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The Anatomy of a Consulting Firm Figure 2: Guru associates Level Requirements for Average Project (By Number of Partners) Target Utilization Required Staffing For 6 Projects @Target Utilization Required Staffing For 12 Projects @Target Utilization Senior 50% of 1 person 75% 4 8 Middle 1 person 75% 8 16 Junior 3 people 90% 20 40 Copyright 2005 David H. Maister Page 16 of 16 www.davidmaister.com
The Anatomy of a Consulting Firm Figure 3: The Economics of Guru Associates Level No. Utiliza -tion Available Hours to Bill* Billing Rate Billings Senior 4 75% 6,000 $200 $1,200,000 Individual Salary Total Salaries Middle 8 75% 12,000 $100 $1,200,000 $75,000 $ 600,000 Junior 20 90% 36,000 $ 50 $1,800,000 $32,000 $ 640,000 Total $4,200,000 $1,240,000 Contribution to Overhead and Profits = Billings - Salary Costs = $4,200,000 ($1,240,000) $2,960,000 Assume overhead costs of $40,000 per professional: Overhead $1,280,000 Partner Profits $1,680,000 Per Partner $ 420,000 Copyright 2005 David H. Maister Page 17 of 17 www.davidmaister.com
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