Business Consultant Rates: Hourly vs. Project-Based (And Why There's a Better Model)
Most business consultants charge by the hour or by the project. Both models have hidden costs. Here's what to look for — and why we built Plays differently.
When you are thinking about hiring a business consultant, one of the first questions is always the same: how much is this going to cost?
The problem is that the answer depends on how they charge. And the two most common models — hourly rates and project-based pricing — both have problems that are rarely discussed upfront.
Hourly rates: transparent on the hour, opaque on the total
Let's start with hourly billing because it feels the most straightforward. The consultant tells you their rate — say, $150 an hour — and you know exactly what it costs to talk to them.
Except you don't. Because what you don't know is how many hours it will take.
A good consultant might solve your problem in four hours. A less experienced one might need twelve. From the consultant's point of view, this creates a strange incentive: if I am being paid by the hour, I have no financial reason to be fast. I am not being rewarded for efficiency — I am being rewarded for time spent.
Think about what that means on your end. You hired someone to solve a problem. The faster they solve it, the less you pay. The slower they solve it, the more you pay. Time spent is what you are paying for, not the outcome.
Eighteen years of consulting work means I can often deliver in a single day what takes someone else a week. Why should you pay me three times as much just because I got it done quicker?
And here is the bigger problem: you never know what the final bill will be. A consultant says "this should take about ten hours," but scope changes. Questions come up. Small additions are made. You receive an invoice for eighteen hours and feel stung. The consultant feels they gave good value. Both of you are frustrated.
Project-based fees: budget certainty, hidden costs
Project-based pricing solves the uncertainty problem. You agree on a scope, you agree on a price, and that is what you pay.
This feels safer. You know the number before you start.
The catch is scope creep. The initial brief often misses things. A consultant might have nailed the brief — but if the brief was wrong, they will deliver the right solution to the wrong problem at the right price. Anything outside the original scope becomes a variation, and variations cost more.
From the client's perspective, this can feel like being nickel-and-dimed. You accepted their proposal. Work started. Now small changes that seem reasonable are being charged as extras. A conversation that should take twenty minutes gets billed as a "change request."
The consultant sees it differently: they agreed to specific deliverables, you have asked for more, so more costs more.
Both perspectives are correct. That is why project-based billing, though it seems straightforward, often ends in tension.
What hourly billing actually tells you about incentives
There is something worth saying about what any billing model reveals.
If a consultant is paid by the hour, the incentive is to spend hours. That does not make them a bad person — they are just responding to how they are compensated. Same with project-based billing: the incentive is to stay within the defined scope, which means minimising change and adaptation.
Neither of these incentives is aligned with what you actually want: a clear outcome, delivered efficiently, with no surprises on cost.
The Plays model as a third option
When I founded NXT Innings, I knew I wanted to charge differently.
Every piece of work is a Play. Before any work starts, the outcome and the price are agreed. You review it. You approve it. Then we deliver it. That is it.
You are not paying for hours. You are not paying for a project. You are paying for a specific result, with a specific success metric attached to it.
A Play might be "increase inbound website leads by 10%" or "reduce the time it takes to produce and send a quote by 30 percent." The Play has a price, and a success metric. Before work starts, you know what you are paying for and what success looks like.
Here is the thing: the research and refinement behind a Play might take ten hours. It might take twenty. That is our investment. We do not charge you to learn how to do our job better — we charge you for the outcome. The learning is ours to carry.
What this means for you in practice
If you hire NXT Innings, this is what actually happens.
You approve the Play. Work starts. When it is delivered, you look at the success metric and you know whether it worked. You never see a surprise invoice. You never get a call asking for a variation fee. The price was agreed, the work was delivered, the outcome was measured.
A 12-month retainer with NXT Innings is not an open-ended commitment — it is a pipeline of Plays. Some are planned from the start. Others surface from what earlier work reveals. If a Play is not delivering, you know it. You pay for the Plays that were completed and you stop. There are no exit penalties because we do not need them. If we are delivering value, you will want to keep working with us.
If you want to understand what this looks like in practice, read about how we structure engagements without lock-in clauses.
The two questions that tell you everything
Before you commit to any consultant, ask these two questions: "Can you tell me exactly what I will pay, and what success will look like, before work starts?"
Most consultants struggle with both.
If they are billing by the hour, they genuinely cannot answer the first. They can tell you the rate. They cannot tell you the total. The honest ones will say so. The less honest ones will give you an estimate that grows.
If they are billing by the project, they can usually answer the first — the scope is fixed, so the price is fixed. But the second question is where it gets complicated. Success is rarely defined in a project brief. The brief defines deliverables, not outcomes. "We will build you a new CRM" is a deliverable. "Your sales team will be booking renewal conversations at least 30 days before contract end" is an outcome. Most project proposals contain the first kind of language, not the second.
With a Play, both questions have clear answers before work starts. The price is agreed. The success metric is named. If we cannot define what success looks like before we begin, we should not begin — and we will tell you that.
What to do now
If you are looking at hiring a consultant, do not rush. Take time to understand what you need. Can you articulate what success looks like? Do you have a sense of what the outcome should be? If you do, a good consultant can build from there.
And if you want to explore a different way of working — one without hourly rates, project scope creep, or lock-in clauses — we are here to have that conversation.
You can reach us through the chat on the website, by email, or by phone. There is no pressure. We will ask questions, listen to your situation, and be honest about whether we are the right fit.
If we are, we will move to a proposal with specific Plays and timelines. If we are not, we will tell you that too.
Heath McDonald is the founder of NXT Innings Consulting, a business operations and technology consultancy working with founders and business leaders across Australia.
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