How to Start a Consulting Business
6 steps that will set your consulting business up for success
Working for yourself rather than for an employer has its challenges, such as losing insurance benefits or a reliable paycheck. But it comes with trade-offs that, for many workers, outweigh the challenges: the ability to set your own schedule, choose your own projects, create your own career trajectory, and focus on goals that you personally value.
For these reasons and many more, self-employment is the career path of choice for over 10% of the population in the United States.
One way to make the transition to self-employment is to begin consulting in the field that you have already worked in. For example, if you work for a law firm, you could work as a legal consultant for businesses that don't have in-house legal staff.
Consulting work allows you to leverage your existing professional experience, rather than starting a business from scratch. This can be an especially profitable choice: fields that are a good fit for consulting—such as law, accounting, or management analysis—have the highest earning potential for self-employed workers.
Like any business, there are steps you can take as you start your consulting business that will set you up for success.
Invest Time in Networking
Networking allows you to connect with others in your industry, stay in touch with key people, make yourself known to potential clients, and seek introductions that can help advance your business. If you meet with someone in a professional capacity, find some way to connect with them.
You may want to exchange contact information and send a follow-up email, or you can use professional networking websites like LinkedIn. You never know who you may want to reach out to later, and online tools make it easy to find people no matter when or where you met them.
Find Your Niche
Don't try to offer something to everyone. You will be a far more successful consultant by applying your expertise to a niche market that needs what you have to offer. In this way, you can tailor your services so they add value to a specific group of people or businesses. Ask yourself:
- What services are missing in your industry/geographic area?
- What are your areas of specialty?
- What problems can you solve that no one else is solving?
- Who would benefit the most from your knowledge?
Once you define what you do and who you do it for in a succinct way, you'll know who your ideal client is and how to begin pitching and marketing your services.
Practice Your Talking Points
Think of your talking points like sound bites: short, concise descriptions of what you do and how you do it. Getting these down is key to pitching and promoting your consulting business.
These talking points should explain what you do, but, more importantly, they should highlight the reasons you are different than other consultants in your field and they should reinforce the value you bring to your clients.
- How can you help the people you work with?
- What will they experience after using your services?
- What benefit do your services provide?
Practice saying your points out loud. Enlist colleagues to listen and offer constructive criticism so you can refine your message. When you are delivering them, remember that a good consultant spends more time listening than talking. Always end your pitch with a question so you can find out more about any potential client you meet.
Put systems in place so you don't have to start over for each project. For example, you may need data-gathering forms, a proposal template, a set of onboarding questions that you always ask, or a description of your services that can be sent to potential clients.
Using templates will ensure that you:
- Work as efficiently as possible
- Have a coherent, branded look for all documents and forms
- Maintain the same level of quality from project to project
- Don't omit important forms or documents
- Have a consistent approach for working with all clients
Create a Pricing Structure
Establishing a pricing structure may require some analysis and some trial and error to learn how much time a given project will actually take. When you establish your prices, consider:
- What is standard in your industry
- How much time you expect to invest in a set of tasks
- What you need to earn to support your business and make an income
- Any outside resources or expenses you will incur
- The costs you have that would otherwise be covered by an employer, such as health insurance or retirement matching
- Your experience and expertise
If you are worried about underpricing or overpricing, try using a pricing template or time-tracker to estimate the time a new project will take. Once you have a set rate, put your pricing structure in writing and stick to it.
Remember, people are more likely to value what they have to pay for. If you charge too little in order to get more business, you might find yourself struggling to get clients to take you seriously.
Know What Comes Next
As with any business, you will be a more successful consultant if you have a plan for what comes next, both short term and long term.
In the short term, have a plan in place for how you will embark on a project before you begin working with your first client. Be prepared so when a client says yes, you can lay out a timeline and expectations for how the process of working with you will go from start to finish, as well as provide any necessary materials to get started.
In the long-term, you need to know how you will position your business within your market, how you will advertise your services, and what your expectations are for income and growth. Creating a business plan will help you plan and set goals for the next one, five, and 10 years.
Once you have created your plan, review it frequently to ensure you are making choices in line with your market and goals, as well as making any necessary adjustments along the way.