Consulting Business Models
A knowledge based industry, where relationships are key.
Often, the consulting industry is based on being able to connect companies with experts in various fields.
Typically makes money in one of 3 ways:
1. On a per hour basis
2. On a per project basis (fixed fee)
3. On a retainer (monthly fee)
business consultant example 1
business consultant example 2
Management Consulting
When MBA students refer to "consulting", they typically are referring to Managment Consulting positions with companies such as Bain, Arthur Anderson, or
Wikipedia on "Consultant":
The A Conslutant (from the Latin consultus meaning "legal expert") is a professional who provides expert advice in a particular area of expertise such as accountancy, the environment, technology, the law, human resources, marketing, medicine, finance, public affairs, communication, engineering or waste management.
The main difference between a consultant and a 'normal' expert is that the consultant is not himself employed with his client, but instead is in business for himself or for a consultancy firm, usually with multiple and changing clients. Thus, his clients have access to deeper levels of expertise than would be feasible for them to retain in-house, especially if the speciality is needed comparatively rarely.
Ways in which consultants work
Often a consultant provides expertise to clients who require a particular type of knowledge or service for a specific period of time, thus providing an economy to the client. In other situations, companies implementing a major project may need additional experienced staff to assist with increased work during that period.
More recently the term is also used somewhat euphemistically for temporary staff. That resource is only temporarily employed by a company to augment the company's core set of employees without providing any unique expertise. This usually indicates that the consultant could be expended when demand for that particular skill diminishes, though this expendability is sometimes recompensed with higher pay. The consultant is usually employed through a limited company which they themselves own, or through an umbrella company.
Sometimes a consultant is not an independent agent but is a partner or an employee of a consultancy, that is a company that provides consultants to clients on a larger scale or in multiple, though usually related, skill areas. This has advantages both to the client and to the consultant by:
* Providing a pool of talent that can be quickly mobilized as required
* Reassuring the client about the quality of the consultants supplied
* Giving the client access to the experience and methodologies of the whole consultancy rather than an individual
* Introducing the consultant to new experiences and techniques which may, eventually, permeate through the consultancy as a whole
A consultant giving career advice and training to an individual or a team is often termed a coach, and a consultant assisting an organization to develop a new strategy or solve a particular problem is sometimes referred to as a facilitator.
Strategy consultants are common in upper management in many industries. There are also independent consultants who act as interim executives with decision-making power under corporate policies or statutes. They may sit on specially constituted boards or committees.
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