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Consulting Services Industry Profile Excerpt
| SIC Codes: 7371, 8742, 8748, 8999 NAICS Codes: 5415, 5416, 56133 Page Length: 10-12 Last Quarterly Update: 5/5/2008 View Sample Industry Profile |
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Just over 100,000 consulting firms in the US generate combined annual revenue of about $125 billion. Large companies include IBM, Accenture, McKinsey, and Booz Allen. The industry is highly fragmented: about 75 percent of consulting firms are one- or two-consultant operations. The average consulting firm has fewer than 10 employees and annual revenue under $1 million.
COMPETITIVE LANDSCAPE
Demand for consulting services is closely tied to the health of the US economy. The profitability of firms depends largely on the special expertise they provide to clients. Large firms can offer a variety of services to big customers. Small firms can easily coexist with large ones if they have expertise in a highly specialized area or industry. Although the industry is labor-intensive, the high value of the work produces annual revenue per employee close to $200,000.
Large offices may have annual revenue of $10 million. The ratio of professionals to administrative staff may be 2:1 in a small firm, 9:1 in a large one. Most consulting firms are privately held.
PRODUCTS, OPERATIONS & TECHNOLOGY
Most consulting firms specialize in only one area of expertise, or in a particular industry. IT consulting accounts for 45 percent of industry revenues; general management for 25 percent; HR for 10 percent; marketing for 7 percent; and process, logistics, and various types of technical and scientific consulting for the rest.
Many of the largest IT consulting firms today are offshoots of big accounting firms. About ...
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