Management consulting is a business that survives economic downturns and earns high income with low expenses. During an economic downturn, companies are looking to consultants to help them increase revenues and decrease costs – during periods of economic growth, companies look to consultants to help them pinpoint the right investments and expand the business to increase revenues. A management consultant also earns a high income – the average for a new consultant is $65,000 a year, while experienced consultants easily earn six figure incomes. Starting your own management consulting business will likely bring in $100-$300 an hour, depending on your specialty and experience.
Management consultants also experience freedom of setting their own schedule and working with clients they enjoy. You can work with your desired industry and functional area – finance, sales, technology – to achieve a satisfying consulting career. There are other perks to becoming a management consultant:
- Intellectual challenge. Management consultants often deal with difficult and high profile projects. This can be very intellectually stimulating.
- Opportunity to learn. Management consultants also work on a variety of issues which typically cross multiple business units or funtional areas. You are frequently called upon to learn something unique to a company and produce a solution or results in that area.
- Help others to learn. As a consultant, one of your main goals is to produce something that a company can use with its own employees. You will have ample opportunities to teach others in this role and help staff learn a new process, program, or technology.
- Self satisfaction. One of the best parts of becoming a management consultant is that the job is often very satisfying. You can use your management skills to create a very self satisfying career.
If you’re thinking about launching a low investment, high return business, management consulting might be for you!
What do I need to know to get started?
Management consultants are hired for what they have experienced, for what they know, and for what they are able to produce. First, you need to be a hybrid of a business owner – someone who has sales skills, leadership, intellectual capacity, a good attitude, the ability to brush off problems. Some of the things you should do to start a management consulting business include:
- Do research on your target industry or niche. It is very difficult to find business as a general business consultant. Instead, if you focus on a particular niche within an industry, you will likely be more successful and make a name for yourself. You should target companies within the industry or niche you will be consulting for and do research on what they need, who they are looking for, and what contacts you have at the company or organization.
- Work with industry or trade organizations. One of the quickest ways to find clients is to work with an industry association in your niche area. For example, if you are an expert in product pricing, you can join the Professional Pricing Society and work through them to find clients.
- Become known as an expert. Working with the trade organizations might also provide opportunities to get published in their newsletter, magazine, or website. If you are known as an expert in a particular area, you will find it easier to find work for your business consulting firm.
- Certification and education. Contrary to popular opinion, you don’t necessarily need an MBA to become a business consultant, but it can help sell your services. You may need industry specific certifications to become known as an expert, though. For example, it would be hard to be a Six Sigma consultant without holding a degree belt in SIx Sigma. Likewise, you wouldn’t be able to become an actuarial consultant without first being an actuary. Find out what certifications or degrees are required and focus on those first.
- Revenues will be a roller coaster. One of the things you should understand before undertaking starting a management consulting business is that revenues may be a roller coaster – one month you might bill $30,000 in consulting fees, but not receive it for 90 days. I know once consultant who had $58,000 tied up in invoices with a single company and it took them 6 months to pay. He had to take out a loan to steady his finances until the money arrived. As a consultant, you cannot write off lost revenue with the IRS for hours billed, so be prepared that if you do not collect the fees, it will be revenue lost.
Management consulting is both lucrative and less likely to be hit during a recession. You can use your talents to increase your income and have a successful business!
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