MBCG in the News

"Lofty ideas at bargain basement prices"
Laura Fowlie, National Post, Nov. 29 2004

MBA students give advice: Less than half the cost of a big-name consultant

When it comes to problem-solving, many entrepreneurs do not like asking for help -- and they like paying for it even less. But there are often times when outside expertise is needed.

The good news is that high-quality business consulting services are available through many Canadian business schools -- in most cases at less than half the cost of hiring a big-name consulting firm. Student consultants, many of whom are entering their second year of a masters of business administration program, generally have access to university data and facilities, research resources and faculty expertise -- a formula that can keep their overhead costs low while allowing them to supply high-quality solutions.

The University of Alberta's Varsity Consulting Group, for example, offers free initial consultations to small and not-for- profit enterprises on a variety of business issues including financial modelling, market research, human resources, operations and strategic planning. After that, the group charges $50 an hour for the services of two student consultants.

This type of work gives students valuable insight into actual business problems, the costs and barriers of solutions and, perhaps most importantly, a vivid picture of what a potential consulting career entails.

"I started my MBA because I wanted to shift my career from a purely technical path to a more managerial one, and along the way I have become more interested in consulting," says Greg Thiessen, a 39- year-old process engineer and second-year MBA student at McGill University in Montreal.

Earlier this year, Mr. Thiessen joined the McGill Business Consulting Group, a partnership of six students that has been affiliated with the school for the past 21 years. The group operates on a 12-month cycle -- full-time in the summer and part-time during the school year. After that, they interview and choose their successors for the following year.

Throughout the summer months, Mr. Theissen says, student consultants at McGill have the potential to earn up to $8,000 -- not an overly rich paycheque, but one that comes with many other rewards.

"There's a lot of satisfaction with seeing your first client come through the door, and with running your own business," Mr. Thiessen says. "I think we offer some very good personalized service and ideas to the businesses we serve, many of which are small businesses."

Although student consulting groups often provide a full range of services, research shows small business owners often need ongoing help to formulate and revise their strategic and annual business plans as market conditions change. MBA student consultants, many of whom bring diverse backgrounds to the table, can lend clarity to entrepreneurial ideas and vision.

Scott Turner, owner of Toronto-based Chester Vending Services, had been in business for about nine months when he was referred to the Impact Consulting Service at the University of Toronto last summer for help revising his business plan. Impact student consultants prepared a proposal for obtaining more financing for the company, as well as an in-depth industry analysis and a marketing plan.

"Cost was definitely limiting my choices with some of the larger consulting firms," says Mr. Turner, himself a part-time MBA student. "And in the end, I don't think going to a higher-priced consulting firm would have made the experience or the result much better."

At Saint Mary's University in Halifax, student consulting services are offered to local businesses. The students are not paid for their work; rather, they work on consulting projects as part of a credit course in the business program.

Bob Upton, of Credit Union Central in Halifax, has used the Saint Mary's student consulting service for several projects within his organization's lending services department, including a project to develop an online application form for business loans and in-depth research into the lobster fishery, for which he paid about $1,000 in total. He has been so happy with the results that he has referred many of his small-business customers to the school.

"I tell my customers that if you pick the right projects [to give to student consultants], you can get the same or better results for a lot less money," Mr. Upton says. "For the school, I think they want the most interesting projects they can get for the students."