Consulting services are popular all over the world, because they can be used to solve various kinds of business problems that are not directly related to the main activities of the company. Using consulting, the company has the opportunity to focus on core business.
Consulting is very useful service for businessmen. Those who have never used consulting services are interested in their cost. Not everyone understands the economic benefits of attracting specialists from outside, but it can be very significant.
In order to appreciate the value it can bring consulting company for business development, we will give a definition and consider the essence of this concept.
What is consulting?
Let's start with the definition of consulting according to the Oxford Dictionary.
Consulting means "to be in the business of providing expert advice to people working in a particular field." In other words, a consultant is someone who gives advice to a specific group of people.
Consulting is expert advice business a certain group of people.
A consultant is someone who has a certain level of knowledge that a certain group of people find valuable, and people in that group are willing to pay the consultant for access to their experience.
Note that there is nothing mentioned about majors, degrees or certifications. If you can provide expert advice to a specific group of people, you can be a consultant.
All this begs the question, why is consulting so valuable?
The answer to this question lies at the heart of the meaning of counseling.
The true meaning of consulting - a consultant is one who gives advice. Therefore, it is worth asking the question “why do people buy advice”?
Why do people ask for advice?
They want to change something, achieve something and they need help.
If the financial condition of the company is not what the leaders want. That being said, they know what their desired state is, but they need advice on how to get there.
That's why people want advice. They want to get from point A to point B, but they don't know how to get there. They are either lost or face obstacles they don't know how to overcome.
The true meaning of consulting is to help people solve problems and move from the current state to the desired one.
And the more valuable the desired state is for someone, the more he is willing to pay for help.
For example, if a small business owner earns 60 million rubles. per year and their goal is to make 120 million rubles. per year, achieving their goal for them is 60 million rubles, and they are probably ready to pay 5 million rubles, 10 million rubles, 20 million rubles, perhaps even up to 60 million rubles.
Consulting in a Nutshell: Helping People in solving problems and achieving results.
So if achieving a desired state is so valuable to people, why don't they just figure it out on their own?
Why do people hire consultants
There are three main reasons why people decide to take outside advice:
- They are simply not able to understand it or get to the desired state on their own.
- They have a general idea, but they want to get there faster.
- They want to save time and effort by following an effective, proven system.
Three main types of consulting companies
When someone says, "I'm a consultant," they usually fall into one from three categories.
- Management consulting.
- Corporate consulting.
- Independent consulting.
Management Consulting is what most people think of when someone says "consulting". This area is dominated by large firms to help businesses improve strategy and operations or manage significant business events such as mergers and acquisitions.
Independent consulting comes up often when someone has developed experience in an area they choose to build and run their own business around that experience rather than continue as an employee.
Specific Sold experience can be almost anything, and thanks to the emerging gig economy, thousands of new independent consultants are creating very profitable businesses for themselves.
How can you become a consultant?
Exists two main ways to get a consultation:
- Get a job.
- Start your own business.
While getting a job in consulting is more competitive and more challenging than ever, starting your own consulting business is still no easier.
With the rise in staff costs, more and more companies are looking for temporary and permanent external assistance, often in the form of consultants and “do it for you” services. If you are interested in starting your own consulting business, there has never been a better time to get started.
According to RBC, in 2017 companies spent about 120 billion rubles on consulting. This is almost the same as invested in marketing promotion on the Internet. Consultants earn over 150,000 rubles a month and do not stop there. So what is consulting and who can benefit from it? Let's figure it out.
Consulting - this is paid expert advice to business leaders and private entrepreneurs on a wide range of economic, industrial, commercial and other issues to optimize business processes, increase and improve key performance indicators.
Simply put, consulting is paid qualified assistance to organizations that need independent evaluation current activities, analysis of business processes and subsequent recommendations for doing business and improving its efficiency.
If it is quite simple, then consulting is consulting assistance to top managers of enterprises in business management.
Who was at the origins of consulting
The main reason for the emergence of global consulting was industrial progress. Many competing factories appeared, the number of jobs increased. Managers needed new knowledge on the organization and management of the enterprise.
This prompted Arthur Little, a chemist at the Massachusetts Institute, to found the first consulting firm in 1886. Arthur's company specialized in engineering and technical research, helping enterprises improve shop floor performance and reduce production costs. Employees of the company analyzed the activities of plants and factories, found problems and drew up a strategy for solving them.
With the development of consulting services and the emergence of new companies, there was an urgent need to systematize the acquired knowledge, exchange experiences and ideas. But Arthur was categorically against any systematization and refused to join a professional management consulting association. While other consultants tried to build on past successes, he took huge risks, each time creating new strategies to solve business problems. This approach failed, and his firm collapsed, giving way to companies such as McKinsey and Booz Allen Hamilton.
In the 1930s, consulting gained worldwide recognition. This was facilitated by the end of the global economic crisis and increasing industrial production. Gradually, consulting companies spread everywhere. In Russia, this period falls on the 90s of the twentieth century. At the end of 2017, the Russian rating of the best consulting agencies is divided among 100 companies.
Tasks and goals of the consulting company
The main goal of consulting companies is to improve the efficiency of the organization and business as a whole. An enterprise focused on development and growth will always need to attract additional resources. But modern companies do not maintain a large staff of experts, but turn to qualified personnel from outside.
It is this fact that attracts specialists from various fields of activity to consulting.
The main list of tasks of consulting companies:
- performance improvement recommendations;
- development of a marketing strategy;
- analysis of the current situation and identification of problems;
- advice and solutions for the modernization of the technological process;
- audit of reporting documentation;
- assistance in the reorganization of business units;
- staff training and preparation of methodological manuals.
Let's consider these tasks in more detail:
High market, market glut with goods and services is forcing managers to increase advertising costs, attract new advertising channels and expand sales markets in order to maintain a stable market position. These actions often do not lead to the desired result and the company begins to lose profits. Management turns to a consulting firm for expert independent advice on how to get out of a crisis situation. The consultant may recommend upgrading the technical base, finding ways to reduce costs, suggesting that the company open a new promising direction or increase staff motivation.
2 Development of a marketing strategy.
A consultant helps businesses promote their products and services, increase profits and reduce costs. The promotion strategy includes analysis and segmentation of the target audience, identifying the needs of each segment, finding effective advertising channels for promotion, and launching an advertising campaign.
3 Analysis of the enterprise activity and search for problems.
When an enterprise cannot find a problem on its own, management turns to a consulting company.
Why choose a consulting agency? Because not every organization can afford to maintain a staff of experts who could analyze and solve current problems. The problem can arise in any field of activity of the enterprise - financial, legal, personnel and others. In this case, the management decides to turn to qualified consultants. The task of the consultant is to analyze the work of the enterprise, its departments and, based on an impartial assessment, find vulnerabilities.
4 Consultations on the modernization of the technological process.
Technology is developing at a rapid pace and businesses do not have time to keep up with trends. Consulting companies will help improve the software or introduce new ones.
5 Audit of reporting documentation.
The consulting company conducts an independent audit of the financial statements of the enterprise, the compliance of documents with general accounting requirements. An audit is ordered to find errors in reporting activities, before submitting documents to the tax office or when changing the chief accountant of an enterprise.
6 Assistance in the reorganization of business units.
Reorganization is the termination of the company, the accession of other legal entities to it, the merger of companies or the division of management between the owners. Not all organizations have lawyers specializing in business reorganization on their staff. Therefore, management turns to a consulting firm in order to attract outside experts to carry out the reorganization in compliance with applicable law.
7 Staff training and preparation of methodological manuals.
Consulting companies help enterprises to increase the level of competence of employees by conducting trainings in various fields of activity. For example, trainings and seminars for sales departments, trainings for managers on leadership, improving management skills and effective use time. Trainings on teamwork, on working with objections and conflict situations are popular. Consultants can also develop methodological aids, such as sales scenarios or instructions for operating equipment.
In every business, there comes a time when a transition to a new level of development is necessary. Any enterprise seeks to increase profits and improve its efficiency. During periods of economic crisis, this is especially true for all companies that want to stay afloat. But internal resources and experience of full-time specialists are often not enough - it is then that there is a need for outside expert assistance, and management turns to consulting.
A consultant in consulting is an expert who provides consulting services to companies or individuals in order to achieve their business goals. Consultants analyze business performance, identify problems and suggest ways to solve them.
The consultant may be an employee of a consulting firm or a private entrepreneur.
Many think of consultants as a white-collar community with laser pointers and innovative gadgets. However, in practice this is not the case at all.
Consultants are ordinary people who are skilled in their work.
An example of consultant activity:
The pharmaceutical company plans to launch a new product line - vitamin supplements for athletes based on natural plant extracts. On their own, they cannot evaluate the effectiveness of the new project. Management enters into an agreement with a consulting agency. Consultants evaluate firms, analyze assets, study the market. After a detailed analysis and calculation, they conclude that the new direction is promising and the company's profit is within 10-20%. The management pays for the work of consultants and proceeds to launch new products .
Clients make different requests to consulting companies.
Let's look at a few examples:
Based on customer requests, consulting services were formed into 5 main forms:
1 Analytics.
Analysis of the current activities of the organization, the interaction of its divisions, the study of market demand, the competitive advantages of the company and opportunities for growth and development.
Example: The company has a constant turnover of staff. The manager could not find out the reason and hired a consultant who analyzed the work of the staff and identified the problem at the stage of adaptation of new employees. New people came to the company and did not receive support from experienced colleagues. This led to conflicts and frequent changes in personnel.
2 Forecasting.
Drawing up forecasts for the development of the company, identifying promising areas, assessing profits from the launch of new projects. A consulting forecast is never based on the consultant's guesses, it is always based on figures and facts.
Example: a wholesale company selling cabinet furniture decided to expand its activities and open 10 regional branches. To determine sales channels and identify the needs of buyers in the regions, the company enters into an agreement with a consulting firm. Consultants evaluate competition and customer demand in this segment and make a detailed forecast of the company's development. Based on this forecast, management changes its policy and opens only 6 branches instead of 10.
3 Expert advice.
Consultations on any issues, advice on solving problems. They are carried out one-time or on the basis of a long-term contract.
Example: transport company turned to a consulting firm for advice on reducing the tax burden. As a result of the implementation of the consultants' recommendations, the company was able to reduce tax costs by 40% and use the saved money to expand the fleet, which ultimately led to an increase in cargo transportation and profit growth.
4 Audit of the company's activities.
Independent verification of the current activities of the enterprise, search for problems. For example, checking accounting documents, the effectiveness of the sales department, the work of the technical support service.
Example: to improve the quality of customer service, the company commissioned a consulting audit. The consultants listened to the recording of telephone conversations, evaluated the work of sales departments using the mystery shopper method, conducted a survey of existing customers. As a result of the work done, scripts of conversations with potential customers were compiled, options for processing objections were finalized, additional company products such as Upsell and CrossSell were introduced, which made it possible to improve quality of service and increase sales by 20%.
5 Direct participation in the project.
Very often consultants are invited not only for recommendations and checks, but also for direct participation in certain projects. This may be the introduction or testing of new software, staff training, conducting a legal process in court.
Example: company - a developer of games and mobile applications, is going to release a new application for learning Spanish. The application is made in the form of a game in which the user learns new words and passes game levels. In order to identify possible flaws and understand the reaction of users, management enters into an agreement with a consulting firm to test the application and solve problems found.
Types of consulting
Regardless of the form, consulting is divided into types. Below are the 8 main types of consulting:
IT consultants offer solutions for using technology to improve company performance. For example, developing new software, testing or upgrading existing programs.
Due to the prevalence of hacker attacks, IT consultants are increasingly involved in computer security and the implementation of effective protection.
Case 1: Checking IT infrastructure
The head of a law firm turned to the consulting firm Aitilia to conduct an audit of the IT infrastructure. As a result of the check, it turned out that the video filming from the company's office was available for viewing by any Internet user. IT consultants found a critical error in setting up the installed video surveillance system. The password to the IP cameras and the connection port were not encrypted and were in the public domain. The consultants set up remote access only to the computers of the company's management and closed the broadcast from the cameras to the Internet.
Case 2. Improving the work of the Call Center
Yota turned to the consulting firm PM Expert with a clear task - to find and implement a solution to reduce the load on the company's call center. IT consultants have developed and implemented a "virtual consultant" system. The purpose of the system is to answer popular customer questions without the participation of call center employees.
Management consulting
Management consulting is a set of measures to ensure the sustainable position of an enterprise in the market and improve its key performance indicators. One of the main tasks of management consulting is to find problems that hinder the effective development of the company and eliminate them in the early stages of their occurrence. Management consulting helps managers and business owners to develop a common strategy for the development of their enterprise, to create strong competitive advantages in the market, to increase the client base, to assess the profitability of new projects and to optimize interaction between company divisions.
A management consultant can be compared to a general practitioner who defines a general problem, formulates a treatment strategy and refers to highly specialized doctors.
The goal of the consultant is to see the whole picture and identify ways to increase the profitability and competitiveness of the company. He forms and controls a strategy to achieve long-term goals, which will eventually lead the company to a new stage of development. The development of a step-by-step strategy is the main goal of strategic consulting, which is part of management consulting and is closely related to it. Without the development of a strategic action plan, it is impossible to solve current problems and provide the company with a stable market position.
To implement the strategy obtained, methods of advertising promotion of the company on the market are developed, an analysis of the target audience is carried out, and effective advertising channels are searched. This is done by marketing consulting, whose actions are aimed at increasing the company's profits, increasing the number of loyal customers and reducing production costs.
Thus, strategic, marketing and management consulting are three parts of a single mechanism.
Financial advisory
Financial consultants are engaged in a comprehensive improvement of the financial situation of the business. This includes advice on how to manage your expenses, the development and implementation of investment strategies, advice on corporate insurance, tax issues and day-to-day finances.
Financial consultants will help to appropriately allocate financial resources, evaluate the costs of implementing projects, assess the payback periods of these projects, calculate financial risks and draw up a financial strategy for the effective distribution of funds.
A manufacturing company turned to a consulting agency to review the financial statements and find opportunities to increase profits and reduce costs. The company produces 30 types of products, contains 5 large workshops. After studying the annual financial statements, the consultant came to the conclusion that the company can increase profits if it divides production into 5 separate areas, which will be distributed among the shops. The financial report showed that the 2nd shop is making losses and should be abandoned, and the 4th shop will bring 2 times more profit if the financial resources freed up when the unprofitable direction is closed are directed to its development. The consultant also assessed the payback period for additional investments and calculated possible risks. After the work done and the recommendations implemented, the company's profit increased by 50%.
HR consulting
HR consultants specialize in the social life of the company. They evaluate the staffing, identify problems in the interaction of departments, hire new employees and correctly distribute social roles. HR consultant tests, develops and implements personnel motivation and encouragement systems, resolves conflicts and looks for ways to prevent them.
The consulting firm was contacted by the head of a company selling mobile phones and accessories. The company consisted of 10 branches and maintained a staff of 120 employees. Management noticed that Last year increased number of customer complaints. Most of the claims pointed to the lack of competence of the sales staff. Customers did not receive answers to their questions and refused to purchase. The task of the consultants was to assess the effectiveness of the talent pool and increase the motivation of the staff to further develop and improve their knowledge. The management wanted to solve this problem with the help of certification. But the staff specialists of the personnel department did not have sufficient knowledge in this matter.
The consultants were able to carry out certification without causing discontent and stress in the team. As a result of the audit, employees were sent for additional training. Some employees had to be laid off. Over the next 3 months, the company did not receive a single complaint, and profit increased by 20%.
Investment consulting
Investment consultants seek and evaluate investment projects for a profitable investment of funds, help to choose a broker, draw up an investment plan and investment portfolio, advise companies or individuals on asset allocation.
A 53-year-old military pensioner approached an independent consultant with the aim of increasing his pension savings through profitable investments and regular replenishment of his investment portfolio. The client had an active income of 30,000 rubles, and a pension of the same size, which he did not spend, but accumulated for the initial investment capital. The consultant made a calculation and found out that in 10 years the client will be able to receive passive income in the amount of 10,000 rubles per month, subject to the accumulation of $ 100,000, taking into account inflation and subsequent investment of the collected funds. The consultant drew up an investment plan, according to which the client was recommended to open a savings account in a foreign company with the condition of monthly replenishment of $500 and the possibility of receiving a permanent passive income in 7 years, that is, by the age of 60.
Legal consulting
The task of a legal consultant is to seek, prevent and solve legal problems of an organization or individuals. The field of activity is extensive - legal assistance in matters of employment, preparation of documentation, corporate and intellectual property, real estate and other aspects.
The founder decided to liquidate the organization, the chief accountant of which quit and could not solve the problems of the company. To search for possible violations in reporting, to better understand the liquidation process, the director turned to a consultant. The consultant found a debt with the company, advised on the ways and time to solve the debt, and warned the client about possible risks. Having the necessary information, the manager was able to close the debt before the start of the liquidation of the company and carry out the liquidation procedure without any problems.
Accounting consulting
Accounting consultants put things in order in accounting, help companies understand accounting documentation, find opportunities to reduce the tax base, analyze accounts payable and determine the profitability of the business.
The company enters into a contract for the supply of medical equipment with a foreign organization. Staff accountants do not have sufficient experience to conduct a transaction. The manager hires a consultant from a consulting company to maintain reporting documentation and currency control in order to comply with legal regulations and avoid reporting errors.
Educational consulting
Training consulting performs the following functions: training employees, conducting trainings and seminars, compiling methodological documentation.
The head of the company needed the help of third-party consultants to train sales staff. The sales staff had poor command of the cold negotiation technique and faced constant objections from customers. The company suffered losses. The consultants wrote selling scripts, taught the staff how to work with objections and telephone conversations. With the introduction of scripts and the knowledge gained, sales increased by 30%, the company's profit increased.
How not to make a mistake in choosing a consultant?
There is no magic formula or secret that makes one consultant more successful than another. A good consultant knows the nuances and subtleties of the area in which he advises.
He is not afraid to take responsibility and give guarantees. The results of his work are measurable. This is the main difference between a good and a bad consultant.
The main criteria for choosing a consultant:
1 concrete results.
The effectiveness of the work done is determined in precise measurable terms. If the consultant is not ready to provide them, then his qualifications are insufficient for consulting.
2 Awareness of the client's problem.
The professional will study the client's problems in advance. By pointing out solutions that the client has not seen before, he will demonstrate interest and confident knowledge of the subject. It is important.
3 Craving for questions.
An experienced specialist does not hesitate to ask questions. He is not in the shadows and is actively involved in the project. The more expert questions the consultant has, the more likely it is that the client made the right choice.
4 Flexibility.
The professional respects his own point of view, but listens to the opinion of the client. Flexibility is one of the main qualities of a good specialist.
5 Practical activities.
The professional prefers practice to theory. The desire of the consultant to implement the generated ideas indicates his experience and desire for great achievements.
Now you can choose your own consultant. But what about a consulting firm? Which one should you contact? Read more about this.
Business development is influenced by multiple factors, and sometimes the strategy for its functioning is not clear.
If it is difficult for the management of the company to calculate some steps, then it is useful to see the activities of the company from the outside with the help of a competent person. They often act as a consulting company that produces a specific type of service to optimize the activities of various business structures.
Consulting to some extent there is a rescue of other companies in modern world economic and technological risks and crisis processes of business development. It makes no sense for enterprises to spend money on creating their own advisory service; it is enough, if necessary, to attract outside professionals. Consulting services incredibly popular today, because any company wants to win in the fierce competition.
The concept and characteristics of consulting
Consulting refers to business activities for the provision of consulting services to various companies. The concept itself is borrowed from in English and means "advice". It is impossible to unequivocally answer the question about the scope of the consulting firm. According to popular opinion consulting as long as there are main and support functions or departments in a large manufacturing company (management, legal service, finance, sales, technology, IT service, strategy, etc.).
primary goal activities of a consulting company - optimization, increasing the efficiency of the business of its clients.
Traditional types of services consulting firm in all areas of the production sphere of the enterprise are:
- analysis,
- diagnostics,
- audit,
- forecasting,
- substantiation of development prospects,
- trainings, etc.
Help can consist of both competent advice and practical assistance in the work of the client.
All tools, methods and technologies consulting must be verified and scientifically sound. Consultants are required to provide their services with the maximum degree of objectivity. It is unacceptable to use existing connections and relationships in the business world to solve customer problems.
consulting specialist(consultant) must have a higher education and work experience in the chosen field. He must combine such traits as communication skills, flexibility of thinking, willingness to compromise, be knowledgeable in legal and organizational issues, marketing, computer literacy, accounting, securities.
When services of these companies are needed
Motives for appeal in consulting firms can be the following:
- The company's need for knowledge, experience, fresh ideas;
- Overcoming a critical situation in one or more areas of the company;
- Lack of agreement on an important issue among the company's management personnel;
- Assistance in the completion of business projects.
At the same time, consulting professionals are not responsible for the final result of the activities of their clients, since they cannot interfere in the internal affairs of organizations. With the help of consultants, the firm itself approaches integrated systems vision internal state of affairs, existing problems in production, as well as possible options for their solution, further strategic planning.
It's important to understand that companies don't necessarily turn to consultants when they're already in crisis. On the contrary, many large reputable enterprises want to consolidate and strengthen their commercial success, take care of expanding the scale of their activities, finding the right unhindered path for further development.
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Varieties of consulting services
Despite the universality of the consulting business, it can be distinguished many sustainable varieties of services depending on the areas of activity in the structure of any company.
Let's pay attention to some of them:
- Audit;
- Legal;
- Investment;
- Financial;
- managerial;
- Small business consulting;
- IT consulting, etc.
In progress audit consulting the collection, receipt and comprehensive assessment of all systems of the applied company is carried out, the real situation at a given point in time is revealed. It also establishes the correct and reliable financial statements of the enterprise and its compliance with existing legal norms.
Specialists in the field legal consulting provide assistance on all necessary legal issues (civil, administrative, housing, land, family, etc.). Assistance is provided in the drafting and conclusion of contracts, conduct in litigation, licensing issues. Full confidentiality of the appeal to consultants is guaranteed.
Investment consulting includes an analysis of fundraising and leasing strategies in the enterprise. In the first case, the search for an investor in a specific business project is carried out. Here, it is important to assess the investment opportunities of a business, taking into account the base of potential investors available in any reputable consulting firm. Leasing is associated with the acquisition or transfer of property to individuals or enterprises with the right of its further redemption.
To field of activity financial consulting include the search for the most effective financial strategy for the consulting firm. At the same time, all possible actions to optimize the financial system at the enterprise are taken into account, the search for profitable sources of financing and options for increasing the productivity indicator is carried out.
Management consulting, which is subdivided into marketing, strategic and personnel , seeks to offer the most effective scheme for managing the firm. The work model of a particular firm is analyzed, a comprehensive assessment of the state of the enterprise and its main goals is given, a management strategy and an anti-crisis program are developed in case of problems in the management sphere.
Small Business Consulting is a young and promising developing direction in the market of consulting services. A small start-up company needs advice from competent experts on business development, credit and investment policy, cost optimization and profit increase.
IT consulting is a relatively new but in-demand area of consulting. The range of issues includes: assistance in organizing an IT service at the enterprise, determining an automation strategy, creating a corporate information system and its further management.
Criteria for choosing a consulting firm
Since the services of consulting companies are of considerable importance in the development of their clients' business, and are also characterized by high cost, it is important to choose the right company that specializes in consulting services. In this case it's better give preference proven specialists with a solid experience in the service market, as well as those who have provided serious positive results in the business activities of their clients.
It should be understood that trustworthy consultants must not only provide their clients with all the necessary information services, but also ensure that the firm achieves a positive result in a particular business issue.
Exist certain criteria, allowing the most optimal approach to the choice of a consulting company:
- The length of the company's activities;
- Qualification of specialists, professional experience;
- Price of consulting services;