It's easy to set up shop, harder to survive, according to a survey.

It's hard to get a handle on the business of environmental safety and health consulting. The field is fragmented, with new entrepreneurs seeming to hang out their shingle every day. There are no qualifications for entering the field, and no major association solely devoted to EH&S consulting interests.

This past March, Industrial Safety & Hygiene News surveyed 2,000 consultants to learn more about who they are, and what they do. 200 readers responded, for a 20 percent response rate. The results will interest anyone who has ever thought about becoming a consultant, and serve as a benchmark for those already in the business.

First, some background on ISHN 's consulting readers. 46 percent of the survey respondents started their own businesses. About one-quarter left industry or some other job to join a consulting firm. 20 percent became consultants after retiring, and 14 percent entered the field after being laid off.

26 percent work alone, and 56 percent employ less than 5 people. 21 percent work in firms with 6-25 employees, and 22 percent are in consulting services with more than 25 people on the payroll.

As for experience, three-quarters of the consultants surveyed have been in the business full-time for ten years or less. Indeed, the field has exploded in the past decade, thanks to corporate downsizing and environmental issues such as asbestos, lead, and waste cleanup.

52 percent of the survey respondents have undergraduate degrees; 40 percent have master's, and 6 percent have doctorate's. 29 percent are certified safety professionals (CSP), and 18 percent are certified industrial hygienists (CIH).


How's the current health of the consulting business? Overall, the picture looks promising. Most consultants-65 percent-say business in 1994 was better than the previous year.

But a different story emerges when you look at the survey by size of consultant. Only 43 percent of the one-person shops reported increased business last year. 32 percent say business dropped off.

Compare that with what large consultants (more than 25 employees) report.

76 percent say their sales increased in 1994. Only 14 percent reported sales declines.

Both small and large consultants are hopeful about 1995. Overall, 74 percent predict business will improve this year.

How does that optimism translate into hiring plans? Here again, small and large consultants march to different beats. 74 percent of the one-person shops have no plans to hire in '95. But 56 percent of large consultants will be hiring.

Where's the business coming from? Again, there are differences between small and large consultants. The smallest consultants rely heavily on OSHA compliance work, and are very involved in training, general safety, and expert witness testimony.

Large consultants are much more involved in environmental business. Their revenues from OSHA compliance work are almost equaled by EPA-related business. Large consultants also rank waste cleanup and asbestos projects as top revenue producers.


How do consultants bring in the business? Word-of-mouth referrals are far and away the most effective marketing tool, according to the survey. Association activity and presentations at meetings are also popular marketing vehicles.

Here's a sign of the times: Most consultants are engaged in partnerships-sometimes collaborating with other consulting firms on projects. And it appears that consultants who team up had better sales in 1994 on average than those who did not partner.

A majority of consultants (55 percent) see the need for a national association geared to their specific needs.


There is a variety of opinions about the cost of starting up a consulting business. 33 percent of survey respondents say you need less than $3,000 to get going (probably out of your house); 21 percent estimate costs at $3,000 to $10,000; 24 percent put the expense at $10,000-$30,000; and 21 percent say it costs more than $30,000. Several consultants contacted for follow-up interviews say start-up costs really relate to the ambitions of owners-how large and sophisticated do they want to be?

Consultants ranked their top business expenses as:

1. payroll and benefits

2. building rent and maintenance

3. maintaining technical expertise

4. office equipment

5. marketing

6. sales calls.

65 percent of consultants carry liability insurance; 35 percent do not.

As for daily schedules, consultants say they spend most of their time doing hands-on field work. The most time-consuming jobs after that are report writing, office administration, sales and marketing, budgeting and cost estimating, supervising subordinates, and personal continuing education.

It's very difficult to generalize about billing rates. They vary by region of the country, and the expertise and experience of the consultant. With that caveat, here's what the survey found:

  • The hourly rate for technician work comes in at $50-75, according to most (76 percent) of the consultants.

  • For senior staff, the rate jumps up-not surprisingly-to between $76-125, according to 72 percent of the consultants.

  • And it's no surprise that the real money follows the lawyers. 50 percent of the consultants say the hourly rate for expert witnesses starts at $126; 13 percent charge at least $250 an hour.

How do consultants measure their own performance? Most (80 percent) rely on verbal feedback from clients, business referrals (72 percent), and contract renewals ( 69 percent) to determine if their work is good. Less commonly used measures are reductions in workers' comp costs and injury and illness rates, and the use of customer surveys.


What does the future hold? Consultants were asked what drives their business today, in 1995, and then asked to predict what factors will drive business in the year 2000.

Consultants small and large overwhelmingly point to rules and regulations as the primary driver of their businesses. Workers' comp costs and downsizing, while important, are a distant second and third. Consultants don't expect market conditions to change much in the next five years. For all the talk about reinventing government, they don't expect real change in Washington. Enforcement will still be the foundation of the consulting business, they predict.

Finally, what are the biggest challenges facing consultants?

Most consultants (60 percent) point to increased competition. Mid-size firms in particular are squeezed by large service providers on one end, and low-ball local operators on the other.

Competition ties directly to another challenge consultants perceive-the need to do better marketing. Other challenges: the threat of a regulatory rollback in Washington; communication problems and a lack of direction coming from companies disorganized as a result of downsizing; and to a lesser extent ethical conflicts with clients.