Data analytics consultants often have a wide range of specialized skills that are applicable to the profession and field. Data analytics consultants can give recommendations for business planning if they have a deep understanding of data management and strategic analytical skills. Understanding the duties of a data analytics consultant will help you decide if it’s a career path worth investigating.

In this post, we will address the question “What does a data analytics consultant do?” as well as go over the steps you can take to become one, as well as learn about the skills and duties of the profession and the average compensation for people in the industry.

Understanding the answer to ‘what does a data analytics consultant do’ can help determine if it’s the right career fit for you. The role of a data analytics consultant is highly specialized and involves reviewing data to discover insights and offering expertise in data management. These professionals use the results of their analysis to make predictions and help guide business strategy and decision-making. For example, they may identify market trends or determine new regions for growth opportunities.

Data analytics consultants typically use various software for data analysis, so a good understanding of programming languages used for analyzing, storing, and tracking data is an essential skill. These consultants can work independently, in-house, or for an organization that specializes in data analytics consulting. They often help clients from a range of industries.

The data analytics industry is essential to organizations that depend on data to make business decisions, and data analysts typically earn good salaries. The national average salary for a data consultant is $115,411 per year. Salaries in this role can vary depending on experience, location and areas of specialization.

Below is a step-by-step guide on how to become a data analytics consultant:

1. Explore education options

Employers typically require data analytics consultants to have a bachelor’s degree, and may prefer candidates with a major in mathematics, statistics, computer or data science. Employers may also require candidates to be certified in specific data analyst software.

Having a data analytics certification provides potential employers with an understanding of your specialized skills, knowledge, and familiarity with using specific programs. There are many options available online, so consider doing some research to find one that meets your needs and career goals.

2. Obtain relevant work experience

Experience using actual data is critical to help develop your technical skills. While you’re studying, consider volunteering for projects where you can access live data. Once you begin your career, identify roles that allow you to practice and enhance your technical skills involving data.

Consider looking for entry-level positions that provide you with opportunities to help build or maintain databases or data flows. You can also try looking for opportunities to get exposure to various departments to help you understand how different teams work and get an overview of business operations.

3. Build a portfolio of your experience

Having a portfolio to show a potential employer can be an excellent way to demonstrate your skills and experience. Highlight examples of your work experience that demonstrate your ability to collect, analyze and interpret data. Use case studies to highlight your impact on the projects and include a description of the results.

For example, you may say, ‘drove the business into a new market, resulting in a 25% increase in revenue’. Be aware of any privacy concerns when building your portfolio and make sure you don’t include actual data sets to help maintain data integrity.

4. Consider additional education

Data analytics is a highly specialized industry, so some employers may prioritize candidates who have undertaken further study. You can consider pursuing a degree such as a master of analytics, master of applied analytics or a master of data science to help further your career in the field. These types of degrees can enhance your skills in programming, advanced maths and various software applications, which can help improve your technical abilities and effectiveness in the role.

Read Also: What is a Business Incubator?

Another option is to consider the benefits of completing a master of business administration (MBA). An MBA offers more focus on management, which may prove helpful if you’re working for multiple clients. This training can help you gain a broad knowledge of various business strategies and operations. Depending on your employer, you may negotiate with them to cover some costs of your degree if you’re in full-time employment.

How do I Start a Data Analytics Consulting Business?

Create a Business Plan for Your Data Analytics Business

Before you get started, you’ll need an idea of what resources you’ll need—and how to monetize your business in a practical way. We’ve answered the biggest questions about clients, costs, and profits below.

• Who is the target audience?

The target audience for a data analytics business is any individual or entity seeking to make meaning out of numbers and stats. Schools might hire an analyst to determine why there’s been a drop in graduation rates. A political candidate might hire an analyst to assess which voters to focus on during the campaign. Nonprofits could hire analysts to figure out why a fundraising campaign didn’t work. A retail business might hire an analyst to break down customer habits when visiting their website.

Some data analysts may only work with clients in a specific industry. Political and business analytics are entire fields on their own. So, if you have knowledge about a singular industry, you could focus your business on that. Otherwise, your potential clients may be as varied as the data they offer.

Starting a data analytics business won’t set back your bank account too far. You’ll need a reliable laptop (at least $1,000 if you don’t already have one). You’ll also likely want to invest in data analytics software, which aids in data mining and visualization, among other things. Tableau is a popular choice starting $70 a month. With a bit more flexibility in terms of pricing is Zoho Analytics, which starts at just $22 a month.

Other platforms such as Looker and InsightSquared offer individualized quotes based on your unique needs and situation. With these platforms, you’re able to pull in data from multiple sources, and then use the available features (there are many) to organize and mine that data before turning it into infographics.

• How much should I charge?

Data analysts generally charge anywhere from $50-$250 an hour, determined by location, experience, services offered, and project complexity. Since you’ll be working as a consultant on a project-by-project basis, it’s a good idea to lay out how many hours a project will take ahead of time. If you charge $50 an hour for an 80-hour project, you and the client will both understand from the get-go that the project will cost $4,000.

Select a Name for Your Data Analytics Business

Have a great name idea? Before you start marketing and branding your business, you’ll need to ensure your name is available. Most states prohibit or restrict businesses from adopting names that are already in use. Even if it’s legally allowed, a copycat name puts your business at risk of a lawsuit.

• Trademarks and Domain Names

Plan to trademark your business name? You can see if the trademark is available on a website like Trademarkia. It’s also a good idea to see if the domain name is available, which you can do on websites like Network Solutions and GoDaddy. Even if you don’t plan on putting together a website right away, you can buy the domain name to make sure no one takes it in the meantime.

Choose a Business Structure

Should you form an LLC? A sole proprietorship? Your choice of business structure will affect many aspects of your business, from liability to taxes.

• Sole Proprietorships & General Partnerships

If you don’t file any paperwork to legally form a different kind of business—you have a sole proprietorship or general partnership. Essentially, these are “default” business structures. A sole proprietorship has one owner, and a partnership has multiple owners.

These structures have a few initial benefits. They’re easy, fast and cheap to start and maintain. However, the limitations and risks of these business structures quickly become more apparent as your business grows. In both of these business types, you are your business, legally speaking. Your company’s legal business name is YOUR name—so you’ll need a DBA to operate under any other name. Any business debt is YOUR personal debt. If anyone sues your business, they are suing YOU personally.

LLCs & Corporations

Limited liability companies (LLCs) and corporations are business entities formed at the state level. The entity is legally separate from its owners, meaning the owners are not personally liable for the debts and obligations of the business. As a separate entity, the business also has multiple tax election options. For example, both LLCs and corporations can choose to be taxed as S-corps if they meet the requirements.

LLCs and corporations are not quite as simple and inexpensive as default structures. LLCs and corporations come with formal requirements like state reports. They also have more fees than default structures, such as formation and annual report fees. However, the benefits of an LLC or corporation—especially liability protection and tax flexibility—are significant.

Legally Form Your Data Analytics Business

If you opt for a sole proprietorship or general partnership, there’s no formal paperwork to file to legally create your entity—you just start selling your product or service. However, you will not have any liability protections or tax flexibility.

LLCs and corporations are formed by filing paperwork with a state agency, typically the Secretary of State. To start an LLC, you file articles of organization. To start a corporation, you file articles of incorporation. In most states, you can file these forms online or download a paper form from the state’s website.

Whether you’re forming an LLC or corporation, your articles will require certain basic information about your business, such as your company’s:

• name
• business address
• registered agent and office
• business purpose
• members/managers or directors/officers’ names and addresses
• number and type of authorized shares (for stock corporations)

You’ll also need the signature of someone authorized to sign on behalf of the business, along with the state’s filing fee. Fees vary by state but are typically between $100 and $200. If you hire Northwest to form your LLC or corporation, we complete and submit your formation paperwork on your behalf for just $100 plus state fees.

Get an EIN and Register for Taxes

Nearly all LLCs and corporations will need to request a federal employer identification number (EIN) from the IRS. If you file corporate income taxes, have employees, or file certain franchise taxes, you must have an EIN. An EIN is also a common requirement for opening a business bank account. Most businesses can request an EIN by filling out the IRS’s online form.

Your EIN is for federal taxes—but you’ll likely have state and local tax obligations as well. You will most likely need to set up an account with the state’s Department of Revenue, and you may need to apply for a state tax ID or a sales tax license as well.

Open a Bank Account

A business bank account keeps your personal finances separate from your business finances. For LLCs and corporations, keeping separate finances is essential for maintaining liability protection. To open an account, LLCs and corporations typically need to bring to the bank a copy of their articles, their operating agreement or bylaws, and their EIN.

Obtain Required Licenses and Permits

Many businesses will need a business license to operate. Licensing information—as well as any zoning requirements or other permits—can usually be found on the city or county website.

If your home is part of a homeowner’s association, you’ll also be subject to any of their restrictions for home-based businesses. Some areas may also require home-based businesses to obtain a Certificate of Occupancy (a document certifying the property owner has given the business permission to operate).

To be successful in the realm of data analytics, you must be equally adept with statistics as you are with people. You must be able to weave a story as easily as you dissect a data set. This is a professional path that necessitates careful attention to detail and specifics, as well as the ability to step back and look at the broader picture. This work necessitates that you be an introverted extrovert, someone who is equally at ease sitting alone as they are speaking to people.