What Is Consulting? Definition & How To Become One
What is consulting?
When we think of the concept of “consulting”, a number of ideas and concepts may come to mind.
Perhaps some of the more positive attributions are conjured up, those of success, wealth, and contributing to others. Or, perhaps words like “difficult” and “burnout” pop up.
This, as well as the abundance of all other possible thoughts and opinions, is what makes up the context of the entire world of what consulting is; much like how the sport of football is associated with an entire world of its own facts, stories, and accounts.
In order to understand the definition of consulting, we must first set up some context.
Consulting Definition
As such, like any word, there are definitions from many sources. They’re all similar, with a few tweaks here and there.
You may use a different definition than the one outlined below, but for all intents and purposes, Dicitonary.com defines consulting as:
Consulting: employed or involved in giving professional advice to the public or to those practicing the profession.
That’s a stuffy definition. We define it as taking someone, or something (like a business), from where they are now to where they want to be.
For example, you could consult a:
- Startup who wants to go from $20,000 per month in sales to $100,000 (this is a business consultant)
- Political candidate who wants to win their state election (this is a political consultant)
- Mom who wants to go from 140 pounds to 120 pounds by summer (this is a fitness consultant)
In a way, it’s kind of like a counselor for your business.
Why Consultants Are Meaningful
Great independent consultants enjoy the privilege of being in high-demand. All the time. From nearly everyone.
This is because consultants provide highly educated decisions and analysis from an outsider’s perspective on a company’s strategy and financials.
That’s probably the simplest way to put it.
Now let’s flesh out exactly what that entails.
For one, executives, founders, and owners lean on consultants to help them make choices that impact their entire business. After all, decision-making is the main job of the people up top in any business.
So, because these decisions have such wide-ranging effects – whether it be on stock prices, employee retention & satisfaction, revenue, industry-wide practices, or growth – executives hire consultants to aid them in the decision-making process. And consultants get paid big money to do so.
Consultants also play a key role in the success of whomever they are hired to work with. Notice we didn’t say work “for”; it’s a peer-to-peer relationship.
They have more freedom to call the shots than, say, a high-level executive, because they have outside experience from a variety of clients, and they technically aren’t employees of said company. Consultants enjoy the freedom of not being tied down by company politics or job security.
That’s not to say that consultants can close their eyes and shoot at the target.
Rather, it means that political and internal pressures or guarded interests have less sway on a consultant. And this is for the better.
What’s A Consultant’s Purpose?
When a consultant is hired to work for a company, no matter the size, reputation, or stock price, the consultant’s purpose is to address client pain points and to solve them.
In other words, consultants determine a company’s needs, and they provide it.
Consultants are consistent high-performers. They are extremely well-connected to their industry and to the business world. Consultants are highly educated and they know how to perform effective, trustworthy research that is sourced and verifiable.
These professionals provide an unbiased, fresh perspective and decision-making prowess. They gather information and present it in a comprehensive, easy-to-understand manner.
Executives and business owners feel confident and assured when working with consultants. Innovation, cutting-edge technology, and up-to-date tactics, plans, and strategies are all in a consultant’s arsenal—at least a good one’s.
What Do Consultants Do?
Consultants find clients, take referrals, and market themselves and their reputation, using client recommendations, case studies, and innovative industry research.
Next, meetings are held with key decision-makers of a company to assess their pain points. This could be making more money, creating a hiring blueprint, or strategy to scale the business using automation.
For large firms, it could be implementing innovation to avoid being made irrelevant by start-ups or newer players in the industry.
Small businesses often lack security, revenue, or future-proofing, and a consultant will help to provide that.
Lastly, medium enterprises who have a substantial client base and history of performing in their market will be interested in how to scale to the next level of performance, such as franchising and expanding internationally.
In all of these examples, a consultant’s job is to find what is needed or wanted within their client’s current state, and to provide the solutions.
Categories Of Consultants
Now that we’ve set the scene of exactly what consulting is, we can discuss the types of consulting that exist.
Financial consulting
This type of consulting includes all roles that fulfill some sort of financial assistance, whether it concerns revenue and costs, financial statements, accounting, or anything related to the field. Let’s go a little more in-depth with some examples of financial consulting:
- Operations & business systems: Perhaps you are implementing Agile or Lean methodology into the workplace to increase productivity. As a financial consultant, your expertise in ways of working equip you with a keen eye and sense of action. You notice everything, and you provide long-lasting solutions for the entire organization. Whether it’s springing the company into the 21st century with the latest and greatest, or implementing new packages that align better with company costs and strategy, your input is taken seriously.
- Regulatory & compliance: In order to stay legal, businesses must account for their business practices. Living in a free society is one of the greatest accomplishments of mankind. Still, businesses need consultants to aid them in providing everything needed to remain legal, including governmental reporting and documentation of business processes.
- Tax: That fateful date of April 15! Like clockwork, each year, companies must submit their taxes. Everyone from a small business owner to a Fortune 500 firm must account for the money they’ve made and spent in the financial year. As a financial consultant, you will navigate the requirements and help them with what they need. When you do an excellent job, consultants will receive referrals, retain clients, and attract new ones.
- Audit: Much like tax, accountants have the ability to fulfill this role as well. But although apples can fulfill your fruit craving, perhaps you prefer peaches. Same sort of idea here. Financial consultants have a couple things accounting firms don’t, like flexibility and unique industry experience. Plus, some companies only wish to retain one person instead of four or five (partner, manager, senior associate, associate), and in this, you fulfill the need perfectly. Your know-how with managing all requirements for a successful audit are just what they need.
- Reporting: This links well with regulatory & compliance and business systems improvements. Executives always want to know how a company is performing at any given time. The IT industry is exploding with software and tools to help give executives the confidence and information they need to make decisions. Your ability to recommend the right solutions and implement them will be instrumental in the company’s success. Dashboards, real-time tracking; it’s all in your capable hands.
Management consulting
Next, after having laid the groundwork for financial consulting, there is another player waiting in the wings, and that is the role of management consulting.
As a management consultant, you communicate powerfully and effectively with executives, whether they are a business owner, store manager, or CEO.
Doctors, photographers, retailers, restaurateurs, personal trainers, and performance coaches all seek your expert advice in solving their pain points.
This type of consulting is considered one of the most sought-after, and for good reason. Given your consistent high performance, networking, and communication acumen, management consultants enjoy being:
- Well-paid: Whether month-by-month, project-by-project, or by result produced, like providing 5X ROI on ad spend, consultants can become well paid.
- Surrounded by incredible minds: Sure, the stigma exists that executives and business owners are stingy and cut corners. As a management consultant, you flip the script by employing an extremely powerful context about these type of people you’re helping: they are highly intelligent, effective, and capable. As such, when working as their peers and helping them make decisions with far-reaching implications on company growth and success, you are welcomed in with access to some of their greatest thinking.
- New experiences: Consultants often travel and get to see the world one flight after another. They may be hired for work in Buenos Aires, Hong Kong, New York, and Paris all in the same month. The traveling can be grueling, but the new sights, different food, and unique cultures are refreshing.
Management consultants get praise and news headlines, receiving more respect than any other type of consultant.
Hierarchy Of Consulting
1. Done-For-You Consulting
Here’s where almost everyone starts: Advising a customer on a strategy to get better results, and then leaving the role of consultant to perform the service (or hiring people to complete the service). Selling this is the easiest, but doing this is the hardest to scale and you’re often seen as just another hired-hand compared to their most important asset.
Though you do get to see more into how the machine works when you’re in the trenches as a consultant who is also servicing the work needed.
2. Done-With-You Consulting
In this role your job is three parts: do some consulting, do some work, and delegate some work to the client. Your job is often to empower the client by getting them off to a good start and then letting them take over from there to achieve their desired outcome. Consider yourself a mentor who leads by example.
This is a perfect opportunity to transition from someone who does all the work to someone known best for your strategy.
3. 1-on-1 Consulting
In this tier, you’re doing 100% consulting and 0% of the actual completion of the work that follows the strategy.
Your ability to communicate also plays big here as the client will need to stay informed, educated, and encouraged throughout the process. At this stage your ability to identify key metrics, track them, and show progress will help you retain clients for the long-term.
4. Group Consulting
Think of this opportunity as an access to helping as many people as possible and exponentially increasing your revenue. This tier is usually reserved for consultants who have had past success with one-on-one consulting, and have amassed a number of recommendations and glowing reviews.
For example, perhaps you have helped your one-on-one clients to find clients of their own and begin working as their own boss. Your results speak for themselves. Thus, as traffic to your services increases, your entrepreneurial mindset kicks in. You begin offering group coaching where 5 to 25 people learn from you in person, allowing you to make 5 to 25 times the revenue of a 1-on-1 consulting session.
Sounds profitable, right?
5. Online Course
An online course is a total breakthrough for consultants. In this model, you spend time to create an online training program and then sell access to the program where customers can view it on their own time.
Thus, you get paid, but you don’t need to service the clients ever.
And the clients have full access to a training course that spans over a period of 6 to 12 weeks. Each week, actionable tasks will move them forward to the solution they’re ultimately desiring.
A subset of this category would be writing a book using your consulting expertise. Books require upfront time, like an online course, but consultants who publish them will continue to receive book royalties for years to come.
6. Seminar (Mastermind)
With private seminars, also called masterminds, you provide a full-immersion event where you aim to change your customer’s entire business or life in a weekend or week. Consultants perform seminars at private locations and rent out places to make the event grand.
Tony Robbins made this style of consulting famous with his fire walks, Date With Destiny, and Business Mastery seminars. Once you get really good, you can command $20,000 a ticket and host the event at a fancy beach house. It always pays to be the best consultant.
What Route Should You Pick?
Beginners should start out in the done-for-you consulting role where you’re advising an organization and also doing the service yourself.
For example, if you advise a business on SEO strategy and then do the SEO for them, you’re in this role.
The advantages here are you get to learn the effects of your consulting and truly understand what works and doesn’t work.
The disadvantage is you lose freedom of schedule because you’re servicing clients instead of strictly consulting them. Another option is to hire someone to do the services for you, but now you’ll be spending time managing an employee and their needs.
Story Time: The Growing Up Of A Consultant
In order to understand more holistically the life of a consultant, let’s tell a story. After all, stories are how we find deeper insight into complex concepts, ideas, and structures.
Greg’s Consulting Story
Enter Greg. After reading this article and seeing how lucrative and rewarding consulting can be, Greg decides he wants a piece of the pie.
To start off, Greg decides, well, if I’m going to be a consultant, I must first learn more about the industry itself. He finds that in 2019, global consulting industry revenues have so far amassed more than $500 billion. Specifically, management consulting accounts for $133 billion.
Greg plans out what needs to happen. A website, an online sales funnel, and he figures out his service offering, which is that he wants to work with nonprofits in helping them increase funding and stay afloat as viable organizations. He has experience working as a social worker so this is perfect.
Next, Greg creates his website and his funnel and his mission statement.
After some hard work reaching out to the industry, Greg lands a client using a success story from a previous client.
Then he meets with his new client one-on-one once a month, develops a strategic plan for their next year over how to increase funding, and helps them implement it over the next 3 months by meeting with their team each week to track their progress, manage their flight plan, and ensure everything gets done.
Then 6 months later, the company cut costs by 20%, increased funding by $350,000, and expanded to another country.
Greg takes their recommendation and success story, updates his digital content, and rinse and repeat! Because he’s smart, Greg invests back into his business and now runs Facebook ads to start conversations with other nonprofits.
Later in the year, he up-sells his client and they accept his offer to implement paid ads and a sales funnel.
Greg quickly built a rewarding and lucrative career for decades to come.
Brian Robben’s Consulting Story
Brian Robben’s consulting journey shares similar principles as well.
As a successful college student himself, he started out consulting college students on how to dominate college.
Then he wrote three Amazon bestselling books consulting young adults on succeeding in college, getting their first job out of school, and mastering their money habits.
His desire to have more people see his work led him to master SEO, social media marketing, and advertising. Now he consults businesses using his strengths.
Now, in addition to management consulting, he consults individuals on how to start online businesses.
As you can see, consulting doesn’t have to be complicated. It’s simply helping someone to know what you know, or do what you do, to get their desired result.
The way you do it can change. Who you consult can change. But what a consultant does at the core fundamental doesn’t change.
Consultants share from their life to improve someone else’s.
How To Become A Consultant
If after reading this you want to become a consultant, you have three immediate options:
- Invest in yourself and sign up for advertising consulting
- Start a business and take punches for years as you try to figure it out on your own
- Do nothing, and settle for a 9-5 job
I’ll also add a tip: Start reading in your free time.
The best consultants I’ve met are hard-core readers. And it makes sense why.
If you consider your role to enter the battlefield and give your clients the best weapons of information you can, then a well-read consultant will surely be well-read. Not all readers are leaders, but all leaders are readers.
Related: 30 Best Marketing Books For Scaling A Business
Where To Find A Consultant
If you’re a company wanting to find a consultant, this section is for you.
The easiest way to find a consultant is to do this. Instead of hiring an employee or specialist, ask them to engage with your company in a consulting relationship.
This way, you’ll get the best information right from the source. And you won’t have to pay the piper each month for a service that you can learn from the consultant in a matter of months and do yourself.
For example, say your business has the systems and customer support ready to take on a rush of new sales opportunities, and you feel ready to spend money on Facebook ads. Rather than paying an ad agency, hire a Facebook ads expert to consult your staff or you.
The expense breakdown looks like this (not including ad spend):
Facebook advertising services cost: $2,500 per month x 12 months = $30,000
Consulting services cost: $2,500 per month x 2 months = $5,000
So not only do you learn more, but it’s six times cheaper.
Plus, a consultant will supply all research, findings, analysis, best practices, and templates to leave you with the tools to maintain success on your own, long after their engagement ends.
Congrats, now you have a solid understanding of all things consulting. What makes you interested in consulting?