Management consultancy is a huge industry in the UK – and it can be a great opportunity if you’re an entrepreneurial business expert looking to work for yourself.
Starting a management consultancy business can seem daunting, but there are some simple steps you can take to make the process as easy and productive as possible.
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What is a management consultant?
Management consultants are brought in by businesses either to solve specific problems, or to improve efficiency. The profession has a bad reputation in some people’s minds because they assume it means that a third party comes in and recommends redundancies.
However, this isn’t the whole picture – a good management consultant will be able to advise on a range of issues or problems facing their client’s business, and to help the organisation reach the next stage of its growth.
The day-to-day work of a management consultant can vary wildly, and every client’s needs will be different. However, some of your core work is likely to include:
- Meeting with clients, understanding their business and its needs
- Researching your clients’ existing organisations
- Conducting interviews with key employees, both at management and entry level
- Collecting, managing, and understanding potentially large amounts of data about your clients’ businesses
- Identifying problems or bottlenecks in the businesses – often ones your clients haven’t spotted
- Modeling what might happen if different changes are made, again relying on data
- Presenting recommendations to the client based on your findings
- Continuing to provide ongoing support to clients as needed
How much do management consultants earn a year in the UK?
Management consultancy salaries in the UK vary significantly by experience, and vary again according to whether you’re an employee or working for yourself. The starting salary for a junior management consultant is around £25,000. However, experienced management consultants, and especially those that specialise in in-demand areas, can earn around £90,000 – or even significantly more.
How to start a management consultancy business – step by step
Now that you know what a management consultant does, and how much they earn, you might want to get started with your own management consultancy business. We’ve compiled a step-by-step guide to get you started.
1. Get the right qualifications
Management consultancy requires a high level of business acumen, and for this you’re likely to need a degree in business or a similar field. Many management consultants have post-graduate qualifications, such as an MBA.
There’s a dedicated professional body for the consulting industry. The Institute of Consulting offers a range of professional qualifications, and serves as the accrediting body for management consultants in the UK. Read more about the qualifications they offer here.
Just as important is your experience. You’ll need extensive, demonstrable experience in areas like finance, project management, HR, or IT. Many self-employed management consultants have already spent time in a conventional, salaried position.
Some management consultants even used to be in the armed forces, using skills they learned there in civilian life.
You also need to be extremely computer literate, and happy working with numbers. Finally, you’ll need to be a people person.
2. Sort out the legal side
There are some important legal considerations when starting your management consultancy business.
- You need to choose a legal structure. Will you operate as a sole trader, a limited company, or a limited liability partnership with somebody else? Read more about choosing a legal structure.
- You’ll pay your own tax through Self Assessment. You need to register for tax with HMRC, and you may also need to register for VAT. Read more about registering a new company with HMRC.
- Although it’s not a legal requirement, you should think about writing a business plan. This document will help to structure your business and its growth, and is the ‘bible’ against which you will benchmark your progress. Read our comprehensive guide to writing a business plan.
3. Think about insurance
Insurance is important for management consultants. Your clients will trust your advice, and even the best consultants sometimes make mistakes.
If a mistake causes financial loss to your client, you’ll likely be liable – and the claims arising from such mistakes can be huge.
Professional indemnity insurance can protect you against those claims. It covers businesses that give professional advice, and is a key cover for management consultants.
Given that you’ll likely be working on clients’ premises at points, you should also think about public liability insurance. This can protect you against claims arising from injury or loss suffered by a member of the public in the course of your work.
If you employ anyone in your management consultancy business, even on a casual or part-time basis, you’ll also need employers’ liability insurance. The fines for not taking out employers’ liability can be very steep, and you’ll be fined for every day you don’t have it.
4. Find clients
Now that your management consultancy business is set up, it’s time to start looking for work. First, you should think back to the Institute of Consulting. They offer a directory of accredited management consultants that prospective clients can search, and this can be a key way of securing work.
More generally, think about your own specialisms. What unique knowledge do you have in the consulting space, or what can you do better than anyone else? Management consultancy in the UK is dominated by a small number of large players, but there is always call for specialists – ones who are approachable and easy to deal with. Identify what you do best (or differently), and build your marketing around that.
More practically, many management consultants secure their first few clients through their existing networks. If you’re a right fit for the job, it’s likely that you’ll have a decent number of contacts in business who you may be able to leverage to get you off the ground.
5. Grow your management consultancy business
The scope for growing a management consultancy business is very significant. The success of the consulting giants shows just how much appetite there is for experts, and if you can offer a great, valuable service, there’s no reason why you can’t expand your business too.
Again, a key thing to remember when growing your consulting business is the client relations side of the job. The consulting industry is full of people who are very skilled in specific disciplines. What many of these consultants lack is the ability to service clients on a day-to-day basis.
This means that you’ll need to be spot on when it comes to presenting, pitching, and offering recommendations, whether your clients are big or small.
How are you getting on with setting up your own management consultancy business? Let us know in the comments below.