Welcome

Management consulting is a growing, lucrative business for the small business entrepreneur. Annual industry sales estimate range between $130B and $150B. With the current growth in the number of small business firms, consultants have an expanding base of potential customers.

What defines and separates a consultant from others in the field is the experience and wisdom that is applicable to a specialized field. Typical across-the-board business needs include legal, human resource, marketing, financial and technological expertise. While these are general business processes, consulting needs also include specialized fields ranging from accounting to wills/succession planning.

According to the Bureau of Labor Statistics:

• - 25% of consulting firms are classified as non-employers (or self-employed)
• - over 80% of consulting firms have 1-4 employees

Flexible schedules and choice of projects are usually touted as advantages for the self-employed consultant. However, there are other considerations: 1) changing pay schedules; 2) marketing and self-promotion; 3) financial preparation for healthcare and retirement costs; and 4) working independently. These are all critical evaluation points before deciding to venture into this line of business.

Gloria J. Allen

Industry Snapshot: Management Consulting

Take a look at our full industry report on Management Consulting Services (PDF Format). If you are interested in other industry snapshots, visit our SBDC Counselors Toolkit.

Links of Interest

Consulting Magazine

Independent Computer Consultants Association

Investment Management Consultant Association

Society for Human Resource Management

National Association of Tax Consultants

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Peter C. Morales

Are You Paying Attention to
Demographic Trends?

Revenues of $27 Billion by American Indian and Alaska Native Businesses

According to the U.S. Census June 20 report, the Survey of Business Owners: American Indian-and Alaska Native-Owned Firms: 2002 , stated that 201,387 businesses were Native-Owned and had gross sales of $26.9 billion. The businesses owned by an American Indian tribal entity were not included in this particular survey as they were in the 1997 survey. The industries best represented by these Native-owners included:

• - construction (32,253)
• - other services (26,651)
• - health care and social assistance (24,428)
• - professional, scientific, and technical services (22,505)
• - retail trade (20,494)

For every 10 Native-owned businesses, 3 were in construction or other services (repair, maintenance or personal services).

Since the Los Angeles-Long Beach-Riverside, California was home to most of the businesses (20,380), Los Angeles County is credited with the most firms (13,061). California leads the top 5 states in Native-owned firms followed by Oklahoma , Texas , New York , and Florida respectively.

The research also showed that 1 out of 8 firms, or 24,498 businesses, have 191,270 employees. It is notable that 3,631 businesses had earnings of $1 million or more. Only 178 Native-owned firms currently employ 100 or more yet are responsible for gross sales of $5.3 billion or ¼ of the total revenue earned. Those 176,889 firms (without employees) averaged individual earnings of $27,623, but represent a respectable $4.9 billion to invest in their business or the economic development of their community.

For more details see: http://www.census.gov/Press-Release/www/releases/archives/business_ownership/007013.html

Judith Johnson

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