What is Consulting? Who Provides Such Services and Why?
Contents:
1. Consulting — what is it? What are its goals and objectives?
2. Types of consulting
3. Consulting methods
4. Consulting forms
5. How do consulting companies work?
6. Conclusion
The modern business environment forces entrepreneurs to solve many different tasks that are not directly related to their main activities. In particular, they have to deal with finance, personnel, accounting and legal issues, marketing and other business processes. It can be difficult for an uninitiated person to understand all the nuances of these areas, which negatively affects the company's work. The solution to this problem was consulting services for business, which we will discuss in this article.
Consulting — what is it? What are its goals and objectives?
Consulting is a B2B (business-to-business) service that consists in providing expert advice on various aspects of doing business.
In simple terms, consulting is the process of advising individual entrepreneurs and employees of companies (usually management) on legal, managerial, financial, personnel, investment and other issues.
Consulting services can be useful both for start-up entrepreneurs and for medium-sized or large companies. As their business grows, they have to face various challenges in various aspects of business activities. For example, it can be either any specific issues (hiring and personnel management, taxation, financial consulting, etc.), or assistance directly in business processes: prospects development, market analytics, investment attraction, etc. You may always employ registered agents to handle taxation and documentation so you can focus on growing your firm.
After reading this article, you will learn about what consulting means, why you need it, what types and forms of consulting exist, what consulting companies are and how they work.
While large businesses can afford to add relevant departments (financial, personnel, legal, etc.) to the staff, small companies and individual entrepreneurs do not have the ability to bear such costs. Of course, they can try to understand all these issues on their own, but the results in this case are often unsatisfactory. In addition, the dispersion of attention to secondary tasks has a negative impact on core business activities.
A more balanced and reasonable choice would be to seek advice from experts on the necessary issues. The purpose of consulting is to optimize business processes, solve development problems and improve the company's performance indicators: liquidity, profitability, profitability, market value, etc. concerns its tasks, among them may be the following:
- Development of a business plan;
- Development of a marketing strategy;
- Assistance in preparing a competent positioning of the company;
- Analysis of the market, niche, competitors, target audience, product, etc.;
- Optimization of relevant business processes;
- Optimizing the activities of sales, marketing, personnel, etc.;
- Organizing and conducting training seminars and trainings for staff;
- Preparation of a financial plan;
- Reduce costs and more.
Types of consulting
Previously, business consulting included only a few areas, the main of which were accounting and financial audit. Over time, the number of its species has increased markedly, and now it covers more than 10 different specializations. Next, we'll look at the main ones:
Management
It is also called general consulting, as its goal is a global overview of the business to identify and eliminate problems/imperfections/vulnerabilities, as well as optimize the company's activities as a whole and assessment of the potential for its further growth. Management consulting is often a large-scale SWOT analysis that allows you to obtain information about all relevant business processes and make effective decisions to improve them. It may include certain specific areas of consulting services: financial, personnel, legal, marketing, etc.
Legal
A very popular type of consulting, which belongs to specialized consulting services. Any entrepreneur or company in the course of its activity has to solve a number of issues in the field of law, and as the business develops, there are more and more of them. At the same time, the employment of a full-time lawyer will not always solve this problem, and sometimes it is more effective to seek help from a consulting company. Legal consulting services for businesses will help streamline documents and make cooperation with counterparties more transparent.
Financial
Financial consulting is a popular type of consulting services, during which experts help entrepreneurs create a reliable and effective financial management system. It consists of such activities as analyzing and auditing the financial situation of the company, consulting on budget planning, streamlining financial documentation, etc.
Bookkeeping
A common subtype of financial consulting, which includes advice on the formation of an accounting system, assistance in the preparation of accounting and tax reports, accounting in automated information systems, support for tax audits, etc. In addition, accounting consulting specialists provide assistance in matters of setting up and restoring records, advise on taxation issues (tax calculation, valuation of transactions, etc.). They also analyze and adjust tax reports, clarify regulatory documents and disputes in the field of accounting and taxation.
Personnel
HR consulting is another popular area of services provided by consulting companies. Experts analyze the company's corporate culture, search for and select candidates for open vacancies, advise management, conduct training and motivating trainings for staff. HR consulting may also include certification of HR managers and other specialists, personnel accounting and auditing, analysis of personnel policy and document flow, introduction of methods to increase productivity employees, etc.
IT consulting
IT consulting is becoming an increasingly popular type of consulting services. It helps companies to competently implement and use information technologies to optimize business processes. During this service, experts give recommendations on the creation, implementation and development of intra-corporate IT systems. In some cases, they also develop such complexes from scratch or offer ready-made solutions based on current goals, tasks, problems and business specialization. These include customer relationship management (CRM) systems, enterprise resource planning (ERP) systems, collaboration software (Groupware systems), information Networking systems (NIS systems) and much more. In addition, IT consulting includes an IT audit: a set of measures to assess the level of automation of business processes in the company.
Investment
Another important area of business consulting is investment consulting. Specialists of consulting companies help businesses choose the most profitable and/or low-risk investment options. On the other hand, they can also suggest effective ways to attract investment. Investment consulting services include not only finding and attracting investors and investment options. In addition, experts in this field help clients in the development of investment projects, act as intermediaries in interaction with credit institutions and insurance companies, and provide legal advice.
Consulting methods
To date, it is customary to distinguish three methods of providing consulting services in this area:
- Expert. One of the most common methods is that a company hires an expert with the specialization they need to find a problem and prepare a solution. The specialist analyzes the information provided to him and prepares recommendations in the form of an action plan. After that, the company's representatives independently implement the recommended solution and evaluate the result.
- Process. This consulting method for business differs from the expert method in that the consultant not only analyzes the problem and selects the optimal solution, but also participates in its implementation together with employees of the client company. The process method most often involves long-term cooperation, while the expert method can be a one-time short-term procedure.
- Teaching. This method of consulting services differs from the above in that experts do not look for a solution to the problem on their own, but train the company's employees to do so. In the process of training consulting, consultants provide clients with theoretical and practical information that helps them analyze work situations and find optimal solutions. Thus, its main goal is to train and improve the skills of personnel.
Consulting forms
If you want to get the most detailed answer to the question “what are consulting services”, we also recommend that you familiarize yourself with the current forms of marketing. These include:
- Consultations. Probably the most popular form of consulting, which is expert advice on finding the best solution to certain problems and tasks. Consulting services can be either one-time or regular.
- Analytics. Consulting in the form of analytics involves a deeper and more detailed study of the problem and specifics of the client's business. Based on the processed data set, the expert analyst forms hypotheses and selects the optimal solution.
- Forecasting. This form of consulting for business includes predictive modeling of situations and ways to solve urgent problems and tasks. Based on the forecast, the management of the client company can study possible ways of development and choose the most suitable one.
- Auditing. Consulting in the form of an audit implies that a consulting company conducts an audit of all or individual divisions of the client company, identifies existing shortcomings, problems and weaknesses, and gives recommendations for their elimination and optimization. Most often, an audit is carried out in the process of financial and accounting consulting, but it is also suitable for other types of it.
- Accompanying. This form of consulting is not a one-time event (such as a consultation or audit), but a complete turnkey support of the client's business. Thus, experts first analyze and audit business processes, find problems and solutions, and then help implement them and evaluate the results obtained.
How do consulting companies work?
A consulting agency or consulting company is a company whose employees have expert knowledge in the field of certain business processes and are ready to provide them to customers for piecework or a fixed fee. Many private specialists also work here, they can provide both general management and any specialized consulting services.
A consulting company can provide services to everyone (they are called external or independent) or work with a limited number of clients. In the second case, such firms are called internal, since they are most often a structural unit of a corporation or group of companies.
As for the process of cooperation between a consulting company and a client company, it consists of the following stages of work:
The first stage is introductory and preparatory. During the meeting, customer representatives talk about their goals and problems that they would like to solve with the help of consulting. They often fill out a brief for this purpose, and representatives of the consulting company present their capabilities and advantages.
After a preliminary interview, experts and clients conclude an agreement that specifies a detailed list of services provided, the obligations of both parties, terms of work performance, conditions early termination of the contract and other nuances.
At the third stage, specialists of the consulting company collect and analyze data about the client company and its business processes. This helps them identify existing problems and find solutions to them.
The fourth stage of cooperation is considered the main one, during which experts work to solve the identified problems and achieve the goals set by the customer. The action plan at this stage directly depends on the consulting method chosen: for example, in addition to finding solutions, specialists can implement them and train employees of the client company.
At the final stage, the experts of the consulting agency provide the customer with a report on the work done and jointly summarize the results of their cooperation. If all activities were carried out in accordance with the terms of the contract and the customer is satisfied with the result, then the companies make final financial calculations and complete the cooperation.
Conclusion
Consulting or business consulting is a popular area of B2B services, in which an individual expert or a group of experts provides recommendations to the client company on solving certain problems or optimization of business processes. Today, there are a number of types of consulting, including general (management), legal, financial, accounting, personnel, investment, IT consulting, etc.
There are also various consulting methods (expert, process, training) and forms of consulting (consultation, audit, analytics, etc.). A typical counseling process consists of a certain sequence of steps: it begins with filling out a brief and ends with summing up the results and calculations.
Do you want to achieve your business, career and life goals faster and better? Do this with Apix-Drive, a tool that removes a significant part of your workflow routine and frees up more time to achieve your goals. Test the capabilities of Apix-Drive for free — see for yourself the effectiveness of the tool.