Management consulting is the practice of advising or guiding a business to improve its performance. When a business feels it has reached the bounds of its expertise, it may call in the advice and support of a management consulting firm whose skill set might expand the reach of the business. For example, if a business's profits have dropped, a management consultant may be hired to analyze the problem from a cost standpoint. The consultant then presents a company with one or more options in order to correct the problem.
Typically, the goal of any business is to increase its profits. This may be done through salary cutbacks, increased production efficiency, decreased waste, the addition of new products or services, or many other avenues. Sometimes an outside perspective is needed to properly analyze a business's performance in these areas. In such a case, a management consulting firm could be hired, and ideally would offer a solution based upon years of experience helping other clients achieve the same or similar goals.
Especially in the case of small or growing businesses, outside expertise can be an invaluable asset to a company. Management consultants can be independent proprietors or large firms with hundreds of employees and offices. They also can be hired and paid for by a company, or may simply be an unpaid friend, family member or colleague with a highly-developed skill set offering advice to a business owner.
Management consulting is usually billed at an hourly rate or per project. A creative business owner might negotiate a contract which pays based upon the performance of the consultant, however. For example, if the goal is to decrease costs, a management consultant might be paid a percentage of the cost savings it can produce through the implementation of presented ideas.
Any one of a number of college business classes can train a person in an area of business, but management consultants are usually hired and paid based upon their experience and performance. It is difficult to get a start as a management consultant without years of in-the-field experience and/or a variety of clients. The best way for someone to get started in management consulting is to work for a large consulting firm.
Typical areas of management consulting include cost analysis, streamlining employee benefit plans and instituting new procedures for the control of waste. Other areas include upgrading computer systems and implementing new technology. While a management consultant usually only advises a company on the best strategies for increasing performance, it is up to the company to implement those ideas.