The Instant Profit Assessment for consulting firms.
Five numbers from your last 12 months. In under a minute you will see how your firm currently splits its real revenue across profit, owner pay, tax and operating expenses, how that compares with the Profit First targets for your size, and the dollar gap in each bucket.
Real revenue, four buckets, one target.
Real revenue is total revenue minus subcontractors and anything you pass straight through to clients. It is the money your firm actually earned, and every percentage is calculated on it.
That real revenue gets split four ways: profit, owner pay, tax and operating expenses. Your current split is your current allocation percentages. The Profit First method publishes target allocation percentages for each revenue band. The assessment shows the gap between the two.
Most consulting firms find the same pattern: profit close to zero, operating expenses well above target, and owner pay quietly squeezed to make up the difference. The bench, unbilled senior time and under-priced fixed-fee work all land in operating expenses.
Target allocation percentages by real revenue
| Real revenue | Profit | Owner pay | Tax | Operating expenses |
|---|---|---|---|---|
| Under $250K | 5% | 50% | 15% | 30% |
| $250K to $500K | 10% | 35% | 15% | 40% |
| $500K to $1M | 15% | 20% | 15% | 50% |
| $1M to $5M | 10% | 10% | 15% | 65% |
| $5M to $10M | 15% | 5% | 15% | 65% |
| $10M to $50M | 20% | 0% | 15% | 65% |
Starting targets as published in the Profit First method. Treat them as a direction to move in, not a rule to hit overnight.
The assessment, answered.
What is a Profit First instant assessment?
It compares how a business currently splits its real revenue across four buckets (profit, owner pay, tax and operating expenses) with the target allocation percentages the Profit First method recommends for a business of that size. The difference in each bucket shows where cash is leaking and how far you are from a healthy split.
Why do subcontractors come out before the percentages?
Revenue you pass straight through to subcontractors or resell at cost is not really yours to allocate. Profit First calls what is left real revenue, and every percentage is calculated on that number. For consultancies that use a lot of contractors, this one adjustment changes the picture more than anything else.
Are staff salaries owner pay or operating expenses?
Operating expenses. Owner pay is only what the working owners take as salary and drawings. Everyone else on the payroll, including senior consultants and partners who are not owners, belongs in operating expenses.
My profit is well below target. Should I change everything at once?
No. The method recommends moving your current percentages toward the targets a few points each quarter. A sudden cut usually breaks delivery. A steady shift builds the habit and gives the firm time to find the operating savings.
Is this tool affiliated with Profit First?
No. Profit First is a method created by Mike Michalowicz. This is an independent calculator from ConsultancyOS, built for consulting and IT services firms, using the target percentages published in the method.
Want the bigger picture? The Consulting Firm Readiness Score grades your firm across delivery, operations, people and growth, and the field note on running this assessment walks through what consultancies usually find.