Math for Consulting: Essential Skills to Ace Your Interviews
You're in your consulting interview. The interviewer gives you a table with demographic data and different types of coffees and asks:" Where and with which coffee brand should our client open his new coffee shop." You stare blankly at the numbers. This is why mastering mental math is crucial for consulting.
Why Math is Crucial in Consulting
Consultants rely heavily on quick, accurate calculations for case interviews, market sizing, profitability analysis, and data-driven decision-making. Strong quantitative skills enable consultants to analyze data efficiently, draw meaningful insights, and provide actionable recommendations to clients.
Key Math Skills Required for Consulting
- Mental Arithmetic: Quick arithmetic skills for estimating and calculating figures. This includes addition, subtraction, multiplication, division, and percentages.
- Estimation & Approximation: Making quick, logical approximations, especially when exact data is unavailable. This skill is vital during interviews to provide reasonable answers in a short time frame.
- Growth Rates and trends: Using trends is a reflex for consultiants trying to understand and analyze a company's direction, it's performance, and diagnose issues.
- Market Sizing: This kind of question has fallen out of fashion in inteviews but it is still useful to estimate the potential size of a market to assess business opportunities. This involves making educated guesses based on available data and logical assumptions.
- Data Interpretation: Analyzing charts, graphs, and tables to extract insights is part of the day to day of a consultant and a very important part of the interview.
How to Improve Your Consulting Math Skills
Practice is key. Engage in daily exercises, utilize estimation techniques, and apply real-world case studies to sharpen your skills. Here are some resources to help you get started:
- Read our guide on the best strategies to boost your mental math speed. [Link to guide]
- Explore our tips on efficiently training mental math for business applications. [Link to guide]
- Practice your skills and track your progress with our free Business Math Trainer. [Link to tool]
Real-World Application: Market Sizing Example
Let's walk through a common market sizing question:
"Estimate the annual revenue of coffee shops in New York City."
To approach this:
- Estimate the population of New York City from something you alredy know. (e.g., 8 million people).
- Assume a certain percentage are coffee drinkers, basing it on your experience. (e.g., 60%).
- Estimate the average number of cups consumed per day per person (e.g., 1 cup).
- Determine the average price per cup (e.g., $3).
- Calculate the total revenue: 8,000,000 people × 60% × 1 cup/day × $3/cup × 365 days/year.
This results in an estimated annual revenue of approximately $5.26 billion. Just in this quick example we see that arthimetic is ubiquitous. Such estimations showcase your ability to think logically and make reasonable assumptions under pressure. To be able to do this confidently it is crucial to feel at ease with numbers.