Average price for Big-4s consultant starts from USD’150 per hour. It should be understood that this cost includes the experience of a giant company, the implementation of similar projects, and a large number of specializations within. For long projects, this amount may change downward a little, but the number of personnel involved, including support personnel, will increase. Also, you should be prepared for the fact that the final result will be different from what you want, because consultants are working strictly according to the terms of reference, and at the stage of setting the problem is difficult to provide all the nuances of future work.
One month of consultant work = 32k (20 days * 8 hours * $200). 3 consultants on a project a month long = $100k. This is the main reason why only large companies can afford to hire such expensive employees (and why many of these companies create their own departments of analysis, strategy and other support functions that are not directly related to business management, but actually duplicate consultants, being over the main processes, and analyzing the situation from the outside).
Spending money on consultants (or internal expertise) is perceived by top management as money wisely spent, because it allow companies to understand their position in the market, strengthens their competitive advantage, gives additional control over the business. The final product (hidden behind vague terminology) is usually some Excel calculations and Powerpoint presentations.
What about small business? Sometimes simple 3-statement financial model can get valuable insights. Sensitivity analysis can help to understand possible threats. Investment analysis helps to choose wisely new project to start. Working out details like taxes or compensations reveal ideas for optimization. Need some government grants for business development – show financial model. Budget model can help to predict cash flow gap and find financing in advance. Comparison of the actual numbers with the planned ones helps to understand omissions in the planning process. And last but not least – evaluation helps to calculate value of the business for sale or buy.
- Budgeting and Forecasting: Financial modeling helps small businesses create realistic budgets and forecasts, enabling them to plan for future expenses and revenue, and make informed decisions.
- Cash Flow Management: By analyzing cash inflows and outflows, financial modeling assists small businesses in maintaining adequate cash reserves and avoiding potential liquidity crises.
- Investment Decisions: Small businesses can use financial models to evaluate potential investments and assess their potential returns, ensuring wise allocation of limited resources.
- Business Valuation: Financial modeling allows small business owners to estimate the value of their company, aiding in potential sale negotiations or attracting investors.
- Risk Assessment: By incorporating various scenarios into the model, small businesses can assess potential risks and develop strategies to mitigate them effectively.
- Performance Analysis: Financial models provide insights into a company’s financial performance, helping identify areas for improvement and streamlining operations.
- Capital Raising: Having well-structured financial models can increase the chances of obtaining funding from banks or investors, as it demonstrates a thorough understanding of the business’s financial health.
- Strategic Planning: Financial modeling assists small businesses in creating long-term strategic plans, aligning financial goals with broader business objectives.
- Scenario Planning: Small businesses can use financial models to test different business strategies and assess their impact on financial outcomes, aiding in decision-making.
- Business Sustainability: By analyzing key financial metrics, small businesses can ensure their financial sustainability, making it more likely to endure economic downturns or market fluctuations.
We at MineDesign have extensive experience during long hours and years of work in corporations and consulting companies. We deliver almost any types of calculations, including advanced features as automation and add-ins development.