If you’re an entrepreneur, you likely have a great idea, product, or talent, and a plan to make your business a reality. Running a business, however, involves a wide variety of tasks, a range of expertise, and multiple skill sets. That’s why even the savviest entrepreneur can use some help—this is where consultants may be of value. But what exactly is a business consultant, and what does a business consultant do? Read this guide to learn everything you need to know.
What is a business consultant?
A business consultant is essentially a professional expert. In any given field, these outside individuals (or firms) provide businesses industry-specific advice or strategies on how to improve, grow, or maintain their operations. Typically they’re hired by a company when a specific issue cannot be resolved in-house, but they can be hired at any stage of a business’s lifetime. Think of consultants as problem solvers you can call on when you need them.
What does a business consultant do?
Business consultants can be hired for a wide range of services based on their industry-specific expertise. While some offer specialized solutions, others offer more general business expertise. Because they’re usually hired to help solve a problem, consultants tend to take a solutions-focused approach. They identify and address obstacles to a company’s goals or growth.
A business consultant can be hired for a variety of purposes. They can provide training and resources to help staff meet their financial targets. They can help devise a budget and identify efficiencies. They can even be hired to brainstorm ideas. In fact, anywhere your business experiences a gap in expertise is a potential opportunity to hire a business consultant.
Although you may prefer to handle your business’s issues internally, consultants bring valuable outside perspectives and experience that you may be missing. When you’re so focused on your specific business operations, it’s easy to get tunnel vision. Consultants can help you see the bigger picture.
How do consultants get paid?
When hiring a consultant, negotiation on deliverables and fees is a key part of the process. What are your needs? Will you be hiring them on a per-hour basis or on a per-project basis? Will you pay a lump sum? What are your targets and how much are you willing to spend to reach them? All of these factors will go into those negotiations. It’s also important to factor in who you’re hiring. Consultants can be anything from freelance contractors all the way to large consulting firms, and the number of people, scale of the task, and the experience of the person or persons will impact the cost of hiring.
Interested in becoming a business consultant yourself? You might have the necessary skills—you may have business knowledge and expertise in a particular sector, or perhaps you’re good at identifying problems and solutions. There’s a chance that the skillset that led you to entrepreneurship could be valuable to others, and, if you’re ready to sell your services as a consultant, you can register as a sole proprietor or incorporate with Ownr and start your own consulting firm.
Types of business consultants
There are many different kinds of consultant, and the ways in which they operate will depend on their industry. Business consultants offer services ranging from general advice to highly specialized services. Here are some of the most common types of consultants hired by businesses:
Strategic consultants help businesses develop and implement long-term plans. They’re the most high-level consultants, offering expert advice on crucial, sometimes risky, business decisions.
Operations consultants focus on how a company functions. They analyze the operations of a company and make recommendations on how to improve its efficiency and effectiveness.
A marketing consultant assists with marketing strategies, either from a high-level perspective or on specific campaigns. They’re experts in market research, marketing platforms, and branding, and can help identify target audiences and new markets.
Human resources consultants provide support on issues relating to a company’s employees. This may include recruitment, management, and developing employee programs.
Technology consultants can help with developing, recommending, and utilizing your company’s hardware and software to better meet business goals. They can also provide ongoing technical or IT support.
Other types of business consultants include financial consultants, branding consultants as well as consultants specific to particular or niche industries. Let’s say, for instance, you have a landscaping company and you want to hire a consultant who is familiar with the specific economic circumstances of that industry. You probably can. But when specialized services are not required, generalist consultants can offer broad expertise across all subject areas.
Advantages of business consultants
One of the greatest advantages of hiring business consultants is the fresh outside perspective they bring. Since they are not involved in the day-to-day operations, consultants can offer an objective view of your company that’s free from the emotional factors that may impact your vision.
Business consultants also bring tremendous experience accumulated from working with a variety of companies and addressing many business scenarios. They also bring to the table additional resources and connections that you may not have.
Like many businesses, yours may be operating with inefficiencies you’re not aware of. A business consultant may uncover big savings which may even offset the cost of hiring them in the first place.
Why businesses should consider hiring a consultant
Most businesses can benefit from hiring a consultant. Startups may need help launching and getting off to a strong start. More mature businesses may use consultants for new perspectives and ideas on how to refresh and improve old ways of thinking and operating. Struggling businesses can use their expertise to help turn them around, while successful ones can use their help to level up.
What tools do business consultants use?
CRM (Customer Relationship Management) software is a crucial tool for business consultants. Consulting is a relationship business, and this software helps manage and track all client interactions, communications, and leads. The suite of tools offered by each platform varies, but commonly you’ll be able to build out customer profiles, schedule meetings, build email templates, and much more. Here are a few of the more popular CRM tools available to consultants:
Project management tools
Consultants are often juggling a number of different elements of a business they’re supporting, as well as their own processes and range of clients. Project Management Tools help keep track of every project, including deadlines, workflow, progress reports, and more. This can help consultants to maintain accountability, deliver on time, and spot any pending issues or risks before they become full-blown crises, costing everyone time and money. Some of the more popular Project Management Tools include:
Time tracking software
You’ve probably heard the phrase “time is money”. This is particularly true when you hire a business consultant since you’re essentially paying for the time they spend on your business. Time tracking software describes and tracks each hour billed by the consultant so you know how your money is being spent.
Data visualization software
As businesses are able to gather more and more data in the digital age, finding ways to analyze and model this information has grown increasingly important. Consultants may use some of these tools to help you make better use of your data collection, as well as find new areas to improve your business. They may even help your business implement these tools.
Cloud accounting software
Cloud accounting software manages your business’s finances in the cloud. It helps simplify menial accounting and bookkeeping tasks with real-time financial reporting, and it is available securely to anyone with remote access because it’s paperless and collaborative. Finding the right accounting software can be a drag, but Ownr is partnered with the industry-leading cloud accounting software, Xero, so you have access to the best at the best price.
What is a consultant in business FAQ’s
What is the role of a consultant?
As you’ve seen throughout this primer, it’s hard to define the job of a consultant. At a high-level, a business consultant is there to offer unbiased, third-party expert advice to businesses. That can mean many things, from efficiency to accounting, marketing to software. If you have a problem, you can hire them to fix it—or to help you figure out how.
Do consultants make a lot of money?
According to Glassdoor, the average base salary for a consultant in Canada is about $78,000 per year, but that can fluctuate with some earning up to six figures. If you’re looking to start a consulting business or offer consulting services, it can be very lucrative.
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.