Business Consulting 101: The Ultimate Guide

Are you considering taking on consulting work? Every industry needs business consultants to help individuals achieve their goals. Your knowledge and experiences can make you the next rockstar business consultant, but first, we’ll help you learn how to help clients.

From OnStrategy to Restaurant Boss, marketing to sales, human resources, and more! Business consultants in all fields have found ways to make millions of dollars per year in the consulting field. We’ve interviewed business consultants in most fields to learn the secrets to their success. 

We’ve gathered information from those interviews to help you understand what a business consultant does. We’ll share information from companies making millions per year to help you decide if business consulting is right for you, and give you a guide on how to pursue your goals.

What Is a Business Consultant?

A business consultant provides advice or services to help organizations achieve their goals within a division of business such as:

• Management
• Finance
• Marketing
• Strategy
• IT
• Human Resources 
• Pricing
• Operations
• Sales
• Security
• Law
• Accounting
• Data Analytics
• Sustainability
• Engineering
• Science
• Digital Transformation
• Exit Planning

Many consulting services provide more than advice. A good business consultant goes beyond just offering advice to help their clients gain the most by helping implement the advice and train the company on how to make the most of the solutions. We’ll go into each of the types of business consultants next to help you understand what each does.

Types of Business Consultants 

Each field of business consulting has different aspects of business that are the primary focus of the business consultant. We’ll cover some of the common types of consulting options you will come across and what they do.

Type #1. Business Consultant

“Business consultant” is the most generic of the consulting terms. People describe themselves this way primarily when they are giving a quick answer of what they do. A business consultant is focused on helping companies solve problems that the owner or team doesn’t have the knowledge, time, or experience to solve. They will normally fall into one of the other categories that we discuss below because one person can’t successfully solve all problems.

Type #2. Business Management Consultant

A management consultant focuses on solving a specific business problem that a company faces day to day. The consultant will perform tasks including:

• Analyzing business data
• Interviewing employees
• Documenting recommendations
• Helping an organization understand why the changes are important

Implementing a consultant’s recommendations may be part of the consultant’s job or may be handled by the client. The end goal is to help other businesses streamline operations.

Type #3. Industry Business Consultant

Some business consultants choose to focus on a particular industry. For instance, Ryan Gromfin started Restaurant Boss after he had a heart attack and a partnership ended. Now he is a business consultant focused solely on the restaurant industry. Ryan told us about the start of his journey:

Today, he’s making $420K per year as a business consultant. Find out how in our podcast below:

Type #3. Financial Consultant

A financial consultant advises businesses and people on financial matters to help them better achieve their goals. They might provide services like:

• Analyzing the financial performance compared to competitors
• Suggesting ways to save money
• Reviewing proposed executive payment packages
• Valuing a business that a company is planning to purchase

Type #4. Marketing Consultant

A marketing consultant reviews current marketing efforts and identifies ways to improve the results. These consultants often help their client’s business with:

• Creating a new digital marketing strategy
• Running marketing campaigns
• Implementing new marketing and analytics software
• Training the marketing team

Hear from a marketing consultant who created Brandetize with nearly $5 million in annual revenue. The CEO Eric Berman told us:

Type #5. Strategy Consultant

Strategy consulting focuses on helping business leaders create plans that will help the company achieve success. Strategy consultants will often help companies focus of topics like:

• Finding opportunities for growth
• Improving efficiency
• Implementing mergers
• Reducing costs

They may simply provide strategic advice or help with the implementation process like OnStrategy CEO, Erica Olsen. Erica told us:

Find out how they make $6 million by offering consultation and software: 

Type #6. IT Business Consultant

Information technology (IT) consultants help businesses identify and utilize technology that will help the business scale more efficiently. These business consultants help companies with tasks including:

• Identify pain points
• Propose hardware and software solutions to eliminate or reduce the pain point
• Help clients implement the software
• Train clients’ employees on the new software

Type #7. HR Consultant

A Human Resources consultant might help businesses:

• Recruit new employees
• Retain talent
• Develop compensation packages
• Recommend and implement new HR software
• Train the HR team on new software and practices
• Consult regarding how to address employee relations and compliance issues
• Perform staff training on workplace policies and laws

Jessica Miller-Merrell is the CEO of Workology. She told us:

Learn more about being an HR consultant from Jessica below:

Type #8. Pricing Consultant

Pricing consultants focus on helping companies find the right price point to maximize sales for their products and services. Companies hire this type of strategy consultant when they are struggling to encourage purchases through their pricing strategies. To ensure that the client is pricing their items right, these consultants review a variety of data including:

They then propose a path forward.

Type #9. Operations Consulting

An operation consultant specializes in operations management, which is finding the most efficient way to run the administrative portion of the business. This type of consultant may also be called a logistics consultant. Operational consulting will:

• Analyze current operations
• Recommend changes to:
  • Technology
  • Processes
  • Location
  • Job roles
• Help implement changes
• Train the client’s team on changes
• Provide referrals to organizations that can help

Type #10. Sales Consultant

Sales consultants help businesses improve their performance by increasing the sales team effectiveness. These consultants will:

• Analyze current sales techniques and processes
• Provide recommendations to help the sales team increase revenue
• Train their sales team
• Improve sales processes
• Adopt more successful sales team technology

Learn more about how to increase sales.

Type #11. Security Consultant

Security consultants help clients’ businesses with:

Type #12. Legal Consultant

Legal consultants are lawyers that help companies with:

• Regulatory compliance
• Risk mitigation
• Contracts
• Negotiations

A legal consultant is especially beneficial for small businesses that do not have the budget for a full time lawyer. They are also used by larger organizations that need expertise that is beyond their on-staff legal council.

Type #13. Accounting Consultant

Accounting consultants are similar to financial consultants because they advise companies on how to improve their financial position by:

• Analyzing the client’s books and processes
• Suggesting improved protocols, processes, and accounting tools
• Helping prepare companies to go public or pursue funding
• Providing tax advice
• Auditing books for financial statements
• Reviewing and reporting project financial results

Type #14. Data Analytics Consultant

A data analytics consultant helps companies improve their use of data through:

Type #15. Sustainability Consultant

Sustainability consultants are rising in demand because consumers and governments expect businesses to reduce their environmental impacts. These consultants help companies identify areas to help:

• Reduce transportation costs
• Find more sustainable suppliers
• Improve energy efficiency
• Report the sustainability initiatives

If you start a sustainability consulting business, you might want to consider applying to become a benefit corporation. These corporations report on how they are positively impacting society.

Type #16. Engineering Consultant

An engineering consultant helps businesses achieve their design and construction goals. You’ll need an engineering degree, work experience, and potentially, any corresponding certifications. Many smaller construction companies do not have LEED APs on staff, so you can help businesses qualify for projects if you become one and work with them as an engineering consultant.

Type #17. Science Consultant

A scientific consultant helps business by:

• Advising on specialized subjects
• Performing research
• Suggesting solutions to problems
• Implementing scientific solutions beyond the client’s expertise

Type #18. Digital Transformation Consultant

Digital transformation consultants help companies adopt emerging technologies by:

• Understanding the client’s business
• Proposing solutions
• Improving design and customer experience
• Automating processes
• Integrating systems for improved efficiency
• Training clients on unfamiliar technology

For instance a friend of mine just became Chief Metaverse Officer, where he’ll be helping companies adopt virtual reality. Much of his work will be helping clients understand how to transition to the new technology and help improve customer experience.

Type #19. Exit Planning Consultant

An exit planner helps business owners create and implement a strategy to leave their business. Depending on the business owner’s goals this may mean:

Every business is different, so you’ll need to help your clients figure out which exit strategy works best based on their needs.

Other Types of Consultants

Companies often also benefit from lesser-known consultants, like a business idea consultant that helps validate an idea and turn it into a reality. Service business consulting is another form of assistance that helps service entities like plumbers and cleaning companies optimize their business administration.

Ultimately, choosing the right business consultant company for your mindset can help you perform better with the same set of skills.

What’s the Difference Between Consultants and Management Consulting Firms?

Business consultants normally work for themselves or as an employee of a management consulting firm, while consulting firms are larger organizations that have a professional network of management consultants working for them.

If you just want to work for yourself, you’ll want to start a consulting business, but if you prefer to have a team and manage the operations of a business consulting service, you might want to consider starting a consulting firm.

What Does a Business Consultant Do?

A good business consultant will normally:

• Meet with clients
• Collect information about the client’s business
• Perform market research
• Review current operations
• Analyze data to find areas for improvement
• Organize and manage projects based on a client’s needs
• Create recommendations and business plans
• Present the recommendations
• Help the client implement recommendations
• Solve issues that arise during the implementation
• Train employees on the newly implemented processes and procedures

How Much Does a Business Consultant Charge?

According to Upwork, the best business consultants will normally charge between $25 and $200 per hour. The chart below displays the range of hourly rates. Half of business consultants on Upwork charge over $85 per hour with an average of $92.04, but some charge even more.

When looking for a business consultant, IT can pay $500 to $1,000 per hour to find solutions depending on your skills. It’s far more important to be the right consultant than to set your hourly rate at market value. After all, if you can solve a problem in an hour that takes a lower-cost consultant a day, you should be able to make the same amount for solving the problem.

How Much Does a Business Consultant Make?

According to the Bureau of Labor Statistics (BLS), a business consultant’s salary is between $50,000 and $160,000 per year. Business consultants who work for themselves can make far more than that because they also receive the profits from the business, and as a bonus, they can run their business from home. If you run a home-based consulting business, the areas highlighted in orange represent the business expenses that would effectively become income. Data is from IBIS Industry Report 54161.

The job outlook is also much higher than most industries, with a growth of 11%.

How to Become a Business Consultant

You’ll need to develop a reputation to become a business consultant. Consultants normally have a mixture of:

• Hands-on experience
• Education 
• Case studies and testimonials

Let’s look at how each of these can impact how to become a consultant in the business.

Hands-On Experience

There is no greater proof that you know what it takes to succeed in an industry than decades of experience. Many business consultants start by working with industry leaders, rise in the ranks, then enter business consulting. 

There are substantial benefits to saying and proving, “I helped businesses like Disney, Intel, Marriott, and Capital One achieve their leadership goals.” Find out how Libby Gill did just that in our interview below:

Take some time to learn how the industry works before jumping straight into offering business consulting services.

Education

Another key portion of developing expertise is education. There are three main types of provable education for business consultants:

1. Certifications
2. Bachelor’s Degree
3. Master’s Degree

Let’s look at some of the most in-demand education requirements for business consultants.

In-Demand Certifications

• Industry Specific Certifications: There are numerous industry specific certifications that may be helpful to prove the consultant has the necessary skills. Check out Indeed’s list of 20 in-demand certifications.
• Consulting Certifications: There are certification courses that require consultants to:

1. Work a certain amount of time in the field
2. Take courses (or self study)
3. Pass a written exam
4. Take continuing education courses

Some of the most popular certifications include:

• Certified Management Consultant (CMC): The CMC certification requires three years of consulting experience, five client testimonials, a written exam, an ethics exam, and an application fee to join the ranks of certified management consultants.
• Project Management Professional (PMP): Consulting success is often heavily tied into project management. That’s why the PMP is a common certification for business consultants. There are two paths to become a PMP:
  • Bachelor’s degree, three years leading projects, and 35 hours of project management education (or the CAPM)
  • High school degree, five years leading projects, and 35 hours of project management education (or the CAPM)
• Certified Human Resources Consultant (CHRC): The Human Resources Management Institute requires 10 years of experience, four years in management, and passing an exam to become a CHRC.
• Professional Certified Marketer: There aren’t requirements to take the PCM exam, but the American Marketing Association suggests a bachelor’s and seven years of experience for best results.
• Certified Information Systems Security Professional: This certification shows clients you have at least two years of cybersecurity experience. A bachelor’s degree counts as one year. 

Check out more certifications that impress recruiters and hiring consultants.

Bachelor’s Degree

Whether management consultants work for themselves or for a consulting agency, clients still view a bachelor’s degree as a minimum to establish you have the expertise, skills, and most importantly patience to provide consultancy services. Not all schools are created equal, however. Check out the U.S. News and World Report’s top business schools. Consider fields like business administration, data analysis, finance, marketing, HR, or economics.

Master’s Degree

Most professionals in the business world have at least a bachelor’s degree so many business consultant types are expected to have a master’s degree or even a PhD to help some of the top-tier clients. You can also find the top MBAs on the U.S. News website.  

While college is expensive, there are ways to cut costs. For instance, if there is a top-ranked college in your state, you might qualify for in-state discounts. I was able to use the Texas A&M online system to get an education that is valued at over $62,000 for around $25,000 by condensing my coursework into a year and enrolling through one of the satellite schools. This only works if the university system in your state shares online resources.

Case Studies and Testimonials

In addition to experience and education, you’ll want to have proof that you have helped others succeed. This can be in the form of:

• Case Studies
• Google Reviews
• Upwork Reviews
• Client Videos
• Invoices
• Partnerships

The main point is to show people that you have helped others as a business consultant.

Now that you know how to become a small business consultant, it’s time to discuss how to start your own business consulting.

How to Start a Business Consultant Business

You’ll want to perform the following tasks if you want to join the ranks of consulting companies.

1. Do market research. 
2. Write a business plan.
3. Set your pricing.
4. Form your business.
5. Build a website.
6. Create a client proposal template.
7. Market your business. 
8. Help your clients succeed.
9. Measure customer satisfaction

Let’s look at each of these to prepare you for how to be a business consultant.

Step #1. Perform Market Research

At this point you should be able to answer, “What is a business consultant?” and know which type of business consultant you might want to be. So, now you’ll want to research two types of companies to establish how a consultant works. You’ll want to understand:

• Publicly Held Companies: Use IBIS World Reports or the NYU Margins by Sector table to establish the major players in your field and industry benchmarks. IBIS World Reports is easier to use, but is a pay service with 40 consulting business reports. You’ll  probably want their reports for collecting data for clients, so I’d recommend asking about their monthly or annual plans.
• Local Management Consultants: Business consultants work with companies all over the world, but when your company is just getting started, you’ll find it easier to compete in the local environment. That means you’ll need to know who your company is competing against and what others offer in-house.

Make sure to keep track of what McKinsey is doing. They are the biggest business consulting firm in the world and their reports can guide you to new opportunities.

Step #2. Put Together a Company Business Plan

A business plan is just to help you keep your company on track with its goals. You can have a plan that is informal or use one of our business plan resources:

• One-Page Business Plan: Keep it short and simple. Learn how to write a one-page business plan.
• How to Write a Business Plan: Mike Andes explains how he approaches business plans, and we provide a template based on his method.
• Business Plan Template: We provide a template and walk you through how to write a business plan based on how I approach them.

Check out our interview with Mike below:

Step #3. Set Your Pricing

Your company’s finances will be impacted by your pricing. Price yourself too low, and you might not make enough money to survive, get burnt out, and decide to go a different way. Set your pricing too high and you won’t book jobs. Use some of the following tactics to establish a good price point.

1. Check the BLS for consultant wages in your area.
2. Call management consultants and ask them for a quote.
3. Compare pricing on job boards (multiply wages by two then divide by 1,000 hours to get billable rate) and freelance websites. 
4. Determine deliverables, and then calculate the time and expenses to give a fixed-rate price.
5. Charge a retainer. Many consultants will charge a retainer on a monthly basis. This works best with previous clients who understand the value of your skills.
6. If you can negotiate commission based on the value of a positive change, this can be lucrative (but this is rare).

Step #4 Get Business Licensing 

You’ll want to perform the following tasks before operating a consulting business.

1. Become an LLC
2. Get Business Licensing
3. Get Business Insurance 

Some states may require you to pay taxes on services or an income tax. Check with your state business bureau or a tax consultant to understand what you’ll need on a tax reporting basis. 

Step #5. Build a Consulting Website

Most companies today will have a website. You’ll want to create one so prospective clients can:

• Learn about your services
• Learn how you developed your skills as a consultant
• Schedule a consultation
• Pay invoices
• Provide reviews
• Get easy access to tools you regularly suggest (Make sure to use affiliate links to drive extra revenue.)

Learn more about website building.

Step #6. Create a Proposal Template

You’ll want a template for proposals that documents:

• Your Logo: Include your logo in the top left or in another prominent location.
• Both Parties Involved: Include the business name, authorized party name, address, phone number, and email information for both parties.
• Contract Length: Is the project for a few hours, fixed price, or an undetermined length of time?
• Project Scope: What will management analysts review before you propose solutions?
• Deliverables: What will you provide to the business? Companies might offer a document with suggestions, install software tools, and provide training documentation.
• Exclusions: What will not be included in the project? It’s common to exclude the ongoing costs of SaaS software, unless you will be providing ongoing support and billing monthly.
• Payment Terms: How and when will your clients pay your business. Company payment standards should have been determined in Step #3.
• Place to Sign: Include a signature and date block for each party at the bottom.

Step #7. Market Your Consulting Business

In addition to a website, you should market that you’re a consultant. Some of the ways you can market your business include:

• Business Cards: You’ll need them to hand clients. Find out where to get low-cost business cards.
• Blogs: Write about important subjects in your field and optimize it for SEO. 
• Social Media: Share useful information from your social media profile. Participate in business owner groups, too.
• Networking Events: Sure, digital marketing is a great way of reaching customers, but we connect way more with people in real life. Get out there and meet other business owners.

Step #8. Help Your Clients Succeed

Once you’ve booked a client, do everything you can to help your client succeed. You want to prove you are the right business consultant for them. Help them evaluate new systems, help them solve problems or find new clients. You always want to focus on what their needs are.

If you focus on helping them, your business will grow. If you don’t know something or can’t figure it out, find someone who can help. Then, you’ve successfully helped two people and grown your professional network.

Step #9. Measure Customer Satisfaction

One of the keys to growth is showing how what you do helps others. There’s no better way to do that than to ask for feedback. Create a survey that you send with every invoice. Get feedback on what you did well and what you can improve. Don’t forget to include the Google Business Reviews link. 

If a project was something other customers would find interesting, turn it into a case study and use quotes from the customers. Check out this survey from Darby Consulting for inspiration.

Improve the World Through Business Consulting

At this point, you know:

• What is a business management consultant
• Types of business consultants and what they do
• How to become a business consultant
• How to start a business consultant company

The future is yours! Go forth and create a more efficient business. Your knowledge could change people’s lives.

What kind of consultants have you worked with before? Did you find them helpful? What tips can you share from your experiences?