The Economics of Becoming a Consultant

THE ECONOMICS OF BECOMING A CONSULTANT Global consulting industry revenues will be about $391 billion in 2012. The consulting business is BOOMING This represents reasonable growth from $366 billion in 2011 but what goes into becoming one? 24 S COST OF CONSULTING S 24 $100 Average start up costs for a business consultant $20,000 to costs to consider Consultants spend an average of MARKETING $7,462/year on marketing. 22% of consultants spend the most time on networking. 38% of consultants say that referrals make them the most money. TRANSPORTATION INSURANCE Average monthly premium for individual coverage in 2011 was $183/month OFFICE SUPPLIES Income & stock taxes Annual report & registration fees INCORPORATING CONSULTANT VS FULL TIME EMPLOYEE Choosing to be a consultant over a full time employee has its benefits but can also be risky. Benefits Risks Take vacations Choose your when you want Administrative help own hours Steady, regular Benefits and health Set your Pick clients pay care own fees And other things employees take for granted Tech support Work on a variety of projects Refuse assignments SETTING YOUR CONSULTING FEES Strategy consultants How do you want to get paid? usually command the steepest fees. BY THE HOUR BY THE PROJECT Followed by operations-manage Typically IT High-level consultants consultants ment, human like strategic planners resources, and IT gurus. methodologies for setting your rates What price is the market prepared to pay? MARKET-BASED How much would I make OPPORTUNITY COST-BASED if I did something else? hours spent on marketing, prep-work, and follow-up work recent consulting rate income opportunity cost -divided by- number of hours worked X2 = profit margin SIX CONSULTING TOP FIELDS TO GET INTO RIGHT NOW COMPUTER AND INFORMATION SYSTEMS Look at specializing Many of these consulting jobs require just 32% in areas such as cybersecurity, networking or troubleshooting. certification and the skills to do the job. Expected increase by 2018 HUMAN RESOURCES Look for consulting positions within a corporate structure. 22% Expected increase by 2018 Undergraduate degree expected MANAGEMENT Comprise the largest part of the consulting industry. 24% Expected increase by 2018 graduate degree expected ENVIRONMENTAL AND CONSERVATION Large portion of work is in the government sector. 28% 21% of the environmental Expected increase by 2018 engineering sector ACCOUNTING Consider specializing 22% in forensic accounting, accounting software, or international finance Expected increase by 2018 Master's degree and CPA licensing is a plus law. SALES, MARKETING AND PR Fierce Look at specializing competition in this field. 13% in areas like international business or internet Expected increase by 2018 marketing utilization. Sources: http://blog.zintro.com/2009/11/15/255/ http://www.simplyhired.com/a/salary/search/q-consultant http://news.ehealthinsurance.com/priehi/how-much-does-health-insurance-218305.aspx http://www.techrepublic.com/article/where-should-you-incorporate-your-consulting-firm/1031226 http://www.consulting-business.com/marketing-for-consultants-strategies-budget-roi-and-more-survey-results.html PRESENTED BY Zintro http://www.forbes.com/2006/11/06/bostonconsulting-marsh-mckinsey-ent-fin-cx_mc_1106pricing.html http://www.investopedia.com/financial-edge/0810/top-6-consulting-fields-to-get-into-now.aspx#axzz2AI653Rb8 http://www.ehow.com/facts 6926740 much-cost-start-consulting-business_html http://consultantjournal.com/how-to-become-a-consultant http://www.plunkettresearch.com/consulting-market-research/industry-trends http://www.mbopartners.com/#billrate http://www.mbopartners.com/#rightforyou NOWSOURCING mbo partners Setup fee Franchise tax