What Is a Consultancy Firm? (How to Start One in Six Steps)

By Indeed Editorial Team

Updated June 16, 2022

Published January 3, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you're an expert in your field, you may want to consider starting a consultancy firm. A consultancy firm has consulting employees who offer their advice and guidance to individuals or organizations. Knowing more about what a consultancy firm is can help you determine whether starting one is the right career path for you. In this article, we answer the question, "What is a consultancy firm?", discuss the different types of consultancy firms, and tell you how to start one.

What is a consultancy firm?

Learning the answer to the question, "What is a consultancy firm?" can be beneficial to your career. A consultancy firm, or consulting firm, has consulting professionals who feedback, advice, or actionable strategies to businesses or individuals. A consultant's goal is to improve a company's efficiency or effectiveness, often helping to increase certain metrics, such as revenue, customer engagement, or employee satisfaction. Consultants can work in any field, such as health care, technology, or finance. Consultancy firms typically focus on one industry to ensure they can provide targeted, expert advice.

Types of consultancy firms

As most industries can benefit from a consultant's advice, there are many types of consultancy firms. Here are some of the common ones:

Information technology

As the information technology (IT) industry is constantly changing, IT consultancy firms tend to be very popular. Professionals at an IT consulting firm may complete the following responsibilities:

help clients improve efficiency with new technology
attract more clients for the company to grow the business
develop more efficient processes within the client's budget
offer advice on specific projects
test the company's current systems and offer suggestions for improvement
develop training materials for new employees
offer training sessions to existing employees
review the company's data for trends, patterns, or areas of improvement
remove viruses or other digital anomalies
set up routine scans to help the company stay virus-free

Marketing

Another industry that's also constantly changing is marketing. Professionals typically update their marketing knowledge regularly as new platforms and marketing techniques are always coming out. To do this, a company may hire a marketing consultancy firm, which handles the following responsibilities:

assess the company's past and current marketing strategies
identify the company's target audience and goals
produce marketing campaigns for their target audiences
design marketing materials
post marketing material online, such as on a website or social media platforms
help the company establish its brand
create or update the company's tagline and vision
create search engine optimization (SEO) strategies so the company can grow its audience
create or update digital content using SEO strategies

Finance or investment

Finance or investment consultancy firms help companies determine how they can use their resources efficiently. Here are some of the responsibilities professionals at an investment consultancy firm may have:

develop a plan for the company that allows them to reach their financial goals
identify financial risks the company has and reduce them
compare the company's finances to its competitors
assess and update the company's budget
cut unnecessary expenditures
develop a savings plan or a plan to pay off existing debt
suggest investments that can benefit the company
organize receipts, invoices, and other financial documents
offer financial training

Management

Although managers are often experts in their industry as well, many companies can benefit from hiring a management consultancy firm. Management consultants can work in any industry, helping employees become better leaders. Here are some of the responsibilities they have to complete this task:

create achievable goals for the company
offer management training to new and existing employees
meet with the CEO to help them make important decisions
build company culture
complete a profit margin analysis
develop strategies to improve the company's productivity and increase revenue
meet with department managers to implement strategies that help them reach company goals

Human resources (HR)

As smaller companies may not have a designated human resources department, human resources consultancy firms can help. A business may work with an HR consultancy firm on a regular basis to ensure they're following the appropriate regulations. Here are some of the responsibilities an HR consultancy firm may have:

create job descriptions and applications to attract new candidates
screen and interview candidates
meet with the management team to review the most qualified candidates
offer advice for motivating employees and increasing satisfaction
create a positive company culture
create human resources policies and procedures or update current ones
help managers terminate employees respectfully
create employment contracts that adhere to national, provincial, and territorial labour laws

Engineering

Engineering consultancy firms are made up of current engineers that can offer companies specific advice or help. Engineering firms typically specialize in a certain area of engineering, such as construction or software. Regardless of the industry, here are some of an engineering consultant's typical responsibilities:

assess a client's needs for a project and help them throughout the planning stage to completion
create a budget and plan for upcoming projects
help a company design an entire project or a component of it
organize project logistics, such as purchasing the necessary inventory
help companies prepare documentation, such as a report outlining the project's progress
analyze a company's existing plan for ways to improve it

Healthcare

Healthcare consultancy firms specialize in management practices in the healthcare industry. They typically choose a specific area of healthcare, such as medical technology or pharmaceuticals. Here are some of the responsibilities healthcare consultancy firms have:

provide insight into the best practices for a positive patient experience
help medical facilities maintain job security
find ways to reduce costs while still offering excellent healthcare services
suggest new medical technology to help teams work more efficiently
improve organizational competency for hospitals, doctor's offices, or other medical facilities
help healthcare facilities manage their relationships with external organizations, such as insurance companies or medical equipment companies

Politics

Political consulting firms work with individuals who want a career in politics. Political consultants are experts in current events so they can offer the best advice to candidates trying to reach a large audience. They typically take on multiple roles, such as public relations specialists and managers. Here are some of their main responsibilities:

create marketing content to increase awareness of the political candidate and their platform
develop and improve the candidate's platform
perform research to determine how well the candidate is doing in the polls against their opposition
plan campaign strategies
coordinate campaign employees by assigning roles and tasks
arrange events to publicize the candidate
write press releases
create and implement a campaign budget

How to start a consultancy firm

If you want to start your own consultancy firm, here are the steps you can take to do so:

1. Assess your skill set and expertise

Start by assessing your current skill set and determining your area of expertise. Clients want a consultant who's an expert in their field, so if you don't have the necessary knowledge or experience yet, consider pursuing further education or training opportunities. Working for an established consultancy firm is a great way to gain relevant experience.

2. Establish yourself in the industry

Along with the relevant experience and knowledge, it can be beneficial to possess a positive reputation in the industry to start your consultancy firm. This can attract more clients and help you build your brand. Working with clients at an existing firm or networking are great ways to establish yourself in the industry.

3. Perform market research

To further help you determine what type of consultancy firm you can open, perform market research. Assess what consultancy firms already exist in your industry. This allows you to determine what competition you may have, which consultancy firms have been successful, and what your local market is lacking. If there are a lot of consultancy firms in your area with the niche you're interested in, it may be better to consider a different niche to target a new audience.

4. Start part-time

Rather than leaving your current job, it may be better to start your consultancy firm part-time. This ensures you still have a stream of income while starting your firm as you grow your client base. Once you have a steady amount of clients, you can focus on the firm full-time.

6. Hire employees

After some time, your client base may grow large. This is the time to hire a team of trusted employees. Look for employees that share the same expertise and passion as you so they can offer your clients excellent service.