If you are small or medium enterprise (SME) looking to grow your business or improve your processes, you might consider engaging a management consultant. One of the main questions you would likely have is “what is the cost of a business consultant in Singapore for SMEs?”
That question is tough to answer in absolute terms. Depending on the experience, expertise and demand of the consultant, fees can run from a few thousand dollars to several hundred thousand dollars. Obviously, that is of no help. So understanding the consulting process is a good start.
INITIAL CONSULTING STUDY AND REVIEW
After the initial contact and meeting with the consultant, the consultant will understand what you, the client, would like to achieve and what specific area he can offer value in.
There will a preliminary problem analysis, and typically, the broad scope of the consulting project is identified.
Depending on the scale of a project, a larger more complex project will require a comprehensive study and review by the consultant or consulting team.
The purpose of the study and review is better to understand the company, industry, market and competition as well as identify issues and prioritize solutions to problems. Or, it could be a feasibility and viability study on whether to proceed with the project itself.
Depending on the scope of the study and review, you can expect to pay for it because of the amount of work and time it takes to do a comprehensive study and generate a review report presentation.
Some consultants might propose to do this study & review as part of the project itself.
For example, if you are engaging a business consultant to assist in strategic marketing and branding, the study and review process or phase of the project will likely involve:
Assuming a consultant is available, this process can take anywhere from 7 to 60 working days to conduct the study and create the review report/ presentation; depending on the size of your business and scope that the consultant has to cover.
Most projects my team takes on typically require 14 – 30 man-days of research.
If you are hiring a top-tier firm like one of the Big 3 strategy firms, you can expect to pay tens of thousands or even hundreds of thousands of dollars for a study and review.
For a boutique firm, you can expect to pay a few thousand dollars for a study and review. This fee is generally a fixed cost and not a per-hour charge.
GRANT FUNDING FOR STUDY AND REVIEW
For Singapore companies, the Enterprise Development Grant (EDG) is available to provide up to 80% of funding support for a study & review project.
The grant will specifically cover:
- Diagnosis and gap analysis of your company
- Assessment of internal and external factors, such as strengths and weaknesses, and competition
- Primary or secondary research
You can read more about how to apply for the EDG and what it covers here.
HIRING THE BUSINESS CONSULTANT
Regardless of whether the initial study and review is a stand-alone project or part of a consulting project, the consultant should present a proposal or review report that offers an initial hypothesis and proposed action plan to achieve the objectives.
The consultant should also highlight and explain the KPIs and metrics employed to measure the KPIs. The proposal will also give indicative costs to achieve the business objective.
The fee to achieve the objective depends on many factors.
- The Complexity of the Project
- Scope of the Project
- Size of the Business
- Duration of Engagement
Typically, a good consultant will recommend you to start with a smaller specific project that will have the most positive impact in a relatively short time (around 3 – 6 months). This is enough time for a proper diagnosis to be performed, proposed solutions to be implemented, measured and reviewed.
Subsequently, a larger project with a scope that covers 12 – 18 months can be embarked upon.
HOW A BUSINESS CONSULTANT'S FEE IS CALCULATED
Based on the above example, most consultants will propose an estimated time (number of hours/ days/ weeks) that it will take to complete the project.
Most consultants will charge by the hour. The cost of a business consultant in Singapore depends on the experience and credentials of the consultant and whether it is one consultant working on the project or a team.
As a guide, in the U.S., small business consulting fees range from US$95 to US$1,500 a day, with an average cost of US$399. The hourly cost of consulting fees range from about US$45 to US$150 per hour. The rates in Singapore are similar if your convert them to SGD.
So, if a consultant charges $150 an hour and spends 30 hours a week working on your project, the fee per week would be $4500 or $18,000 a month.
You can also negotiate with the consultant and give an indicative budget for the project. Based on your budget, the consultant may limit the number of hours he commits to your company while still being able to complete the project within an agreed timeframe. For example, if your budget is $2000 a week, the consultant may put a maximum cap of 13 hours a week for your project.
Another way to calculate and measure the value of fees is to agree on a fixed fee for an agreed scope of work. Essentially, the consultant will work on a project basis on a specific set of deliverables with milestones set. Payments can be made based on an agreed payment schedule as long as milestones are achieved. This is a popular approach to work with business consultants as the client can budget a fixed amount over time to manage cashflow.
Regardless of the fee that is negotiated, you must measure the investment with the potential return to make sure it is worthwhile engaging the consultant. A consultant’s contribution must have a return on investment (ROI) and long-term positive impact even after the consultant has completed the project.
There may be additional out-of-pocket expenses that are incurred as part of the project that is not covered by the consultant’s fee.
For example, if the consultant recommends a CRM or automated marketing software that can improve your marketing processes and save time, and you agree to go with the recommendation; the cost of this software will have to be borne by you.
Another additional cost that may not be part of a consulting fee is training. If a recommendation is for your staff to undergo training for specific skills that will help your business reach its goal and beyond, the cost of the training is likely to be separate from the consultant’s fee.
Other common expenses to be reimbursed can include costs for air travel (if required), transport, printing (for reports), content development, copywriting, and creative & communication design work.
DOMAIN EXPERTISE, EXPERIENCE AND PROFESSIONAL CERTIFICATION
The value and asking price of a business consultant may also vary based on the consultant’s domain expertise, experience and professional certifications.
If a consultant has a unique skill set that few possess, it is not unreasonable if his fee is higher than others due to simple supply and demand economics.
For example, if a consultant has qualifications and experience in business operations, systems and processes for a specific industry, this may be relevant expertise that commands a premium.
A strategy consultant or strategic marketing consultant with particular insight and skills in SEO strategy or Search Engine Optimisation tactics to complement management consultancy services, this is a strong unique combination.
If a consultant has vast experience, a proven track record and up-to-date professional certification for niche expertise, the asking fee may reflect this.
At Evolve & Adapt, our domain expertise strategy and digital implementation. We are hybrid marketers, covering traditional marketing and digital marketing. Our business consultant Singapore and Malaysia team members have relevant experience and internationally-recognised certifications to ensure we can serve clients at the highest professional levels.
GRANTS AND FUNDING
Many countries offer grants, funding and subsidies to local SMEs. You may want to take advantage of such schemes to reduce your investment and get the best consultant you can afford after being subsidised.
For example, as mentioned above in Singapore, local SMEs can take advantage of the Enterprise Development Grant (EDG), or sometimes erroneously referred to the EDG Singapore grant. This is to help offset business consultancy-related costs (SMEs up to 80%; non-SMEs up to 50% of qualified costs).
However, one requirement is that an Enterprise Singapore-recognised certified management consultant (TR 43: 2015) must be engaged.
A new form of funding that is available for digital strategy and digital marketing is the Digital Growth Subsidy, available to businesses in Singapore and Malaysia.
Projects under the subsidy will be funded up to 50% of digital strategy and marketing costs for eligible businesses (SGD5000/ MYR15,000).
MAKING THE DECISION OF HIRING THE BUSINESS CONSULTANT
In conclusion, several variables can factor into a business consultant’s fee.
The first consideration is to ensure the consultant’s domain expertise and experience matches your business’s needs.
While budgeting is a practical limitation, the cost of a business consultant in Singapore should not be your determining factor to hire a consultant. You should estimate and measure what tangible value and ROI the consultant can bring to your business, within an expected time frame.
Finally, remember this word of advice from investment guru Warren Buffet (via Benjamin
“Price is what you pay; value is what you get.”
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