Hello to all aspiring foreign entrepreneurs and startups aiming to establish a business in Japan! Today, we delve into the current trends and future prospects of Japan’s business consulting industry. This article provides valuable insights, especially for those seeking to expand their businesses in Japan as entrepreneurs.

The Accelerating Decline of Business Consultants

According to data from Tokyo Shoko Research, the number of business consultant closures in 2024 increased by 7.6% compared to the previous year, reflecting a challenging environment. One key factor behind this trend is the shift in what companies expect from consultants, driven by the COVID-19 pandemic. Traditionally, starting a consulting business in Japan required no special equipment and could be done solo, with low entry barriers. Many consultants relied on personal networks and referrals rather than professional experience or proven results. However, as companies navigate post-pandemic challenges, they increasingly demand consultants who deliver measurable outcomes, backed by specialized knowledge and experience.

Shifting Market Demands and Company Needs

Changes in the market have significantly influenced the skills required of business consultants. Companies now prioritize expertise in areas like digital transformation (DX), mergers and acquisitions (M&A), and strategic management. Furthermore, consulting is a labor-intensive business, making it difficult to secure skilled talent. This shortage of qualified professionals hinders revenue growth.

Traits of Successful Business Consultants

On the other hand, some consultants who have branched out from major consulting firms have achieved notable success. Their common traits include:

• Earning trust on a personal level: They build long-term relationships and contribute significantly to the growth of their clients.
• Delivering measurable results: Their impact is reflected in tangible improvements in a company’s profit and loss (P&L) statements and balance sheets.

These traits suggest that the consultants who will thrive in the future are those who go beyond mere advice to make direct contributions to their clients’ businesses, emphasizing both proven results and cost-effectiveness.

Keys to Success as a Business Consultant in Japan

To succeed as a business consultant supporting foreign entrepreneurs and startups in Japan, it’s crucial to focus on:

• Specialized knowledge and expertise: Mastery in areas like DX, M&A, and strategic management is indispensable.
• Proven track record: Case studies of past successes and testimonials from clients can be instrumental in securing new business.
• Networking: Building strong relationships with key industry players is essential for creating new business opportunities.
• Effective marketing: Clearly defining your unique strengths and crafting a marketing strategy to target clients—such as foreign entrepreneurs and startups—are vital steps.

Conclusion

Japan’s business consulting industry is at a significant turning point. The era of generalist consultants is fading, and the focus is shifting toward professionals with high levels of expertise and proven results. For foreign entrepreneurs and startups considering business opportunities in Japan, understanding these trends and leveraging your unique strengths to build a viable business model will be critical.