This excerpt is part of Entrepreneur.com's Second-Quarter Startup Kit which explores the fundamentals of starting up in a wide range of industries.
In Start Your Own Consulting Business, the staff at Entrepreneur Press and writer Eileen Figure Sandlin explain how you can start a profitable consulting business, no matter whether your consulting business will focus on HR placement, computer troubleshooting, or anything else you can dream up. In this edited excerpt, the authors discuss just what skills companies are looking for when hiring a consultant and which consulting gigs are hot in today's market.
It wasn't until the 1950s that consultants began to emerge in the business world. Until then, consultants could be found mainly in the legal, finance and employment fields. Then in the early 1960s, the U.S. economy changed from production- to service-oriented, which proved to be the perfect incubator for a new comprehensive consulting industry. Happily, by positioning themselves as experts in their particular fields, consultants found themselves in great demand by companies that needed help but couldn't justify increasing their payroll to get it.
According to industry experts, here are the top 10 reasons organizations hire consultants today:
1. To obtain specific expertise. Clients typically hire people who have the skills and expertise their own staff lacks, so it really pays to have a track record that speaks for itself.
2. To identify problems. Sometimes employees are too close to a problem inside an organization to recognize it. That's when a consultant rides in on his or her white horse to save the day.
3. To supplement a company's internal staff. Sometimes business executives discover they can save thousands of dollars a week by hiring consultants when needed rather than hiring full-time employees. They also can save additional money because consultants don't need benefits. So even though a consultant's fees are generally higher than an employee's salary, over the long haul, a consultant tends to be a less expensive option.
4. To act as a catalyst for change. No one likes change, especially corporate America. But when change is needed, a consultant generally can do things without worrying about the corporate culture, employee morale, or other issues that tend to elicit high emotions and dissention in the ranks.
5. To be an objective onlooker. Besides seeing problems from a different perspective than internal staff does, a good consultant provides a fresh, objective viewpoint, then delivers results without being concerned about what workers in the organization might think about the results and how they were achieved.
6. To teach. If you have special skills and knowledge, someone will pay you to pass on that knowledge. As a result, it's very important for you to stay abreast of advances and developments in your chosen field so information can be passed on to clients knowledgeably and authoritatively.
7. To do a company's "dirty work." Let's face it: No one wants to be the person who has to make staff or program cuts. An impartial outside consultant is the perfect person to handle such unpleasant tasks.
8. To bring new life to an organization. Many consultants are retained as idea starters and innovative thinkers. If you're a subject matter expert who can think on your feet, you can help a company retool or reinvent itself.
9. To assist with a business launch. Business development consultants are in high demand by entrepreneurs and visionaries who wish to leave the groundwork--and grunt work--to someone else. In this role, a consultant may also assist with the day-to-day operations of the new venture.
10. To share contacts. If you know the movers and shakers in business, or have big business or manufacturing contacts abroad, someone will probably want to tap into that knowledge.
Although you can consult in just about any field these days, business consulting firm Attard Communications says that the types of consulting businesses that are thriving today include:
- Accounting. Businesses of all sizes--and especially small businesses--need everything from bookkeeping to tax preparation, making this a solid career choice for a new consultant.
- Advertising. An advertising consultant may be needed to develop strategic ad campaigns, write copy and make ad buys.
- Career. Widespread corporate downsizing has created a need for consultants who can help job seekers reinvent themselves, polish their resumes, and otherwise make themselves irresistible to employers.
- Computer consulting. Consultants who are well versed in web page and blog development, software and hardware installation and troubleshooting, internet marketing, and other things cyber-based can build a viable business.
- Education. From finding scholarship money and advising kids who are writing their college applications to assisting school districts with budgetary issues and other matters, an education consultant may find themselves in great demand these days.
- Executive search. No matter whether the economy is in recession or booming, headhunters (aka executive search consultants) are always in demand.
- Human resources. Corporations often need help with personnel issues like conflict resolution, violence in the workplace, sexual harassment awareness and other people matters--not to mention those downsizing issues mentioned earlier.
- Insurance. Advising people about their insurance needs and finding the best policies at the best price remains a field with strong opportunities for new consultants.
- Management. Fresh ideas on how to manage a business better are always in demand, especially when a company is facing challenging economic times.
- Public relations. Companies thrive on press coverage that puts them in the best possible light, and the consultant who has the tools and contacts to get such coverage can be invaluable.
Other fields with strong possibilities for fledgling consultants include corporate communications, graphic design, editorial writing, marketing, motivational speaking, payroll management, strategic planning and tax advising.