Being a Certified Online Business Manager I often get asked about providing business consulting services so today I am going to share all about what a business consultant does and how business consultants can help your business.
What is a Business Consultant?
Business consultants provide management consulting to help organizations improve their performance and efficiency. These professionals analyze businesses and create solutions while also helping companies meet their goals. Business owners should consider hiring business consultants when they need help or perspective on their chosen path or a catalyst for change in their companies.
- Business consultants help companies overcome challenges, increase revenue or grow.
- Hiring a consultant can help businesses improve performance and make necessary changes to achieve success.
- Business consultants may charge by the project or the hour, or require daily or monthly retainers.
What does a Business Consultant do?
There are several reasons business owners should consider hiring consultants. Consultants offer a wide range of services, including the following:
- Providing expertise in a specific market
- Identifying problems
- Supplementing existing staff
- Initiating change
- Providing objectivity
- Teaching and training employees
- Doing the “dirty work,” like eliminating staff
- Reviving an organization
- Creating a new business
- Influencing other people, such as lobbyists
The first step for any business consultant is the discovery phase, where the goal is to learn the client’s business. A good business consultant takes the time to learn as much as possible about the business from the owner and employees. This can include touring the facility, meeting with the board of directors and employees, analyzing the finances and reading all company materials. During this process, the business consultant will uncover the details of a company’s mission and what operations are in place.
Once the business consultant has developed an in-depth understanding of the company, they enter the evaluation phase, where the goal is to identify where change is needed. This phase includes identifying the company’s strengths and weaknesses, as well as current and foreseeable problems. These issues can include problems that ownership and management have already identified, as well as new problems the business consultant discovers as a result of their objectivity. A business consultant should also identify opportunities to grow the business, increase profits and boost efficiency.
In addition to identifying these problems and opportunities, a business consultant should develop solutions to problems and plans for capitalizing on opportunities. Perhaps a company has a particularly strong sales department but a weak marketing department. This is an opportunity for the company to increase marketing resources and capitalize on the sales staff. During this phase, it’s important for the consultant and the company’s employees to maintain open, clear communications.
How much do business consultants charge?
According to the Bureau of Labor Statistics, management consultants make an average of $150,000 per year (or $62.93 per hour). But that’s what the person “takes home” as income, and consulting charges are typically higher to cover business expenses. Consultants don’t always charge by the hour. According to a consultant fee study from Consulting Success, here are some popular fee methods and the percentages of consultants who favor them:
- Per project – 34.2%
- Hourly – 27.3%
- Monthly retainer – 15.1%
- Daily rate – 14.1%
- Other – 9.3%
According to the study, 43% of consultants earn up to $5,000 per project, though some make more than $80,000 per project. Obviously, the size, scope, and length of the project determine the cost.
Advantages of Business Consulting Services
It can be difficult to make the choice to hire a business consultant. However, the rewards are often worth the investment. Some of the most common reasons why businesses work with business consultants include:
1. Gain an Outside Perspective
2. Take Advantage of Valuable Resources
3. Bring in New Business Skills
4. Save Time, Money and Stress
5. Prompt Employees to Reach Goals
Business consultants are an expense, but their feedback and planning can help increase business and boost profits while eliminating problems and identifying opportunities to ensure future success.