Consulting work may seem like a very glamorous profession. Jetting from coast-to-coast for client meetings, business dinners, and hotel room stays. However, at the end of the day, most people select a career opportunity based on the money they can earn. If you are considering consulting as your career, you may be pleased to know it is glamorous, interesting, and pays generously too.
What does a consultant do?
A consultant’s work varies by industry and their personal expertise. The most popular consultancy areas right now are IT, Management, Business, and Environmental. The broad task for any of these consultants is to evaluate a business and find ways to help the company improve their business or meet a specific goal. This can be achieved in many different ways such as refining efficiencies, productivity, staffing, and financials. Basically, consultants are high caliber problem-solvers.
Consultants are normally hired by clients to study and evaluate the business organization. This can take weeks, months, or years depending on the business initiatives. Remember, the consultant has extensive knowledge in whatever area they were hired for and they also have a fresh perspective being non-employees of the corporation. This helps the consultant to recommend changes and improvements within the business. Once the client’s goal has been met then the consultant normally moves on to another customer.
Different types of consultancy work
The most popular consultancy areas right now are Information Technology (IT), Management, Environmental, and Business.
1. Information Technology (IT)
For more than twenty years, IT consultants have remained in high demand. Everything in business these days is automated so having an IT consultant in your corner is often a necessity, no matter the business type.
IT consultants usually fall into the following areas:
- Cyber Security
- Technology
- Telecom
- Sap Security
- Software Implementation
- Websphere
- Senior Lync
2. Management
Management Consultants are usually utilized when a business is transitioning or expanding operations. Management consultants normally fall into one of these areas:
- Senior Risk Control
- Change Management
- Infrastructure
- Project Manager
- Politics and Political Campaigns
3. Environmental
Over the last decade the U.S. state and federal environmental regulations have tightened quite a bit. This change has made many companies more aware of their carbon footprint and the impact their operations can have on Mother Earth. Business will frequently hire environmental consultants to help with green practices.
- Environmental Project Manager
- Environmental Air Quality
- Environmental Auditing
4. Business
Business consultants are used to evaluate the weaknesses within an organization and develop an action plan to resolve that fault. Business consultants fall into many specialties such as:
- Human Resources
- Management
- Customer Service
- Marketing
Average income of a consultant
SalaryList reports consultant salaries range from $30,451 to $944,000, with $79,300 being the median consultant salary (2017). Gross annual income in consultancy will obviously vary depending on the consultant’s industry, level of experience, certifications, skills, and geographic location.
In addition to an annual salary, professionals employed by a consulting firm usually qualify for benefits including profit sharing, bonuses, commissions, and insurance. PayScale advises those additional perks can be quite lucrative. For example, the typical compensation package for a Management Consultant is around $105,964 per year (PayScale, 2018).
This is how it all breaks down:
- Average Gross Annual Salary = $84,960
- Average Bonus = $7,670
- Average Profit Sharing = $3,933
- Average Commission = $8, 139
As you can see, it certainly pays big to become a consultant. The earnings are usually substantial and only increase as you expand your knowledge base. In the world of consultancy, your years of experience and the wisdom you’ve gained make you an authority worth paying handsomely.
How to get twice or thrice your income as a consultant?
If you are working for a consulting firm then you’ll probably follow their internal career ladder. The pay you can earn will be commiserate with each professional advancement. However, if you are working as an independent consultant there are certainly ways to make increase your income.
1. Have an online presence
In our digital age it’s so easy to create a buzz online and is something every business should be doing to get their brand out there. This is an excellent way to market yourself, gain more clients, and increase your income. You can easily create and publish business websites, blog posts, Facebook pages, videos, e-books, and articles. All of these social media outlets will help increase your search results so new clients can find you. It’s also an excellent way to share your know-how and professional success so potential customers will be more likely to trust you.
2. Get others to refer you
You have already put blood, sweat, and maybe some tears into past projects so don’t be shy about getting in touch with your developed network of previous clients. Find out if they know of any other business seeking consulting help. Ask if your past customers would be willing to pass along your contact information and possibly be a reference for your abilities. After all a potential customer will be more secure in hiring you if they get the thumbs up from another business owner. Mine your connections!
4. Learn to network yourself
Part of networking yourself involves meeting new people through professional associations, conferences, consulting workshops, and lectures. Be sure to seize every chance to participate in these types of gatherings so people can get to know you and your business. Not only will you possibly get paid for lending your professional expertise to a lecture or workshop, but you’ll also be networking your abilities.
Explore all opportunities you can even if it only means a quick chat and passing along a business card. Even though these interactions may be small, they can eventually lead to bigger things like a phone call from a new customer offering a paid gig.
5. Learn about your brand’s selling point
You know that McDonald’s is an expert when it comes to burgers and fries. What is your expertise? Are you an Environmental Consultant that specializes in Air Quality? Well, it’s critical for potential clients to understand you are the go-to person when it comes to managing air quality protocol. To do so, you must create and promote a brand story called a Unique Selling Proposition (USP).
Your USP should be reflected in your marketing collateral, your online presence, and your bids for business- all communications and interactions. Your brand’s selling point must become easily recognizable. Your brand’s selling point is what will distinguish you from competitors and helps to create value for your particular services.
6. Create a solid business and financial plan
You’ll need to plan carefully all financial procedures for your business such as how you’ll charge customers (hourly, retainer, mixed rates) and your invoicing policy (a 10 day or a 30-day remittance deadline). Creating a solid business plan that details things like how much money you’ll charge customers and how you’ll collect the money will be very helpful in keeping your business afloat.
You’ll also want to be careful with your expenses and always work to find areas where you can reduce overhead costs while maintaining quality. In fact, by making sure your clients pay correctly and on time while also reducing expenditures, you will certainly see some additional cash in your bank account.
How to protect your brand and earnings as a consultant
You may have spent years learning the ins-and-outs of your respective industry. Maybe you performed hundreds of hours improving network security as an IT consultant. Or maybe you spent years helping large corporations open additional office locations throughout the United States. While it’s great that you are always there for your customers to nurture and safeguard their businesses but are you doing the same for your own consulting business?
The easiest and least expensive way to protect your consulting business is by obtaining a Liability insurance policy. All companies need the security of lability insurance. You are no exception.
Why you need Consultant’s insurance
You can easily purchase a Commercial General Liability (CGL) policy to cover common third party bodily injury and property damage claims. There are a wide variety of reasons an unsatisfied client will file a lawsuit against a consultant. So, it’s important to have a General Liability policy that will offer legal and financial support to fight the claim, as well as pay for any damages should you lose the lawsuit.
Professional (Errors & Omission) Liability Insurance is an added layer of defense for your consulting firm. E & O Liability Insurance is appropriate for lawsuits that arise if a client accuses you of misleading them, withholding important information, providing bad advice, or generally under-performing.
Click here to better understand Liability insurance for consultants.
Average cost and coverage of your insurance
Most liability policies offer limits of coverage anywhere from $1,000,000 and $2,000,000. You’ll want to consider the possible costs associated with an error or a mishap. What would you need to pay to a customer to fix that error or resolve that mishap? This guideline may help you select the right level of liability coverage.
The average premium for consultant liability insurance is anywhere from $1,000 per year to $3,000 per year. It all depends on factors such as your industry, business size, and geographic location. Get a better idea of what your specific consulting business might pay for liability insurance.
Conclusion
Environmental, IT, Management, and Business consultants all perform different work. Yet they all do some things the same: study, advise, problem-solve. They each build important relationships with their corporate customers and most enjoy a robust salary from their efforts. Earning an excellent salary with extra perks like travel and bonuses is very nice. However, being a consultant isn’t without its risks. What if you make a simple human mistake which costs your valued client $500,000 in lost revenue? How will you make things right for the customer while still protecting your own income? Will your business withstand the turmoil of a liability lawsuit? By purchasing liability insurance for consultants you are sure to survive any challenges which may come your way.
Reference List:
SalaryList (2017), [Online] Available from:
http://www.salarylist.com/jobs/Consultant-Salary.htm
PayScale (August 26, 2018), [Online] Available from:
https://www.payscale.com/research/US/Job=Management_Consultant/Salary
