pdf version - David Maister
pdf version - David Maister
pdf version - David Maister
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The Anatomy of a Consulting Firm<br />
Figure 3: The Economics of Guru Associates<br />
Level No. Utiliza<br />
-tion<br />
Available<br />
Hours to<br />
Bill*<br />
Billing<br />
Rate<br />
Billings<br />
Senior 4 75% 6,000 $200 $1,200,000<br />
Individual<br />
Salary<br />
Total<br />
Salaries<br />
Middle 8 75% 12,000 $100 $1,200,000 $75,000 $ 600,000<br />
Junior 20 90% 36,000 $ 50 $1,800,000 $32,000 $ 640,000<br />
Total $4,200,000 $1,240,000<br />
Contribution to Overhead and Profits =<br />
Billings - Salary Costs = $4,200,000<br />
($1,240,000)<br />
$2,960,000<br />
Assume overhead costs of $40,000 per professional:<br />
Overhead $1,280,000<br />
Partner Profits $1,680,000<br />
Per Partner $ 420,000<br />
Copyright 2005 <strong>David</strong> H. <strong>Maister</strong> Page 17 of 17 www.davidmaister.com
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