What Is A Consulting Firm And How Does It Work?

By Lilly Chesser
Aug. 29, 2022

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At some point, every organization will run into an obstacle that they need outside help overcoming. Whether it’s an unexpected crisis or a run-of-the-mill growing pain, companies of all shapes and sizes turn to consulting firms to help them successfully tackle their problems.

In this article, we will teach you what consulting firms are and how they work, the different types of consulting firms, and what consultants do. We’ll also give you tips on how you can start your career as a consultant.

Key Takeaways

  • A consulting firm is a professional organization that offers expert advice and solutions to businesses.

  • Usually company leaders will ask an industry-specific consulting firm for their expertise about a problem they’re facing, and the consulting firm will send an expert to work with the company.

  • To become a consultant, you usually need a bachelor’s degree and significant professional experience, but some firms have entry-level positions.

What Is A Consulting Firm And How Does It Work?

What Is a Consulting Firm?

A consulting firm, otherwise known as a consultancy, is a professional service firm offering expert advice, guidance, and practical solutions to businesses and organizations experiencing problems that cannot be dealt with internally.

Problems within organizations are inevitable, and consulting firms are there to address these problems for a service fee.

Consulting firms exist in all sizes, from single-employee firms to firms with thousands of employees, and some consultants work independently of an organization. There are consulting firms across all industries, from management to engineering to government and more.

How Do Consulting Firms Work?

Typically, high-ranking leaders of an organization will reach out to consulting firms that will then send industry experts to address its problems. The consultants will spend time observing and assessing the organization’s operations and will then offer up guidance and practical solutions to the issues at hand.

Depending on the consulting firm, an organization may also receive assistance from consultants or other experts in implementing their solutions via outsourcing.

Most consulting firms have industry-specific focuses. Who consulting firms work with, what they work on, and what kind of deliverables they are responsible for varies depending on the specific firms and projects.

Consulting firms are considered part of the tertiary economic sector, otherwise known as the service sector. According to the Harvard Business Review, In the span of only five years, between 2010 and 2015, the ten largest consultancies’ revenue made 170 billion dollars, with an average annual growth rate of around 4%.

Different Types of Consulting Firms

There are many different types of consulting firms across all industries. Here are some of the most common consulting firm types:

  • Healthcare Consulting Firm. In healthcare consulting, the main focus is on analyzing management practices within healthcare settings. Consultants for a healthcare firm may be experts in medical technology, healthcare payers, pharmaceuticals, and related fields.

    Healthcare consulting firms don’t advise on anything related to medical treatment practices and employment, as they are not medical healthcare providers.

    However, they can be invaluable in helping the business side of medical environments, whether that has to do with mergers and acquisitions, digital transformation, or other areas of concern.

  • Marketing Consulting Firm. Marketing consultants work with companies on advertising and marketing strategies for specific aspects of that company, such as brand image.

    A marketing consultant will be responsible for reviewing a company’s marketing strategy, developing ad campaigns, and/or designing advertisement materials.

    Marketing consultants will likely be experts in subjects such as branding and search engine optimization (SEO).

  • Financial Consulting Firm. Financial consultants, otherwise known as financial advisors or investment consultants, help advise organizations on how best to allocate their monetary resources. They help to develop budgets and financial plans for an organization’s financial goals.

    Financial consultants give personalized, actionable advice to their clients. For organizations, this could look like assessing financial risk, customer and supply chain operations, and corporate financial strategies.

  • Management Consulting Firm. Management consulting is found across all industries, and it’s one of the most common types of consulting. Management consultants advise managers, executives, and high-ranking leaders of an organization on setting organizational goals and making crucial decisions.

    Management consultants advise on both high-level and lower-level management issues. They may be responsible for tasks such as developing a company culture, analyzing profit margins, and setting goals for the organization as a whole and for each department.

  • Information Technology (IT) Consulting Firm. IT consultants help organizations find the perfect technological equipment for their stated goals. Whether the goal is to improve efficiency, build a stronger customer base, or financially grow a business, IT consultants are there to identify the perfect technologies and offer support in transitioning to these technologies.

    IT consultants will create and implement a technological system according to the budget and timeframe they are given to work with. They may also do work such as data analytics or setting up antivirus computer programs.

  • Engineering Consulting Firm. Engineering consultants help plan, design, and construct buildings, structures, and other projects for public and private clients. They may work with construction firms, real estate developers, government bodies, and more.

    Engineering consultants may be experts in fields such as civil engineering or construction.

  • Human Resources (HR) Consulting Firm. Human resources consultants help solve human resource management issues. They may work with a company’s HR department or, in some cases, they may be hired to act as the HR department for a company without one.

    HR consultants use their knowledge within their field of expertise to solve problems, but they also help organizations manage their staff to find their own solutions. They may offer advice on any HR-related issue, including payroll, employee relationships, or conducting interviews.

  • Political Consulting Firm. Political consultants work on individual political campaigns, and they offer assistance in a wide range of areas. Political consultants will develop plans for marketing a politician or candidate in the media, including creating advertisements.

    They may offer plans for political efforts in areas such as voter outreach and mobilization, and they may conduct polling and other research. They also advise on campaign rhetoric.

What Do Consultants Do at Work?

Consultants are experts in their field due not only to their knowledge and skill sets, but to the wealth of insider and expert knowledge they have access to through their consulting firms.

Consultants are hired as third-party contractors to offer guidance and advice, typically on a short-term or part-time basis, to tackle a specific project or issue.

As far as the specifics of what a consultant’s day-to-day work might look like, there are some things that a consultant may be responsible for in the course of completing a project, including:

  • Conducting research online and via text sources

  • Conducting research via an internal knowledge database available through the consulting firm

  • Studying independent party reports

  • Interviewing experts within the industry

  • Interviewing clients of the organization or clients of the industry at large

  • Interviewing customers of the organization or customers of the industry

  • Conducting surveys

  • Mystery shopping, or posing as a customer of an organization to better understand the customer experience

  • Analyzing data

  • Writing the content for presentations

  • Organizing presentations (often with the help of a graphic design team)

  • Presenting findings and advice

How to Become a Consultant

If being a consultant sounds interesting to you, here are the general steps you’ll need to take to build a career in this area.

  1. Get the proper training. To work as a consultant, you need to have a well-developed understanding and base of knowledge in your chosen field. Consulting firms look for candidates with a four-year bachelor’s degree in a subject related to the consulting firm’s area of expertise.

    The specific degree requirements come down to the type of consulting firm you’re looking to work with. It’s always a good idea for aspiring consultants to take a wide range of different classes, especially in business-related subjects.

    No matter what your college education looked like, be sure you know how to market this education well to employers. Employers want to see that you have the knowledge and skills necessary to serve your clients and advance your career.

  2. Develop the right skills. If you’d like to work for a consulting firm one day, it’s a good idea to try and build up some personal skills and attributes that will help you succeed in this profession. Some common skills you’ll need to use in a consulting job include:

    • Leadership. As a consultant, you need to display confident leadership throughout all steps of your process. Your message and advice have much more of an impact when you are able to display confidence and certainty (and by confidence, we, of course, don’t mean arrogance).

    • Public speaking. A large part of your job as a consultant is presenting and communicating your ideas, whether to a CEO, a room full of staff, or anyone in between. You need to be great at delivering your message in a clear, concise, and elegant way.

    • Organization. Throughout the research and data analytics process, you’ll be dealing with enormous amounts of data from numerous sources. You’ll need to be able to keep track of your work and draw clear lines of thought for your clients.

    • Critical thinking. Consultants need to be great at analyzing data and drawing conclusions based on the evidence and established theoretical background. You need to be discerning as a consultant to provide the best solutions.

    • Innovation. As a consultant, you need to have a willingness to be creative and think outside of the box when necessary. Consultants who come up with only one solution and stick with it throughout the entirety of their process are not as successful as consultants who generate a multitude of ideas to test out.

    • Communication. To be an effective consultant, you need to be skilled at listening to others so that you truly understand what they’re trying to say as well as communicating your own ideas and needs. Otherwise, you and your client will walk away frustrated and with no solutions to show for your efforts.

  3. Create a great, tailored resume. The key to job-searching as an aspiring consultant is making sure that your resume is a tailored fit for the position you’re applying to. Read over the job description several times, and use the same keywords to describe your own skills and experience. Be sure to include everything relevant to the position, but no more than that.

    Use this same process to create your cover letter. Keeping in mind the job description, as well as the mission and overarching goals of the company, demonstrate why you’d be a great fit for a starter consultant position. Also, take the time in your cover letter to explain what attracts you to this company.

  4. Work your way up. It’s probably not a surprise to you that entry-level, minimally experienced consultants are not exactly in demand.

    Being a consultant requires not only a thorough knowledge of the industry in question, but of organizational structure and function. You’ll need to build this knowledge through relevant experience if your goal is to become a consultant.

    Though you may not be hired for a consultancy position fresh out of college, that does not mean you can’t work at a consulting firm. There are plenty of consulting firms that offer entry-level or internship positions to help younger employees build the experience they need.

  5. Spend time on your portfolio. Throughout your journey to consultancy, it’s crucial to keep track of your past client case studies and services with a portfolio. Portfolios help you demonstrate the impact of your work to future employers and clients by describing your projects and the results of those projects.

    Focus on projects you are most proud of or ones that had the most impact. You could even ask your clients if they would like to give testimonials or otherwise endorse the work you’ve done. A well-designed portfolio is a must for consultants of any kind.

  6. Build a professional network. Even before you graduate college, take every opportunity to create professional connections. Whether that’s attending job fairs and conferences or asking for informational interviews, having a solid professional network will benefit you throughout your career.

    These connections will not only potentially help you get a consulting job or land a client, but they will also be great resources to go to if you’re in need of a little outside perspective or expertise throughout your career.

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Author

Lilly Chesser

Lilia Chesser is a professional copywriter and content writer based in Columbus, Ohio. She graduated from Denison University with a BA in communications.

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