Career Research Report: Accounting and Finance Consultant

[Thanks to NE for sharing career research on becoming a business consultant in accounting and finance.]

The career I chose to research is business consulting. Specifically, consulting in the accounting and finance industry. The reason I chose this career is because I have spent the last 11 years working in accounting and finance and want to start my own business.

Working in the corporate world, I have a stable check and regular work every week. Starting my own business would give me a sense of pride knowing my own work is being judged, and my business will grow based on my success. No matter how much I may succeed in my regular job, I can’t double my income that year, which is possible in business consulting.

I am somewhat interested in this path as my alternative is to move up the corporate ladder and be an executive. Right now I’m 75% leaning towards the corporate ladder route because I am married, have one son, and we anticipate having another child in the future.

Due to my family situation, the corporate ladder route is more stable and predictable. Also, if I were to get 10 more years of experience and network more, this would be a better starting point for my consulting business versus now, due to additional savings and experience gained.

I know probably 50% of what I need to know about consulting. I’m aware of the work involved as I’ve been doing it for 11 years in various capacities as a financial analyst to finance manager.

The 50% I need to learn is to be able to market myself and close deals for myself. I am aware of the basic principles of how to sell your skills but haven’t actually implemented it in a real world setting. Once I’m able to close a deal and work on an assignment I feel I can contribute immediately and add value-added services ranging from financial analysis, reconciliations, to financial modeling.

Job Description

My career of small business consulting consists primarily of three main tasks:

• manage the business operations
• market and close deals
• work on projects through completion

Being successful at all three components are critical to growing my business. The main premise behind small business consulting is to provide a business service to my clients in financial reporting, analysis, modeling and process improvement.

A service engagement can last between two weeks to six months, and I would charge per hour for my service. During this engagement, I would market myself to new opportunities at that company or another company. I would present my skill set and what value I can provide to the new client.

Marketing would occur on social networking websites including Facebook, Twitter and Linkedin. I would also have my own personal website describing my experience and service.

I would continue this cycle, grow my business and potentially hire people to consult as well.

Managing the business operations consists of:

• setup of the business
• legal requirements
• financial requirements

Setup of business includes identifying a name, setting up a primary office, website and the business plan. My primary office will be my home office. I would need a computer, phone and fax. The name of my consulting company will be first and last time followed by Consulting. My business plan will include components for what my business is, how I will make money, when I will start it and my overall vision/mission. It will also include the financial, legal, marketing and timeline aspects of the business (1).

Regarding the legal component of a business, I’d look into whether to incorporate as a sole proprietorship or a limited liability company. Both have advantages and disadvantages based on the specific structure of the business, so I’d need to do more research. To start any business you need money for various startup and maintenance of the business (2). I’ve listed out startup costs and estimated annual costs to maintain the business below:

• Annual Incorporation Fee: $200
• Website Fees: $100
• Marketing Fees: $200
• Computer and Internet Service: $1500
• Total Initial Costs: $2000

Fortunately, starting this particular consulting business does not entail large financing from a bank, and I can utilize savings already at hand. From a tax standpoint, I need to keep records of expenses in order to pay the appropriate business taxes assessed at the federal and state level. Being a CPA, I’m familiar with filing taxes and do not need to pay an accountant to manage my annual taxes or financial statements.

The next big step in running a successful business is marketing and closing deals. This entails:

• networking with contacts
• marketing my services to the public
• closing deals based on appropriate pricing

The networking of contacts will incorporate several avenues including online social websites, re-connecting with prior co-workers, advertising in various mediums and developing a website summarizing my services. The goal is to differentiate my skill set from the rest of the consultants. Initially, I’d price my services slightly below established consultants although having an MBA and CPA provides brand-name recognition of my competency. After a few years of consulting I would raise my rate to align with my experience and brand value.

After I am able to market myself and close deals, an important part of the assignment is to actually do the work!

Given that I’ve been working for 11 years in finance and accounting, I have been able to hone my skills over a decade. Since the plan is 5 years away, I’d continue to broaden my skill set to keep up to date and continually learn.

Once on an assignment I would ensure I put in 100% effort to provide value-added service in the form of financial reporting, analysis, developing models and providing guidance to my employer. Hopefully, I would do a great job where they would continue employing me to work on newer projects and be a reference for future projects.

Work Environment

The work environment is a corporate professional environment where regular business communication occurs. Typically this involves dressing business casual, no gossiping, and being social and cordial to fit in appropriately. It is typically eight hours with one hour of lunch. The work setting is in a corporate building setting in a cubicle working on the computer completing assignments and attending meetings.

Skills

The essential personal characteristics and skills include a broad range from organizational skills, selling skills, planning, strategy, and core accounting and finance skills.

The marketing and selling skills are always utilized from getting the assignment to working during the assignment. You are always judged, and you must always act professionally. The accounting and finance skills entail understanding intermediate-level accounting and finance theory.

It is also critical to incorporate this knowledge in completing tasks that involve analysis, interpersonal communication, organization, and influencing others. Most important is to program myself for success by affirming positive thoughts, such as I am assertive, I am self-confident and I visualize success (3).

Education and Training

The typical training involved at a minimum is a bachelor’s degree in accounting, finance or other business-related background. The more education completed the higher the likelihood of obtaining assignments as some companies prefer higher-level consultants.

Higher education includes a Master’s degree in Business Administration or Accounting. Complementing this would be other certifications, including the Certified Public Accountant, Certified Management Accountant or Chartered Financial Analyst certifications (4).

Earnings

The typical hourly earnings can range based on several variables including the experience of the consultant, the type of work the company needs help with, and the negotiation involved.

For my level with 15 years experience (5 years from now) my range would be $75 to $150 per hour based on an intermediate-level range of finance and accounting activities (5).

Compared to the market, companies offer this serve for $100 – $200 per hour due to several consulting companies having brand-name recognition and higher overhead costs.

Professional Associations

There are several professional associations which may help with networking, such as the Institute of Management Accountants and Society of Certified Public Accountants. These contain usually 15-30 active members in each regional club, such as San Jose. They often host workshops to teach more about the industry and processes. Usually there are fees of $100 each year. Also, there are a lot of business owners to network with.

Reflection

Overall this plan is for 5-10 years from now due to my family situation and current career location. With my family situation, we have a good amount of money saved, but to start a small business consultant company would entail some more savings since starting a business is riskier than the stable full-time job.

Another component with my family is the intent to try for another child within the next two years. My wife would subsequently stay home for two years where I would need to have a stable job. Also, when she returns we’d need to save some of the money we spent from her lost income. We’re looking to upgrade to a bigger house in three years now that there may be four of us in the household. We would then save for another few years which would bring this plan to years 5 through 10.

From a career standpoint, I have been working 12 years and am at a manager level. I would like to get to over 15 years to round out my experience further, including learning new systems and processes that will broaden my skill set.

Also, over the next few years I can continue networking and marketing myself to start my business down the road.

The overall economy also plays a role as the last year and the next two years appear to be slow for job seekers.

Therefore, it is important for me to remain in my current situation and ride out the storm. When the job market cycles back to a job seeker’s market, then I may start pursuing opportunities that open up.

What I’ve learned from researching this is the enormous effort one must put in to run a small business. Although the income will be less with long hours initially, there are the higher long-term earnings potential which is really exciting!

Also, running a business entails a full range of business skills, from marketing to finance, in order to run it successfully. Overall, this exercise was a worthwhile exercise which opened my eyes to the ups and downs of being my own boss!

My overall interest level is higher now than before completing this career research report. I would say it’s at a 50% interest level as I’m aware of the large obstacles involved to run a business more but am more confident that I can do it given more information.

This is a longer term plan, 5-10 years out, and if I can take steps each year towards this opportunity, then my interest level will increase due to the higher confidence that I can do it. Definitely writing this down and planning does move me closer, which I’m thankful for!

I can stick to the corporate route, and I’m halfway there having started at entry-level and now at management level in 11 years. It’ll probably take 5-10 years to get to executive level, at which point I can evaluate how reasonable it is to start on my own versus giving up that executive salary. By then I may seek this small business consulting opportunity to keep me challenged instead of dealing with the office politics!

References

1. Weiss, Alan. (2009). Getting Started in Consulting: Wiley
2. Webber, Amanda. (2009). StartupNation.com – Estimating Startup Costs for a New Business. Retrieved May 29, 2009, from http://www.startupnation.com/articles/1248/1/startup-costs-new-business.asp
3. Sukiennik, Diane. (2009). The Career Fitness Program – Exercising your Options: Pearson Prentice Hall
4. Bureau of Labor Statistics – Occupational Outlook Handbook, 2008-2009 Edition – Retrieved May 29, 2009, from http://www.bls.gov/oco/ocos010.htm
5. Salary.com – Retrieved May 29, 2009, from http://www.salary.com