Pros and Cons of a Career in Business Consulting
Business consultants support many management facets of corporations, such as conducting organizational reviews, realigning processes, or implementing new strategy Read on to discover the pros and cons of a business consultant career to decide if it's the right choice for you.
| Pros of a Business Consultant Career |
|---|
| High earning potential (median annual wage in May 2014 was around $80,880, with the top 10% earning about $148,110 or more)* |
| Promising job outlook (predicted 19% employment growth between 2012 and 2022)* |
| Opportunities to specialize by industry, government agency or business process* |
| Satisfaction of finding solutions to challenging problems* |
| Cons of a Business Consultant Career |
|---|
| Extensive travel** |
| Long hours (many consultants work 60, or even 90, hours a week)** |
| Career progression frequently requires an advanced degree, such as an MBA** |
| Meeting client demands can be stressful*** |
Sources: U.S. Bureau of Labor, **The Princeton Review, ***California Employment Development Department.
Essential Career Info
Job Description
Business consultants, also known as management analysts, help companies become more profitable by cutting costs and improving efficiencies. Some examples of the work that consultants may perform include streamlining shipping and distribution procedures, upgrading inventory management systems and reorganizing companies to eliminate unnecessary jobs. As a business consultant, you'll spend a lot of time conducting research and gathering information. You might interview employees, examine financial data and observe a company's procedures, equipment and personnel. Once you have enough information, you'll analyze the data, propose solutions and recommend new systems and changes. Business consultants often work closely with business managers, and they communicate their findings and recommendations through presentations and written reports. Self-employed business consultants may also draft proposals and bid on new projects.
Businesses often hire consultants on a contractual basis. Once a project ends, these consultants must move on to the next organization, which could be in a different state or country. Therefore, to meet with clients, frequent travel is often required. Many business consultants leave their homes on Sunday and don't return until Thursday or Friday for weeks, months and even years. As a consultant, you can also expect to work long hours. In 2012, the U.S. Bureau of Labor Statistics (BLS) reported that almost one-quarter of all business consultants worked more than 40 hours per week. According to a survey conducted by The Princeton Review, new consultants often work 60 hours per week, and some even put in 90 hours per week.
Specializations
Many business consultants specialize. For example, some consultants focus on a business area, such as inventory management or reorganization. Others may concentrate on an industry, such as health care, finance or telecommunications. Consultants who work with the government may specialize in work with a particular agency.
Salary Information and Career Outlook
The salaries of business consultants can vary depending on their previous work experience, educational attainment, geographic location and industry, as well as their performance bonuses and the size of the companies for which they work. According to statistics released by the BLS in May 2014, the majority of management analysts earned salaries between $45,360 and $148,110 per year, and the median annual wage for these professionals was about $80,880.
The employment outlook for business consultants is strong, because companies should continue to seek advice from consultants in managing costs and improving efficiency. The BLS predicted employment for management analysts would increase 19% between 2012 and 2022, which is faster than average for all occupations. According to the report, smaller, more specialized consulting firms are most likely to grow in the upcoming years. In 2014, management, scientific, and technical consulting services employed the lion's share of business consultants (about 27% of the consultants) and smaller industries such as transit and ground transportation and support for mining activities prove to be the most lucrative ($152,220 and $120,260 annual average salaries, respectively).
Education Requirements
For a business consultant career, you'll most likely need a bachelor's degree. Most schools do not offer a consulting major. Thus, you'll need to obtain a degree in a subject that is relevant to the kind of consulting you wish to do, such as business, management, marketing, accounting, economics, statistics, information science or engineering. Some employers prefer their business consultants to hold a master's degree in business administration (MBA), especially to advance in the company. According to the BLS, 28% of business consultants had a master's degree, as of 2010.
Useful Skills
To succeed as a business consultant, you'll typically need the following skills and qualifications:
- Analytical, critical thinking and problem solving abilities to assess organizational difficulties and propose solutions
- Self-confidence to work with clients and handle pressure
- Strong listening, speaking and writing skills to effectively communicate with company personnel and clients
- Time management skills to complete projects within tight deadlines
Real Job Postings for Business Consultants
Most employers seeking business consultants require at least a bachelor's degree and some previous work experience. They also tend to look for people who are team leaders, strong communicators, confident and outgoing. The following sample job postings, obtained in May 2012, can help you better understand what employers were seeking:
- A consulting firm in New Hampshire sought a business consultant with at least a bachelor's degree and 10 years of experience in sales, marketing, business ownership, upper management, profit and loss analysis, finance or operations. Once hired, the new recruit would travel Sunday through Friday for approximately 48 weeks each year.
- A financial services company in Austin, TX, needed a business consultant with a bachelor's degree in business or economics and 1-4 years of experience. The employer provided a training program in tax and finance, so experience in those areas was not necessary. Additionally, the ability to establish and build relationships with clients, effective communication skills and attention to detail were a must.
- An information services company searched for a business consultant to work in one of their California offices. Requirements included a bachelor's degree, preferably in economics, finance or statistics, and five years of business experience, preferably in statistical modeling or financial risk management. The employer wanted someone with strong communication and presentation skills, a proven ability to lead project teams and an in-depth knowledge of analytical techniques and decision-making tools.
How to Beat the Competition
Employers and clients usually prefer business consultants who have deep knowledge in a certain area or industry. For example, if a company has a human resources problem, they'll probably choose a human resources specialist over a generalist to help solve it. The BLS suggests that business consultants should develop specialized expertise to improve their job prospects, especially with consulting firms that specialize in certain fields. Gaining relevant work experience in a particular area and taking related courses could help you obtain this knowledge.
Become Certified
Although employers typically do not require the Certified Management Consultant (CMC) designation, earning it may give you an advantage over your competition. According to The Princeton Review, when making decisions around hiring and promoting employees, employers may consider the CMC designation to be more valuable than the amount of experience a person has. The BLS concurs, predicting that business consultants who have the CMC designation could have a competitive advantage over those who don't have it.
The Institute of Management Consultants USA (IMC USA) awards the CMC designation. To obtain it, you'll need to meet the criteria for education and experience, provide client reviews and pass oral, written and ethics examinations. To keep the designation throughout the duration of your career, you'll need to meet IMC USA's renewal requirements, which include taking continuing education courses, teaching classes and/or obtaining other certifications.
Other Careers to Consider
Financial Manager
Financial managers monitor and analyze their company's financial data, create financial reports and make recommendations to senior management about ways to earn more money. You'll need at least a bachelor's degree in finance, economics, accounting or business administration, and several employers require a master's degree. Additionally, five or more years of experience in a related area, such as accounting, auditing, lending or securities sales, is typically needed. Many financial managers also obtain a certification, such as the Certified Treasury Professional or Chartered Financial Analyst designation, although it's not required.
In May 2011, the BLS reported that financial managers earned a median salary of about $107,000. The BLS also predicted slower-than-average 9% employment growth between 2010 and 2020. However, that number jumps to 20% for financial managers who are self-employed.
Market Research Analyst
As a marketing research analyst, you'll collect information about the markets in which your company does business and use the data to help the organization decide how to market its products and services. Most marketing research analysts have degrees in such areas as marketing research, statistics, computer science, business administration and communications. If you want to advance in this career, you'll probably need a master's degree.
While the salary is less than that of a business consultant (the BLS reported a median annual wage of about $60,000 for marketing research analysts and marketing specialists in May 2011), the job outlook is outstanding. According to the BLS, employment of market research analysts was predicted grow 41% between 2010 and 2020, which is much faster than average.
