Consulting is appealing because of its apparent glamor. Many consultants travel the world for business dinners and client meetings, making it an engaging profession.
It is important to consider the financial side of any profession. If you’re thinking about becoming a consultant, it can be a lucrative career path in addition to being interesting and unpredictable.
What Are a Consultant’s Responsibilities?
Your consultant work will vary based on your area of specialization. Some of the most in-demand fields include IT, Management, Business, and Environmental. Consulting generally involves examining an organization’s current outlook and identifying areas for improvement.
Being a consultant is all about effective problem-solving. Your work with a client can last from weeks to years depending on their needs. In order to provide valuable insights, a consultant needs to be an expert in the field.
What Types of Consultants are There?
Information Technology (IT)
IT Consultants have been in high demand for over twenty years. They are key for the modern economy, which relies on automation. Businesses in every sector rely on information technology. These are some common subfields within IT:
- Cyber Security
- Sap Security
- Software Implementation
- Senior Lync
While Management Consultants can help companies in many ways, they’re often needed when a business expands or adjusts operations. The majority of Management Consultants work in one of these areas:
- Senior Risk Control
- Change Management
- Project Management
- Politics and Political Campaigns
American environmental regulations at both the federal and state levels have become more restrictive in the last few decades. This has forced businesses to consider how their operations affect the world. Environmental Consultants help clients become more eco-friendly. They can work in:
- Environmental Project Management
- Environmental Air Quality
- Environmental Auditing
Business Consultants specialize in addressing the weaknesses of their clients. Some common specializations for Business Consultants include:
- Human Resources
- Customer Service
How Much Does the Average Consultant Make?
According to SalaryList, Consultant salaries typically fall between $30,451 and $944,000, with a median of $79,300 (SalaryList, 2017). Like other fields, a Consultant’s earnings depend on a range of factors, such as specialization, experience, certifications, and location.
Consultants who work for firms often have benefits including profit sharing, bonuses, commissions, and insurance. These can be extremely valuable–the average compensation package for a Management Consultant is worth $105,964 per year (PayScale, 2018).
Here are some numbers you should know as a Consultant:
- Average Gross Annual Salary = $84,960
- Average Bonus = $7,670
- Average Profit Sharing = $3,933
- Average Commission = $8,139
How Can I Increase My Income as a Consultant?
If you’re working as part of a Consulting firm, your compensation will likely be determined by your position on the internal ladder, making it relatively predictable. By contrast, Consultants working on their own have a higher level of control over their income and can increase it in a variety of ways.
Building an Online Presence
The internet has changed the world of marketing and leveraging social media and other platforms can have a substantial impact on your earnings. By improving your online outreach, you’ll be able to gain more clients and increase your income.
There are countless examples of valuable content to provide your viewers, including websites, blog posts, Facebook posts, videos, e-books, and articles. In addition to getting more exposure to new clients, you’ll also establish yourself as an expert, improving your reputation within your industry.
Look for Referrals
Every project you’ve already completed is a testament to your skills and capabilities as a Consultant and it can also be a way to find new clients. Don’t be afraid to get in touch with those you’ve worked with to see if they know others who could be interested in your services.
Focus on Networking
In addition to finding connections through former clients, you should also try to look for new clients on your own. Whenever you can, try to participate in things like professional associations, conferences, workshops, and lectures. This will help you get your name out there, and you may even be paid for your contributions.
Protecting Your Brand and Income as a Consultant
As a Consultant, Part of your job is to protect your clients from potential threats, but are you doing the same thing for your own business? Consultant’s insurance is the most cost-effective way of keeping you and your practice safe in the event of litigation.
Why Do I Need Consultant’s Insurance?
A Commercial General Liability insurance plan will protect you from common third-party injury and property damage claims, but it’s not enough on its own. Professional (Errors & Omissions) Liability insurance is an important layer of defense for any Consultant.
Professional Liability insurance will protect you in case of clients claiming that you misled them, withheld important information, provided bad information/advice, or simply didn’t perform effectively. You can learn more about these policies here.
How Much Does Consultant’s Insurance Cost?
In general, a Consultant’s insurance plan will cover between $1,000,000 and $2,000,000 in damages. The right amount of coverage for you will depend on your specific practice and risks. While premiums can vary, you should expect to pay somewhere between $1,000 and $3,000 annually.
Whether they work in Management, IT, or Business Consulting, all Consultants face significant risks along with financial opportunity. However, even the best Consultant can face massive penalties for a single mistake. Purchasing a Professional Liability insurance policy will protect you and your business from any legal fees, settlements, or verdicts that arise.