What's a typical payback for a 'good' AI consulting engagement?

Solid SMB engagements pay back in 6-12 months at typical scope. If a vendor's pitch shows 18-month payback, the project may be too large for a fixed-fee engagement — consider phased delivery.

Why is the discount rate set to 10%?

Roughly the cost of capital for a profitable small-to-mid business in 2026 (SMB credit + opportunity cost). Adjust upward if you're VC-backed and your investors expect higher returns, or downward if you're cash-rich and conservative.

Should I include 'soft' benefits like better decisions?

Not in this calculator — they're real but hard to quantify, and double-counting risk is high if you also include hours saved. Use the calculator's output as the baseline, then add a separate bullet for soft benefits in your own decision write-up.

What if the project is multi-phase / multi-year?

Run the calculator separately per phase, then sum the NPVs. Don't try to model multi-phase in one input — the assumptions per phase usually differ enough that one combined run produces misleading numbers.

AI & Prompt Tools · Free tool

AI Consulting ROI Calculator

Estimate the ROI of an AI consulting engagement before signing. Inputs: project fee, hours saved per week, hourly rate, ongoing API cost. Outputs: payback period, year-1 net, 3-year NPV, verdict.

Updated May 2026

Consulting project fee ($)Hours saved / week (post-launch)Across all impacted team membersLoaded hourly rate ($)Salary + benefits + overheadImplementation duration (weeks)No savings during this rampOngoing software / API cost ($/mo)LLM API, vendor SaaS, observabilityDiscount rate %SMB hurdle ~10–15%

12-month projection

Annual labor savings (full-rate): $66,300
Annual ops / API cost: $4,800
Year-1 net (after project fee + ramp): $11,300
Payback period: 9 months

3-year outlook

3-year cumulative net cash flow: $134,300
3-year NPV @ 10% discount: $107,305

Verdict

Strong positive ROI

Projected NPV exceeds 50% of the project fee. Most consulting engagements at this profile pay back.

Export:

Heuristic projection. Doesn’t price implementation risk, quality uplift, or revenue acceleration. Validate with a smaller pilot before committing on the full project fee.

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What it does

Before signing an AI consulting engagement, run the math. This calculator gives you a transparent payback period, year-1 net, and 3-year NPV based on your own inputs — not the vendor’s pitch deck. Default discount rate is 10% (the common SMB hurdle); adjust if your cost of capital is different.

What it explicitly doesn’t price: implementation risk, quality uplift, and revenue acceleration. Those are real but project-specific. If you have a credible revenue uplift number, add it as a separate line item rather than baking it into hours-saved.

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How to use it

Enter the consulting project fee (one-time).
Estimate hours saved per week post-launch (across all impacted users).
Set the loaded hourly rate — salary + benefits + overhead.
Adjust implementation duration + ongoing ops cost.
Read the verdict: strong / marginal / negative ROI.

Frequently asked questions

What's a typical payback for a 'good' AI consulting engagement?: Solid SMB engagements pay back in 6-12 months at typical scope. If a vendor's pitch shows <3-month payback, ask hard questions about whether the hours-saved estimate is realistic. If their pitch shows >18-month payback, the project may be too large for a fixed-fee engagement — consider phased delivery.
Why is the discount rate set to 10%?: Roughly the cost of capital for a profitable small-to-mid business in 2026 (SMB credit + opportunity cost). Adjust upward if you're VC-backed and your investors expect higher returns, or downward if you're cash-rich and conservative.
Should I include 'soft' benefits like better decisions?: Not in this calculator — they're real but hard to quantify, and double-counting risk is high if you also include hours saved. Use the calculator's output as the baseline, then add a separate bullet for soft benefits in your own decision write-up.
What if the project is multi-phase / multi-year?: Run the calculator separately per phase, then sum the NPVs. Don't try to model multi-phase in one input — the assumptions per phase usually differ enough that one combined run produces misleading numbers.

Show the math + sources

Formula

Annual labor savings = hours_saved_per_week × 52 × loaded_hourly_rate. Year-1 net = ((52 − implementation_weeks) / 52) × annual_savings − annual_ops_cost − project_fee. Payback (months) = first month where cumulative net cash flow ≥ 0, given an implementation ramp during which inflows are zero. 3-year NPV = Σ CF_t / (1+d)^t for t=1..3, where CF_1 includes the project fee and CF_2..3 are net annual savings.

What this assumes

Linear ramp from project fee paid upfront. Hours saved are realized at the loaded hourly rate (salary + benefits + overhead). Ongoing ops cost (LLM API, vendor SaaS, observability) is a fixed monthly recurring. No quality uplift, revenue uplift, or implementation risk premium is priced — those are real but project-specific and easily double-counted with hours-saved. Discount rate defaults to 10% (typical SMB hurdle); override per your cost of capital.

Sources

Methodology last verified: 2026-05-03

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