What people think a $1M/year consulting business looks like
Updated on
Namya @ Supafast
@namyakhann·Jul 22
What people think a $1M revenue business looks like:
200 clients × $5K = $1,000,000
What it actually looks like:
• 1 client paying $200K
• 1 client paying $150K
• 2 clients paying $100K each
• 3 clients paying $50K each
• Plus a bunch of smaller $5K-$10K clients
The math
Everyone thinks a $1M business means 200 clients paying $5K each. Easy math, right? Wrong.
In reality, most agencies or studios get the bulk of their cash from just a few big clients. The rest are smaller deals that keep the lights on, not the profits rolling.
Why it works
- Reflects the Pareto Principle: 80% of revenue often comes from 20% (or fewer) clients
- Highlights risk concentration—lose one big client, feel the pain
- Encourages tiered strategy: large anchor clients plus many smaller ones for stability
- Forces smarter pipeline planning and pricing models
Examples
- A design studio making $1.2M: one $300K tech client, two $150K retainers, and 10 small gigs under $10K
- McKinsey’s top 50 clients drive ~45% of its revenue
- A SaaS with one enterprise account worth more than 100 small users combined
Analyzed by Swipebot
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