A consulting firm at 25% EBITDA is solid. A consulting firm at 35% EBITDA is exceptional. The interesting question is not which is better. It is where, exactly, the ten points come from.
In our work across the mid-market consulting and tech-services sector, the same five levers turn up again and again. Not all of them apply to every firm. Most firms can find six to eight points by working two or three of them deliberately.
Lever 1: Utilisation, but the right way
Most firms try to push utilisation by squeezing fee-earner time. They get to 75% billable, then 80%, then morale breaks and senior people leave. The firms that actually move utilisation do something different: they unbundle the work.
The classic mistake is to assume the senior consultant has to do all of their own analysis, slide-building, and admin. They don't. A senior consultant doing 60% of their time on senior work, supported by an analyst doing the production-line work, generates more billable revenue than the same consultant doing 80% of mixed work.
Typical impact: 1.5 to 2.5 EBITDA points.
Lever 2: Service mix shift
Every consulting firm has a service mix that ranges from gross-margin-eating delivery work to high-margin advisory. Most firms drift toward the lower-margin end because that is where the easiest revenue lives.
The discipline is to do two things deliberately. First, raise the price of the low-margin work or stop selling it. Second, invest in the muscle to sell the higher-margin work, which usually means giving up some short-term revenue while the new motion gets going.
The firms that hold their service mix at 60% advisory / 40% delivery typically run 5-7 EBITDA points ahead of the firms that drift to 30/70. The mix shift takes 12-18 months. The margin shift follows about six months later.
Typical impact: 2 to 4 EBITDA points.
Lever 3: Pricing
Most consulting firms underprice by 10-20% because they confuse cost-plus thinking with value-based thinking. The proof: when did you last walk away from a deal because the client wouldn't accept a 10% rate increase?
Two specific moves. First, separate price from rate cards in client conversations. Talk about outcomes and ranges, not day rates. Second, package the work so the client is buying a thing rather than buying time. A "positioning sprint" for £45k feels different from "15 days at £3k" even when the maths is identical.
Typical impact: 1.5 to 3 EBITDA points.
Lever 4: Overhead ratio
This is the lever most founders are afraid of, because it implies someone needs to leave. It usually doesn't. Most mid-market firms carry overhead because they grew it in the previous cycle and never pruned.
The honest audit: how much of your finance, ops, and admin function existed five years ago when you were half the size? In a firm growing 20% a year, overhead should grow at half that rate or less. If it's growing 1:1 with revenue, you have a structural drift.
Specific places to look: redundant SaaS subscriptions, layered management roles created during a hiring sprint, marketing spend that nobody can attribute to revenue. These together typically add up to 1-2% of revenue, which converts directly to EBITDA points.
Typical impact: 1 to 2 EBITDA points.
Lever 5: IP leverage
The highest-margin firms have a body of intellectual capital that gets sold many times. Frameworks, tools, accelerators, training material, decision aids. The work to build them is upfront and often eats into one quarter's margin. The work to sell them is ongoing and pure margin from then on.
Two warnings. First, do not confuse a slide deck with IP. IP is a thing the client gets value from, not a thing you wave at them. Second, IP is most valuable when it is taught to the team, not when it lives only with the founder. (See: founder dependency.)
Typical impact: 1.5 to 3 EBITDA points, but back-loaded over 18-24 months.
The maths of compounding
Add up the ranges and the upper bound is 7 to 14.5 points. The lower bound is 7.5. So a firm at 25% EBITDA can credibly target 32-35% over an 18-24 month programme. We see it happen often enough to know it is not theoretical.
What stops most firms is not the absence of opportunity. It is the temptation to do all five at once and finish none of them. The firms that move the margin pick two levers, finish them, then start the next pair. Slower in calendar months, faster in actual progress.
Margin is the lagging indicator of decisions made eighteen months ago. The firms at 35% are not working harder. They are running a tighter operating model that compounded.
Where this shows up in equity value
Each EBITDA point in the mid-market consulting sector is worth, very roughly, 1x your multiple in equity value. So a firm at £10m revenue, 25% EBITDA, on a 6x multiple is worth £15m. The same firm at 35% EBITDA on a 7x multiple (because the operating model is now investor-grade) is worth £24.5m. Same revenue. Same client base. Different machine.
The Operating Model Foundation half of our Equity Blueprint is built around exactly these levers. Or to talk through which two you should run first, come and have a conversation.