Feasibility Study for a Consulting and Project Management Firm in Egypt

How a consulting firm makes money, and where it loses it

A small consulting firm, in management, finance, marketing or another field, sells the working days of its partners and consultants in the form of reports, plans and implementation support. Its operating costs are modest next to businesses that need stock or machines, but its biggest item, consultants' salaries and what the partners draw to live on, is paid every month whether or not a contract is signed.

So a consulting firm feasibility study does not start with the day rate alone. It starts with the sales pipeline: how many proposals the partners send each month, how many turn into contracts, how many months pass between the first meeting and the signature, and when fees are paid after it. The real risk is not a lack of demand for expertise. It is the gap in the first months before the first contract, and dependence on one or two large clients whose late payment controls the firm's whole cash position.

Fee models and the cash timing of each

• Fixed-fee project: such as an organisational restructuring, a pay structure or a marketing plan. The value is usually split into an advance, a payment on an interim report and a payment on the final report, so cash comes in lumps and depends on the client accepting the reports.
• Monthly retainer: a set number of days a month for a fixed amount paid in advance at the start of the month. Smaller than a project, but it covers part of the fixed cost every month.
• Day or hourly rate: invoiced after the work, usually at month end, so you fund a month of work and then wait to be paid.
• Success fee: a percentage paid only if the goal is reached, such as securing finance. Its timing is outside your control, so keep it out of the base scenario.
• Project management for a percentage, and corporate workshops: the percentage is collected as the project progresses; workshops bring quick, non-recurring income. If training is your main activity, see a training center feasibility study.

The sales pipeline: from proposal sent to contract signed

The basic equation: contracts signed per month = proposals sent × win rate, and signed value = contracts × average contract value. A good proposal needs a meeting and a diagnosis, then writing and pricing, out of partner time that could have been billed, so count the cost of selling in partner days.

In the example below each proposal takes two days of a partner's time, and the average project is 45 working days worth EGP 225,000. The table shows the monthly proposals needed to break even and to fill the sellable capacity (65 days a month) at different win rates:

In the example the two partners set aside 20 days a month for selling and management. At a 10% or 12.5% win rate, filling capacity needs more partner days than that, so the extra time comes out of delivery or out of running the firm; at 25% proposals take 57.8% of those days. So the win rate decides whether the partners have enough time for both selling and delivery.

Illustrative example: two partners and three consultants

This is an illustrative example; its figures are assumptions to explain the method, not market prices. A management consulting firm has two partners, each splitting their time equally between selling and management on one side and delivery on the other, and three consultants:

• Wages and social insurance: the private-sector minimum wage is EGP 7,000 a month from 1 March 2025¹; the employer pays 18.75% of the insurable wage and the employee 11%²; and the insurable wage ceiling is EGP 16,700 from 1 January 2026³. In the example: a senior consultant on EGP 30,000 and two consultants on EGP 18,000 each, EGP 66,000 in total. Every one of these salaries is above the ceiling, so the employer's share is EGP 3,131.25 per person (based on EGP 16,700), or EGP 9,393.75.
• Partner drawings: EGP 20,000 a month for each partner, EGP 40,000 in total. The example includes no social-insurance contributions for the partners themselves.
• Other expenses: EGP 38,000 a month (small office 15,000, accountant 4,000, software and subscriptions 3,000, marketing and business development 8,000, travel to client sites 5,000, miscellaneous 3,000).
• Total monthly cost: EGP 153,393.75. Start-up costs EGP 160,000: devices 100,000, office fit-out and deposit 30,000, incorporation 20,000, website and company profile 10,000.
• Sellable capacity: 10 delivery days per partner and 15 days per consultant (75% of 20 working days), or 65 days a month.
• Price: EGP 5,000 a day before VAT. A project is 45 days over 3 months (15 days a month), or EGP 225,000.
• Sales: 4 proposals a month from month one, a 25% win rate and a 3-month sales cycle from proposal to signature, so one project starts every month from month four.
• Payments: 30% advance on signing, 40% on the interim report at the end of month two and 30% on the final report; the last two are collected 30 days after they fall due.

Break-even = 153,393.75 ÷ 5,000 = about 30.7 billed days a month, or about 47.2% of sellable capacity. That means signing about 0.68 projects a month, or about 2.73 proposals a month at a 25% win rate. Here is the cash month by month:

(Selected months; cash out is the same every month; the balance starts at minus the start-up costs; amounts are rounded to the nearest pound.)

From month six, with three projects running, the firm makes a profit of EGP 71,606 a month, about 31.8% of revenue, after the partners' drawings, and the monthly net cash reaches the same figure from month seven. Even so, the first year ends with a loss of EGP 40,725 before tax and start-up costs, because the first three months brought no revenue. Note two points:

• The deepest cash need is EGP 791,969 in month five, about 5.2 times the whole monthly cost and EGP 631,969 more than the start-up costs.
• The cumulative balance is still EGP 358,225 negative in month 12 and does not turn positive before month 18 if the firm keeps signing one project a month.

On the gap between profit and cash, see our articles on cash flow for small businesses and break-even and working capital.

What if the win rate drops or a large client pays late?

The same example, changing one assumption in each row:

• Win rate halves: a project starts every two months, so monthly revenue never exceeds EGP 150,000, below the cost, the firm never reaches break-even and the balance keeps falling after month 12. The answer is more focused proposals to clients closer to buying or a lower fixed cost, not a lower price.
• One client 60 days late: the profit does not change, but the deepest cash need rises by EGP 171,788, because this client is the firm's first source of income.
• Mixing retainers and projects: with the same sales effort, one contract a month alternating between a project and a retainer (8 days a month for EGP 36,000, or EGP 4,500 a day, over 12 months), first-year profit is lower, but the firm enters year two with four retainers paying EGP 144,000, about 93.9% of the monthly cost.

The levers specific to a consulting firm

• The value of one proposal: at a 25% win rate each proposal is worth on average 25% × 225,000 = EGP 56,250 of signed value, against two partner days worth EGP 10,000 at the day rate. So do not cut selling time in the early months, and measure the win rate every quarter: at 12.5% the expected return per proposal falls to EGP 28,125.
• Payment terms: a larger advance directly cuts the deepest cash need. Tie every payment to a defined report, and put a period in the contract after which a report counts as accepted if the client has sent no written comments. Cost-based and value-based ways to price a service are explained in our article on how to price your product.
• Concentration on one client: in the late-payment scenario, the client of projects one and two is 100% of revenue in months four and five and 25% of the year's revenue. Set a cap on any client's share of annual revenue and track it monthly.
• Dependence on one person: if one of the partners stops selling for a few months, proposals fall from 4 to 2 a month, which has the same effect as the 12.5% win-rate row in the scenario table. So have the senior consultant take part in proposals from the first year.
• When to add another consultant: a consultant on EGP 18,000 costs EGP 21,131.25 a month with the social-insurance share, or about 4.2 billed days. Add one when signed contracts fill current capacity for the coming months, as in the retainer scenario (95.4% in month 12), not after the first promising proposal.

VAT, withholding and exported services

The general rate of tax on goods and services is 14% from fiscal year 2017/2018, and the same article provides that "the tax rate shall be (zero) on goods and services that are exported, in accordance with the conditions and situations set by the executive regulations"⁴. The mandatory registration threshold is EGP 500,000⁵; anyone whose sales reach it must register within 30 days of reaching it, and every exporter must register "regardless of the size of its transactions"⁴. In the example, the value of work delivered passes EGP 500,000 in month seven, and the total invoice for a local project reaches EGP 256,500, of which EGP 31,500 is tax and not your income. On local transactions, PwC's Egypt tax summary (reviewed August 2026) gives a withholding rate of 3% on all types of services for payments above EGP 300, as an advance payment of corporate income tax⁶. If the client withholds it, you receive less than the invoice, so check the current rate with your accountant.

For exported services, the Egyptian Tax Authority issued Executive Instructions No. 45 of 2025 and a guide⁷. According to the guide, remote services rendered by a company in Egypt to a business customer not located in Egypt are zero-rated, except services related to real estate in Egypt and services that require the physical presence of both the provider and the recipient in Egypt⁷. The service is treated as local and taxed at the standard rate if the contract names the foreign client's branch in Egypt as the recipient and user of the service, even when the client pays from abroad⁷. To classify a service as exported, the guide asks for a written contract setting out the service, the parties, the payment terms and the duration; a detailed electronic invoice; and proof of payment such as a bank transfer or bank statement⁷. So if your advice concerns real estate in Egypt or needs both of you to be present there, check your case with an accountant or with Maher Consulting Firm before assuming a zero rate.

If your service is engineering, accounting or legal, check the registration or licensing requirements of the syndicate or competent authority before incorporating.

Common mistakes in a consulting firm feasibility study

1. Starting revenue in month one, when the sales cycle in the example is 3 months and the first interim payment arrives in month six.
2. Counting capacity on all of the partners' days, without deducting the days spent on proposals and meetings.
3. Assuming an optimistic win rate without measuring it, when a fall from 25% to 12.5% turns the example firm from a monthly profit into a permanent loss.
4. Leaving out the partners' drawings, 26.1% of the monthly cost in the example, so the study looks profitable while the partners have no income.
5. Treating every foreign client as a zero-rated export without the required documents, or even when the user of the service is its branch in Egypt.

Frequently asked questions about a consulting firm feasibility study

Sources

1. Ministry of Planning and Economic Development. الاجتماع الأول للمجلس القومي للأجور: رفع الحد الأدنى لأجور القطاع الخاص إلى 7000 جنيه (in Arabic) (2025-02-09). Checked 22 October 2026.
2. Andersen Egypt. Social insurance in Egypt (contribution rates under Law 148/2019) (2026-06-30) — secondary source. Checked 22 October 2026.
3. National Organization for Social Insurance (NOSI). التأمينات: رفع الحدين الأدنى والأقصى لأجر الاشتراك التأميني بدءًا من أول يناير 2026 (in Arabic) (2025-11-30). Checked 22 October 2026.
4. Financial Regulatory Authority. قانون الضريبة على القيمة المضافة رقم 67 لسنة 2016 وفقًا لآخر تعديل (in Arabic). Checked 22 October 2026.
5. Egyptian Tax Authority. ما هو حد التسجيل الإلزامي لضريبة القيمة المضافة، وما هي الأنشطة المعفاة منها؟ (in Arabic). Checked 22 October 2026.
6. PwC Worldwide Tax Summaries. Egypt: Corporate - Withholding taxes (local payments) (2026-08-17) — secondary source. Checked 22 October 2026.
7. Egyptian Tax Authority. آلية تعامل المكلفين مع الخدمات المصدرة (التعليمات التنفيذية 45 لسنة 2025 والدليل الإرشادي) (in Arabic); Egyptian Tax Authority. Guidelines for Exported Services in Egypt (First Edition). Checked 22 October 2026.