Small Business Consulting: Definition, Types & Cost 2022
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This guide to small business consulting aims to help small business owners determine if they need an advisor and help individuals pursuing a career as a consultant get a successful start.
Table Of Contents
- What Is Small Business Consulting?
- Types of Small Business Consultants
- Small Business Consultants vs. Full-Time Employees
- How To Determine if Your Company Needs a Small Business Consultant
- How Much Should I Pay a Small Business Consultant?
- Is Hiring a Consultant Worth It?
- Becoming a Consultant
- Wrapping Up
What Is Small Business Consulting?
Small business consulting often occurs at the beginning of a business’s operations or when there is substantial business development or expansion.
Small business owners will contact small business consultants to ask questions and streamline operations.
As things begin or grow, it’s crucial to have the right people and processes to ensure success and competency among employees.
What Does a Small Business Consultant Do?
A small business consultant advisors the small business owner on the best strategies for growth, economic development, and business development.
They help coordinate small business administration like HR operations, training processes, and bookkeeping to ensure the client and their business stay organized and on track.
They act as an advisor to the small business owner to give advice and recommendations on improving current operations and building the company up to be more successful.
Is There a Demand for Small Business Consultants?
According to the US Bureau of Labor and Statistics, there will be an increase in demand for small business consultants by 11% between 2019 and 2029.
As more people pivot to start their own businesses and become their own bosses, they need guidance as they step into this new territory.
Types of Small Business Consultants
There are several types of small business consultants who specialize in different areas of operations.
Some act as a more general advisor, while others work for specific purposes such as digital growth or an increase in new employees.
Below are the twelve most common types of small business consultants.
Strategy advisors can give small business owners recommendations on several aspects of their business, from hiring to financials to technology upgrades.
But their main job is to devise a business plan for how to handle a period of growth or improvement.
Marketing can be challenging to navigate because there are so many approaches to take.
A marketing advisor will be able to assess customer behavior and consumer patterns based on market research to determine your target audience and create a marketing strategy to reach and entice them.
Financial advisors act as accountants who assess your finances and make recommendations for cutbacks, hiring, equipment upgrades, and any other expenses you may be on the fence about.
Operations advisors will determine how to streamline processes and trim the fat.
They often help each client develop a growth strategy to make operations more efficient and cost-effective.
Management advisors are a cross between operations advisors and strategy advisors.
They improve efficiency while also developing business plans for future growth and success.
Tax advisors help small business owners navigate taxes to take advantage of tax breaks they may not find on their own.
They also ensure taxes are paid properly to reduce the risk of audits or IRS issues.
Legal advisors will help draw up contracts between clients and vendors and ensure all corporate laws are being followed.
They act as an in-house lawyer to help small business owners understand and handle any legal issues.
IT advisors will help companies with all technology-related operations.
So they’ll assist in web development, software engineering, networking, and infrastructure development.
Recruitment advisors help you determine the best talent for your company, how to find them, and how to make the hiring process as effective and efficient as possible.
They also help make your company more appealing to the top talent.
Sales advisors will assist and advise on anything related to sales operations.
So they will negotiate better vendor contracts and orders, help develop sales pitches and strategies and perform outreach for sales partnerships and promotions.
Digital Transformation Advisors
Digital transformation advisors can fall under the title of IT advisors, but they specifically help integrate new technologies and make sure all operations are up-to-date.
Doing this can include moving data to the cloud, coaching employees on using new programs, and modernizing all functions.
PR advisors help foster a positive reputation for your company.
They help your company maintain a positive public image and elevate your brand to improve visibility on social media platforms.
What Types of Small Business Consultants Make the Most Money?
IT advisors and digital transformation consultants currently make the most money with small business consulting services.
As the world becomes more digitized and automated, companies that don’t move and improve with the times will be left behind.
Having a functional and user-friendly website and streamlined automation in hiring and bookkeeping processes are the keys to a successful small business.
Small Business Consultants vs. Full-Time Employees
Most small business consultants work as independent contractors, not full-time employees with a salary or benefits.
Many small business consultants will run their own small consulting firm so they can be advising multiple businesses at once.
And they may not work for the company for more than a few months or a year.
Once they develop a business plan and streamline operations or install new technologies, they can move on.
Some businesses will keep a consultant on staff full-time.
While this is a typically larger business, some small businesses want to have a legal advisor or tax advisor year after year, ensuring all rules and regulations are followed.
How To Determine if Your Company Needs a Small Business Consultant
There are many reasons to hire a business consultant.
If you lack expertise concerning technology, legal practices, or other essential aspects of running a business, it can help to hire a consultant.
If you feel your business needs to streamline operations and function more efficiently but don’t know where to start, hiring a contracted advisor can fix any issues quickly.
If you go through any period of significant growth or expansion, it’s wise to hire a consultant to ensure the process goes smoothly.
How Much Should I Pay a Small Business Consultant?
The average rate for a small business consultant is between $45 and $150 per hour.
If they set a fixed price, it could be anywhere from $100 to $1,500.
The type of contract and their expertise will determine the fees for each client.
Price Depends on the Industry
Industries that require more expertise will charge the most.
So tax advisors, legal advisors, IT advisors, and digital transformation advisors will be on the higher end of the spectrum.
While sales advisors, PR advisors, and marketing advisors will be on the lower end.
Operations managers and strategic managers will fall somewhere in the middle.
What Is a Fair Consulting Fee?
Consultants with more experience and a track record of success will charge more.
If you hire a brand new consultant, they should set their price lower.
Consultants will consider what training or education they have completed doing the job.
The best way to ensure you’re getting a fair price is to get quotes from three or more consultants in the same industry.
How Do Consultants Bill Clients?
Consultants will charge clients hourly or set a fixed amount for their services.
If a consultant comes in with the clear task of upgrading technology, they may assess the job and then set a fixed price for this job to be completed, no matter how long it takes them.
If the project is more open-ended and flexible, they will likely charge by the hour.
Is Hiring a Consultant Worth It?
Hiring a good consultant is almost always worth it because they may only be present for a short time, but they can make a lasting impact on the success of your business.
Becoming a Consultant
If you’re interested in becoming a consultant, you may have what it takes.
Below are the requirements and steps to becoming a small business consultant.
What Does It Take To Become a Small Business Consultant?
There are few requirements for becoming a business consultant, as it’s all about helping companies find success whether or not you have a Ph.D.
Most consultants need a bachelor’s degree, excellent communication skills, and some experience in the industry they’re advising on.
Requirements for Becoming a Consultant
- Bachelor’s degree
- Experience in the industry
- Ability to find weak spots
- Ability to give clear advice
- Establish a professional network
How To Become a Small Business Consultant [Tutorial]
Follow the steps below to begin your consulting career.
- Choose an area of expertise.
- Make a consulting services website.
- Acquire any necessary certifications.
- Create offerings and consider pricing.
- Network with businesses and other consultants.
- Start with small projects.
- Foster a successful reputation.
Small business consulting can help launch small companies into success and expansion.
Right now, small business consultants are in demand, so if you have the expertise, you can start working as an advisor.
If you have any questions about hiring or becoming a small business consultant, comment below!