When you’re an expert in your field, being a consultant makes perfect sense – you get to do what you’re good at and get paid for it. The question is, how exactly do you start a consulting business?
There are a few things for you to consider before you can get started. From determining the range of your services to perfecting your pitch and setting up a payment system, your goal will be to make your business visible to potential clients and to deliver the results your clients want.
I work as an independent consultant and I know the challenges that lie ahead of you. Based on my experience, I compiled a list of the 8 most important steps to start a consulting business, so check them out to get a good start!
8 Steps to Start a Consulting Business
Starting your own business might seem like a daunting prospect, but it’s really not that hard. Working as an independent consultant, you will still have plenty of freedom and will be able to skip some of the bureaucratic requirements of starting your own company.
If you’re looking to start big and hire employees, there will be more hoops to jump through before you can begin.
Below, you’ll find the steps that are worth looking into, regardless of the type of consulting business you’re planning on starting.
1. Pick Your Business Model
The first step for any consultant will be to decide whether you want to work on your own as an independent contractor or if you want to start a company and hire people.
If you want to set off as a solopreneur, you will be your own boss. You’ll set your hours and your future clients will hire you to work with you directly in any manner that you choose. The advantages of this are clear: a lot of freedom and even the ability to combine your consulting work with a full-time job elsewhere.
Starting your own company and hiring people to work for you is a lot more complex. You need some capital for a workspace (unless all your employees will be remote workers), and for wages and insurance for your employees. You also have to meet some additional legal requirements.
In this article, I will mainly focus on independent consulting. You can start out small and then grow your business to rely on your already established brand and hire experts like you to reach a broader clientele. Even if you want to start your own company from the get-go, keep reading – every consulting business should keep the following steps in mind.
2. Decide Your Scope
Becoming a consultant will often be a logical next step if you’ve been working in a certain field for some time, but you don’t need to have years of professional experience in order to start a consulting business.
What you do need are skills and knowledge that set you apart from the rest, and a way to show this to your potential clients. This can mean a diploma, certifications, or a portfolio of your work that proves your skills in the field
There’s more to it than just your expertise. In order to run a successful business, you will have to forge your own skills to match the needs of the field you’re in.
Make a list of things you could see yourself doing as a consultant. This will serve as your future list of services that you can provide to your clients.
3. Research Your Competition
Once you know what you want to do, it’s time to see what your competitors are doing and whether you can do it better.
Do some research on similar consultants and consulting businesses. Look up their websites, make some phone calls, and take thorough notes of all your findings. Most importantly, check how many such businesses you’re going to be competing with in your chosen field.
If you’re going to be working in a field with a lot of competing consulting businesses, you need to find a way to make your business stand out from theirs and give customers a reason to work with you instead.
If you’re looking at entering an industry that doesn’t already have a lot of well-established consulting businesses, it could mean that the demand for it isn’t very high. On the other hand, it could be a good thing if you can break into this relatively untapped market and convince businesses that they do in fact need your services.
4. Check the Legal Requirements
Even if you want to chiefly run your company from home, there will be some legal requirements that you need to meet in order to start a consulting business.
Depending on the type of consulting you choose to do, you may work as an independent contractor. This is more of a freelancer role, in which you alone will have to deal with matters like your insurance and taxes.
If you want to register a business, even if it’s just you, this means getting a business license and making it all official. This process and the exact requirements will vary based on your location, but typically, you can register it with your Secretary of State.
Starting out small means that you might be fine with just registering your business as a Limited Liability Corporation (LLC), but it’s best to consult the U.S. Small Business Administration to make sure.
Being a consultant may often also require a special license other than just a business permit. This depends on your chosen field. As an example, accountants may often need a Certified Public Accountant (CPA) license. Check your local laws to determine what your niche may demand.
5. Set Your Pricing
Before you proceed, it’s important to give your pricing some thought. As a new business, pricing your services correctly has a big impact on whether you’ll be able to land your first few clients.
If you previously worked in this field, a good rule of thumb is to use the same hourly rate as the one you had at your full-time job and then add to it. Similarly, if you want to work on a per-project rate as opposed to an hourly rate, compare the length of the project to the amount of money you’d expect to earn in that timeframe.
Don’t underprice your services just because you’re new – this actually has the opposite effect and might make potential clients think you’re not an expert in your field. On the other hand, overpricing your work might put some clients off.
Research your competition and price yourself accordingly, all the while knowing that you can raise your rates in the future.
6. Work On Your Marketing Pitch
You may have a marketing budget set aside, but a strong part of actually signing new clients will be down to you.
You will be the one to communicate with clients, present your skills, and tell them what kind of improvements you can deliver to their business. This can mean anything from an increase in revenue to greater employee retention, all depending on your field.
Ideally, work on a quick version of your pitch – a so-called “elevator pitch” – and then build on it. For each potential client, tailor your pitch to match their exact needs and highlight the skills that you can bring to the table.
Emphasize the benefits the client will get from hiring you and not somebody else. Don’t focus on yourself as a person as much as on what you can do for your client’s business and what they can gain from it.
7. Set Up Your Payment Methods
It’s not enough that potential clients will be able to find you – they also need to be able to pay you. Whether this will be done through your own website or in another way, it’s all on you to get this sorted ahead of time. Good news – it’s actually really easy to do.
Your clients want a quick, easy, and secure way to be able to pay for your services. To tick all of these boxes, I recommend Pay.com – a flexible payment system that will match the needs of your business.
With Pay.com, you can set up a whole payment framework on your website, with multiple methods to choose from for your clients. You can also accept credit card details over the phone or send your clients direct payment links.
It’s easy to get started with Pay.com for a simple way to accept payments as a consultant.
8. Start Marketing Yourself
Once you’ve sorted the legal side of things, it’s time to make sure your business is ready to attract your first clients. There are a few ways to do this:
- Set up your own website – This is a great way to make sure that potential clients can read more about your services. Most businesses these days strongly benefit from having an online presence.
- Rely on word of mouth and referrals – If you’ve done any work in this field before, you may have contacts that could recommend you to friends or business associates. Don’t forget to ask your previous employers or clients for referrals. You can also ask them for a reference and add it to your website to show potential clients that you’ve already worked in this field.
- Present yourself as an expert – Depending on your field, being active on social media could be a good idea. Get on LinkedIn, Facebook, Instagram, and other channels. Connect with potential clients and other experts in your field and start sharing useful content to build your reputation. You can also start writing articles on Medium to build up a following.
- Launch a marketing campaign – You might not want to start with a marketing campaign, but at some point, you could invest in advertisements to widen your reach.
- Try out cold calling and cold emailing – These are options that many independent consultants don’t feel confident with, but that also means that you could give yourself an edge if you reach out to potential prospects instead of having them come to you.
The Pros and Cons of Starting Your Own Consulting Business
Running your own consulting business has a lot of perks, but it also has some drawbacks. Let’s explore them all below.
- You can use your expert knowledge to make extra money or even replace your full-time job
- You’re your own boss, which means setting your own hours, rules, and rates
- You can build your business and evolve it into a full-fledged consulting company over time
- You get to work with many different people and broaden your horizons
- Owning a consulting business can require a lot of flexibility
- In the beginning, you will have to establish yourself and search for new clients
- It can be hard to maintain work-life balance if you run your own business, especially when it’s new
The Bottom Line: Is Starting a Consulting Business Right for You?
Starting a consulting business comes with its fair share of challenges, but it can also be extremely rewarding. You already know your field better than many other people, and that means you can bring real value to your clients, all the while retaining the freedom of being your own boss.
When it comes to consulting, you can start out as small or as big as you like. You can be an independent contractor and lend your skills to various businesses or you can be in charge of employees who do it for you. There is plenty of room for growth, which is what makes consulting a good field to get into.
If you want to capitalize on your skills and run a consulting business, follow the steps above to get started on the right foot. Market yourself, build connections, and watch as your business grows!
When the time comes to invoice your clients and accept payments, you’ll want to be prepared. Sign up with Pay.com today to have a simple, frictionless payment system in place.