconsulting.com/blog/topic/consulting-rate-calculator) ### Download SAP BW Mindmap Learn what SAP Business Warehouse is and what it does in under five minutes [![Get this Mindmap](https://no-cache.hubspot.com/cta/default/118735/8db2ad37-8211-47a3-86ae-09b6b2bb297b.png)](https://cta-redirect.hubspot.com/cta/redirect/118735/8db2ad37-8211-47a3-86ae-09b6b2bb297b) [mailto:someone@yoursite.com](mailto:someone@yoursite.com) ### Doug Ayers I am an MBA, B.S. in Computer Engineering and certified PMP with over 33 years working experience in software engineering and I like to go dancing after work. I program computers, solve problems, design systems, develop algorithms, crunch numbers (STEM), Manage all kinds of interesting projects, fix the occasional robot or “thing” that’s quit working, build new businesses and develop eCommerce solutions in Shopify, SAP Hybris, Amazon and Walmart. I have been an SAP Consultant for over 10 years. I am Vice-President and Co-Founder of SAP BW Consulting, Inc. [View All Articles by Doug Ayers](https://www.sapbwconsulting.com/blog/author/doug-ayers) ## The SAP Blog Subscribe to our blog and receive SAP BW Updates, demand generation, inbound marketing, sales enablement, technology and revenue generation insights and ideas delivered right to your email. [mailto:someone@yoursite.com](mailto:someone@yoursite.com) ![SAP](https://googleads.g.doubleclick.net/pagead/viewthroughconversion/960101754/?value=0&guid=ON&script=0) ![](https://www.facebook.com/tr?id=199270410761059&ev=PageView&noscript=1) ```json { "@context" : "https://schema.org", "@id" : "https://www.sapbwconsulting.com/blog/consulting-rate-calculator-use-case-1#blogposting", "@type" : "BlogPosting", "about" : [ { "@type" : "Thing", "name" : "Consultant", "sameAs" : "https://en.wikipedia.org/wiki/Consultant" }, { "@type" : "Thing", "name" : "Rate (mathematics)", "sameAs" : "https://en.wikipedia.org/wiki/Rate_(mathematics)" }, { "@type" : "Thing", "name" : "Calculator", "sameAs" : "https://en.wikipedia.org/wiki/Calculator" }, { "@type" : "Thing", "name" : "Business", "sameAs" : "https://en.wikipedia.org/wiki/Business" }, { "@type" : "Thing", "name" : "Cost", "sameAs" : "https://en.wikipedia.org/wiki/Cost" } ], "audience" : { "@type" : "Audience", "audienceType" : "Consultants, Business Professionals, Project Managers", "description" : "This blog is intended for consultants, business professionals, and project managers looking to determine their consulting rates effectively using a calculator." }, "author" : { "@id" : "https://www.sapbwconsulting.com/about-lonnie-ayers#person" }, "description" : "Explore the use case of the Consulting Rate Calculator and how it can help you determine your consulting rates effectively.", "headline" : "Consulting Rate Calculator Use Case 1", "inLanguage" : "en", "mainEntityOfPage" : { "@id" : "https://www.sapbwconsulting.com/blog/consulting-rate-calculator-use-case-1#webpage" }, "mentions" : [ { "@type" : "Thing", "name" : "Consultant", "sameAs" : "https://en.wikipedia.org/wiki/Consultant" }, { "@type" : "Thing", "name" : "Rate (mathematics)", "sameAs" : "https://en.wikipedia.org/wiki/Rate_(mathematics)" }, { "@type" : "Thing", "name" : "Calculator", "sameAs" : "https://en.wikipedia.org/wiki/Calculator" }, { "@type" : "Thing", "name" : "Business", "sameAs" : "https://en.wikipedia.org/wiki/Business" }, { "@type" : "Thing", "name" : "Cost", "sameAs" : "https://en.wikipedia.org/wiki/Cost" }, { "@type" : "Thing", "name" : "Planning", "sameAs" : "https://en.wikipedia.org/wiki/Planning" }, { "@type" : "Thing", "name" : "Pricing", "sameAs" : "https://en.wikipedia.org/wiki/Pricing" } ], "name" : "Consulting Rate Calculator Use Case 1", "potentialAction" : { "@type" : "ViewAction", "name" : "The Consulting Rate Calculator", "target" : { "@type" : "EntryPoint", "actionPlatform" : [ "http://schema.org/DesktopWebPlatform", "http://schema.org/MobileWebPlatform" ], "inLanguage" : "en", "urlTemplate" : "https://www.sapbwconsulting.com/consulting-calculator-job-offer-career-decision-analyzer-q1" } }, "publisher" : { "@id" : "https://www.sapbwconsulting.com#organization" }, "url" : "https://www.sapbwconsulting.com/blog/consulting-rate-calculator-use-case-1" } ``` ```json { "@context" : "https://schema.org", "@id" : "https://www.sapbwconsulting.com#website", "@type" : "WebSite", "inLanguage" : "en", "name" : "SAP BW Consulting, Inc.", "publisher" : { "@id" : "https://www.sapbwconsulting.com#organization" }, "url" : "https://www.sapbwconsulting.com" } ``` ```json { "@context" : "https://schema.org", "@id" : "https://www.sapbwconsulting.com#organization", "@type" : "Organization", "logo" : { "@id" : "https://www.sapbwconsulting.com#logo" }, "name" : "SAP BW Consulting, Inc.", "sameAs" : [ "https://www.linkedin.com/company/543163/admin/", "https://www.youtube.com/user/SAPBWConsulting/", "https://twitter.com/Lonniea39", "https://www.facebook.com/SAPBWConsulting" ], "url" : "https://www.sapbwconsulting.com" } ``` ```json { "@context" : "https://schema.org", "@id" : "https://www.sapbwconsulting.com#logo", "@type" : "ImageObject", "caption" : "SAP BW Consulting, Inc. logo", "url" : "https://www.sapbwconsulting.com/hs-fs/hubfs/sapbw-consulting.png?width=2847&name=sapbw-consulting.png" } ``` ```json { "@context" : "https://schema.org", "@id" : "https://www.sapbwconsulting.com/about-lonnie-ayers#person", "@type" : "Person", "name" : "Lonnie D. 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