As a consultant, you have the opportunity to find success in many different industries. You can work with small startups or large corporations, and provide your expertise on an as-needed basis.
No matter what industry you are looking for, you must do your research before starting a consulting business. If you are not well-versed in what it takes to be successful, you can find yourself sinking before you even get started.
Take a look through this ten-point consultant business checklist, and see how prepared you are for your new venture. If there is anything that needs work, take the time now to improve on these points so that you are ready to start right.
Here are ten things that you should know before starting a consulting business.
1) The Industry You Want to Enter: Before you start a consulting business, you must know what industry you want to go into.
There are large businesses across many different industries from Telecom and Technology to Healthcare and Digital Marketing. No matter which industry you want to go into, put time and effort into learning the ins and outs of the industry.
You must understand what challenges companies are facing in your chosen field so that you can implement solutions for them.
2) The Company You Want To Work For: Once you have decided on an industry, it is important to know who you want to work for.
Before you start a consulting business, you must understand the company's needs and goals. If you can bring your expertise to a specific company with problems that need solving, then there is no better place to start your consulting firm.
Understand where the company wants to be in five years and how they plan on getting there before you begin your contract. This will help ensure that your business is focused on its goals and not yours.
3) Your Target Market: After researching the industry and a particular company, you must know who your target market is.
- Who will refer clients to you?
- How many clients do you want per month?
- Which services or products will be most appealing to your target market?
Once you know who you are targeting, it is important to craft a message that is unique and attractive to them.
4) The Location Of Your Business: Before starting a consulting business, you must figure out where you will be located.
You have several options available to choose from when deciding the location of your office including home-based businesses, offices in your home, co-working spaces, or shared workspaces.
No matter which route you take, make sure that it fits what your clients are looking for so you can secure contracts with potential clients easily.
5) Pricing Structure And Contracts: Before starting a consulting business, it is important to establish a pricing structure and contracts.
If your services are highly sought after and valuable, then it is important to set benchmark prices that potential clients can agree on.
If you are still looking for contracts, consider providing more heavily discounted packages at first. This will help you get your business off the ground and test the market before raising your rates down the road.
6) The Business You Want To Run: Before starting a consulting business, it is important that have an idea of how big you want it to be in five years.
Do you want to work 20 hours per week or 80? Do you plan on hiring out employees when demand increases in your industry?
If so, then delegate tasks to spend more time in front of customers because they are what matters in making this business succeed.
7) The People You Will Work With Once you have a good idea of what your future consulting business will look like, you must know who you will hire for your business.
When starting a new consulting firm, remember that people are more valuable than money. Ensure that the people you hire all fit in with your vision and share the same passion as you before hiring them on.
8) The Systems And Tools You Need To Run Your Business: Before starting a consulting business, it is important to know what systems and tools a successful company need to run operations smoothly.
Some of these include project management software for tracking contracts, invoicing, and payments.
It might also be necessary to invest in an accounting system if your clients wish to pay with invoices or some system for managing online relationships with clients.
9) Your Marketing And Sales Strategy: Before starting a consulting business, it is important to have at least one marketing channel you will use to promote your business.
If you are on a budget, consider using social media platforms like LinkedIn and Twitter to let potential customers know what you can do for them through posts and frequent updates. Do not be afraid to ask friends if they have any contacts that may need your services either!
10) The Last Word On Consulting Businesses- Keeping Your Mind Open To New Opportunities: As with any career venture, there are always curveballs that get thrown at us along the way.
When starting in the world of consulting businesses, it is important to keep an open mind and be open to new opportunities that arise.
You never know what is around the corner, but keeping your mindset on growth will help you adapt quickly when something does fall into your lap.
Life as a consultant has a lot going for it. So, why are you still working for “the man”? If you're like many would-be consultants, you're just not sure how to get started.
Navigating the transition between a salaried employee and starting your own consulting business can be tricky.
People often ask: "Do I need to have previous experience?" "How do I start my own consulting business?" or "Is there anything specific that I need to start my consultancy?"
In this post, we'll answer all these questions and more so that by the end of reading it; if anyone is interested in starting their consultancy they will know what steps they should take to get there.
Should I create an LLC for consulting?
No, when you're starting it's better to keep things simple and register your business as a sole proprietorship or partnership with yourself.
This way you don't have to face the additional costs of incorporating and won't need any partners (either in terms of funding or work).
You'll just be able to do everything on your own! It will also allow anyone who needs consulting services from you easier access they can simply contact you directly without having to deal with all sorts of red tapes first.
How to Find the Right Company for You
The first step in starting a consulting business is finding opportunities. The key is doing your research and understanding what type of company you want to work with, as well as how much control over your hours, workloads, or even project selection you are looking for.
You should also consider whether or not you have any experience in the industry that you are looking to work with.
Industry Regulations for Consulting
It is important to understand the regulations in your area before starting a consulting business.
This includes understanding whether or not you need a license, what kind of information you will have to provide on your tax return, and more. You can find out more about the industry regulations for consulting here.
Find Your Niche
You need to find out what type of industry or niche would best suit your expertise to find clients. You will also need to decide how much control over project selection that you are looking for.
Once this has been decided, do your research and find opportunities that are a match. And the most important step in starting a consulting business is finding work. This can be done through networking or by making connections on LinkedIn.
You will also need to decide what type of company you want to work with- large corporations have more responsibility for projects while smaller companies allow for more room to grow.
Different Types of Consulting Jobs
There are several different types of consulting jobs out there, and you need to find one that suits your needs best.
Some popular options include:
- Quality Assurance (QA) consultant
- Business Process Outsourcing (BPO) consultant
- HR Consultant.
It is important to understand what type of consulting jobs are available in your area and which best suit your needs. You can find a list of all the different types here.
Consulting Firm Model
First, you will need to decide on your business structure. You can start as an independent consultant and take on assignments from various companies that call you up or find work through networking sources like LinkedIn.
Or, if starting a large-scale company is your goal, you can start as a corporation and hire staff to help run the business.
The Solo Consultant Model
As a solo consultant, you work closely with your clients and complete the project work yourself.
Kevin works with jewelry retailers to help them with operational improvement and growth. As a solo consultant, he works on all client projects and is responsible for their implementation.
The solo consulting model is great for you if you want a lean, profitable, and flexible consulting business a “lifestyle” business.
The solo consulting model is not right for you if you intend to sell your business (because you are the face of it), and if you don't like taking on high-risk projects that could have lasting effects on the industry or company.
No matter what type of consulting business you choose, it is important to understand the risks and what type of company would best suit your needs.
The Productized Consulting Model
The Productized Consulting Model is where you turn your expertise into a “productized service”, a repeatable series of steps that deliver a predictable outcome for clients.
Kristen's provides brand consulting for food and beverage brands. After years of delivering custom branding projects, she turned her expertise into a process with fixed pricing and delivers it instead of custom branding projects.
The Hybrid Consulting Model
The hybrid consulting model is a mixture of the previous three models. You pick and choose what you like about the other models and combine them into your unique hybrid.
The hybrid model is ideal once you've been running your consulting business for a few years. After a few years, you'll know what you like, what you don't like, and can start to customize your business into the perfect position for yourself.
Get Clear On Your Ideal Client
This is one of the most important questions you'll answer to start a consulting business. And it's one that many people skip over.
As a result, they have trouble attracting clients and winning projects because their services are not tailored for any specific client needs or problems, and therefore don't provide much value in an industry where there is a lot of competition.
Pay particular attention to this step and take the time to get it right. You market services to small business owners and solo entrepreneurs (think: marketing consultants, website designers, copywriters, financial planners, business coaches)
The Coach-Consultant Concept
A small business consultant needs both a business model plan and a marketing plan. Consultants work with clients on strategy, planning, and problem-solving, assisting clients to develop business skills and knowledge.
These topics range from designing a business model or marketing plan to determining which marketing techniques to use and how to use them. You'll often help clients learn how to plan and implement projects.
A small business consultant gives advice, teaches skills, and brainstorms with the client to produce practical results and enhance strategic thinking.
Market your services
No matter how wonderful you are, people need to be able to find you. This is not the shameless self-promotion that many think. Instead, it is being articulate about who you are and the value you bring.
It is about being in the right places with the right messages. That may be the web or in person or professional organizations.
It is easy to exhaust your efforts and drain your pocket with unfocused and scattered marketing efforts which is why you'll need to get savvy in marketing early and then be willing to commit to making marketing a part of your day-to-day routine.
Only secondary to your skillset, selling is your make-or-break activity. This may be the one area that makes us squeamish, especially if you are someone that equates selling with the forceful parting of a person with their money to purchase something of questionable value.
Without selling you have no business hence the reason to add learning how to sell to your skillset and comfort level.
Learn to sell yourself and your services with a plan which will help you develop the conversation points, messages, and presentations you need to turn engagements into sales.
If you are a natural salesperson, this may be the easiest piece of your business to master and enjoy. If not, spend time learning what it takes to sell you and your services.
Built trust with your clients
Trust is the foundation of doing important work with a client who has voluntarily engaged you to help them solve a difficult problem. Trust is built with every interaction and is something great consultants do with intention.
Believe me, no matter how wonderful your solution is, without trust all is lost. With trust, the work is easier, more likely to be adopted, and more likely to be the right solution for them.
Understanding how trust is gained and lost (and what it takes) can make or break your consulting business so commit now to being trustworthy in all that you do – both inside and outside of your business.
Write a business plan
Once you choose your niche and define your services, it's time to write a business plan. People make many mistakes when they start a new business and rush into things before considering the essential aspects of their business.
Although writing a business plan isn't mandatory, it can help you crystallize your ideas and avoid many mistakes.
Studies show that entrepreneurs who take the time to write a business plan when starting a business are at least two-and-a-half times more likely to follow through on getting their businesses off the ground!
The work that goes into creating an effective blueprint for your consulting practice is well worth taking some time with this step to get clarity about what works best for you as an individual not just following someone else's template.
Starting something from scratch is a quite difficult journey. Be persistent and pave your way to achieve your dreams.
Create a Checklist of your consulting services
You need to produce a list of the activities that are part of your projects. It doesn't need to be complicated, but it should include a comprehensive list of the tasks that you'll be doing during your engagement.
Most likely this list will change as you get more experience and learn other things that need to be included in each engagement.
This is a good place for you to start, but also a great reference to determine if the services you provide are aligned with your expertise and comfort levels (and if not, find someone who can help fill any gaps).
Learn how to price your consulting services
Figuring out how much is enough can seem challenging at first, but there are simple tools available to help you determine what your skills are worth. You can even use these same tools when working with clients.
It's up to you where on the spectrum you fall it could be very conservative with your pricing and low volume or you might want to ride the fence somewhere between providing lots of value and making a healthy profit.
Be sure that you don't underprice yourself and that you avoid the temptation to overprice (and then find yourself having to discount later on). Most importantly, if your prices are too high, work through this as a personal issue.
Don't let market concerns drive how much you charge potential clients. It's far more strategic to set your rates based on what is right for your business. This will give you tremendous freedom as an entrepreneur and provide an additional layer of protection against client pressure around fees versus what they can afford.
Implement tools and systems
When you are running your business on your own, it is essential to develop tools and systems. You can use software like QuickBooks or Google Apps to help with this (or any other tool that helps you keep better track of the money coming in and out of the business).
The most important things for you to implement are processes that will help you be organized with tasks, track time, communicate with clients, and manage deliverables.
These tools also free up more of your time so that you can focus on bigger picture aspects of growing your consulting practice.
Be there for Your Clients
There are multiple benefits from being accessible by email during work hours – even if most people rely on texting these days.
As a consultant providing value through relationships, you need to be available to your network.
This doesn't mean that you should respond immediately to every email, but rather that when an issue or question arises that would benefit from input from you, your clients are confident enough in your skills and expertise to reach out to you for assistance.
If you are considering making the transition from employment to consulting or simply looking for a change of pace, there are some key things that it's extremely important to consider before jumping in feet first.
It takes time and effort not only on your part but also on your family & friends who will likely be affected by this decision.
Although it can be a rewarding experience, taking the time to consider some of these resources and how they might apply to your situation will go a long way in making this transition as seamless and stress-free as possible.