Consultants talk their way up Profession can turn skillful managers into entrepreneurs.

August 19, 1991|By Michelle Singletary | Michelle Singletary,Evening Sun Staff

Maureen Ritcey says that when she grows up she wants to be a consultant -- just like her father. Then again, Maureen, 13, thinks she might want to train dolphins.

But her indecision doesn't bother Larry Ritcey. He's just proud that his daughter's career aspirations include his profession.

Ritcey, 49, is a self-employed management consultant.

Management consulting is fast becoming a way for experienced managers to become entrepreneurs, according to David A. Lord, managering editor of Consulting News, a trade publication in Fitzwilliam, N.H. Management consultants can earn a good living. The average billing rate is $1,000 a day, and consultants typically earn $100,000 a year before taxes.

"Generally somebody who had a good career in an industry can earn that kind of salary," Lord says.

However, 25 to 30 percent of a consultant's salary is used for such things as health and disability insurance, benefits that otherwise would be paid by an employer, according to Marc Young, an independent consultant whose company is called Transition Management Systems.

Lord estimates there are 80,000 individuals in the United States who make their living as independent consultants. Currently, the consulting industry, including independents and large firms, is a $12 billion industry, Lord says.

During the 1980s the consulting profession experienced a boom as companies began to look outside their corporate walls for professional advice, he says. There was a particular boom in management consulting in the areas of informational systems, human resources and budget managing.

By the end of the 1980s, as the recession began to take hold, companies found the need to downsize and middle managers found themselves out of work. It is those managers who increasingly now see consulting as a way to earn similar salaries and become their own bosses.

Between 1984 and 1989 the industry saw a growth of 18 percent, according to Robert Gannon, director of education and research for the Council of Consulting Organizations, in New York.

Gannon says the hot area for the 1990s is going to be health-care consulting.

"Right now a lot of companies don't have the in-house resources and they want an outside opinion," he says.

While starting a consulting business doesn't involve a lot of up-front costs, less than $10,000, success rests on being good at what you do.

Young says that, while he contracts himself out to do management training, he also found a niche by offering to write proposals, workbooks and manuals for other consultants. His wife, Judy, has started a firm called Young/Murphy Associates, which serves as a broker for consultants. They work out of their Columbia home.

"It's a never-ending hustle," Marc Young says. "Being a consultant is by no means a ticket to a life on the beach."

Young, who has a master's degree in human resource development from American University and National Training Laboratories, got his experience while working for a hospital in Washington, D.C., and Lockheed Engineering and Management Services Co.

Young says it was when he lost his job with Lockheed because a contract ran out that he decided to hang out his consultant shingle.

"For many people you have to wake up in the morning and decide if you are an unemployed job seeker, or whether you are a consultant just starting your practice with a day of marketing ahead of you," he says. "Your practice starts with that decision because there is no board that says you are or aren't a consultant."

There is a national organization that certifies consultants, but the process is not mandatory or often required by potential clients, Young says.

The Council for Consulting Organizations offers a designation of certified management consultant. To qualify, an individual must have at least five years of experience, pass an ethics exam, submit summaries of consulting jobs performed and answer questions from a panel of experts. The certification costs about $250.

On the surface, it may be easy to start a consulting business; however, it's not so easy to become a professional at it.

"Fewer than 50 percent of the people that venture out on their own last more than five years," Lord says. The reasons, he says, are poor marketing and not enough expertise.

Young started his consulting business in 1986. It took six months before he got his first consulting contract. In the meantime, he delivered pizza for Domino's.

"While being a pizza delivery guy had real status with my kids' friends in first grade, I felt like I had fallen off the ends of the Earth," he says.

Young declines to reveal his yearly salary but says he charges, on average, $700 to $800 a day for management consulting and $500 a day for his writing services.

In 1985, Ritcey formed his own consulting business, which is now called Ritcey and O'Loan Associates.

He works with his wife, Sarah, who gives presentations and seminars on personality, values and attitudes.

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