When you ask someone what they do for a living nowadays, it’s hardly surprising if reveal they’re a consultant. It’s a rather broad term for a person who provides advice to others on a professional level. And the prevalence of this role is on the rise. In 2015, U.S. companies spent $54.7 billion on consulting. Just three years earlier, spending on consulting was only $44 billion. It’s evident that companies are increasingly turning to consultants for financial, operational and technological advice—especially when every dollar counts in a competitive economy.
So, what does it take to become a consultant these days? In short: it requires the right mix of experience, qualification and financial protection (like business insurance for consultants). Here’s a closer look from CoverHound.
Many Routes to Consulting
There’s truly no singular path to becoming a consultant. Some people find, after working within a certain industry for years, that they would rather act as a consultant for others within the industry—and have the skillset to do so. Recent graduates with a degree in business, finance, technology, healthcare, communications or another field may jump right into consulting based on the strength of their education alone. Some consultants choose to join a firm, while others opt for self-employment.
There’s no one-size-fits-all formula for consulting. The most important thing is for people to first ask themselves, “Am I qualified to become a consultant?” Being able to demonstrate your skillset and past experience will go a long way in securing client contracts.
Different industries call for different backgrounds. For example, according to the U.S. Bureau of Labor Statistics, the standard entry-level education level for a management consultant (someone who advises companies on streamlining operations by cutting costs and boosting revenue) is a bachelor’s degree, but people can add a Certified Management Consulting (CMC) designation for a competitive edge in the hiring process. Some businesses may prefer to work with consultants who have a master’s degree or a certain threshold of experience—it all depends on the industry, role and budget.
Working as a consultant (especially a self-employed one) within a highly specialized field often calls for additional accreditation. As Chron writes, “Consultants working in particular fields, including health care management or engineering, may also require industry certification before qualifying for their business licenses.”
As a consultant, you directly impact your clients’ financial success. If something unforeseen causes them to lose money while pursuing your advice, they may hold you accountable. This is why it’s so important for both parties to agree upon and sign thorough contracts—complete with names, timelines, scope of work and payments. A well-written contract is the first line of defense against a working relationship gone sour, whether it involves client non-payment or faulty advice on your end.
If a dispute does arise, a business insurance policy for consultants including professional liability insurance will handle the cost of legal defense and damages up to its limit. Find an affordable policy using CoverHound’s easy comparison tool today!