Starting a consulting firm is a wise choice, whether you’re starting a side hustle or embarking on a new professional path. Low setup and overhead costs make it reasonably straightforward to get started. You can also use the existing network in your business to find your initial clients.
So, are you ready to dive in?
Here are 11 simple steps you can take on how to start a consulting business on the side of your own:
1. make a list of all you have to offer clients
You are the product you are marketing when you start a consulting firm. Clients will pay you for your expertise. It would be best if you first established what you have to offer. This will influence how you plan and market your company.
Consider everything of value you can offer clients now and how you may expand that value in the future. Divide your audit into three categories:
qualifications and certification
What specific talents and certifications do you have in your chosen niche? What other business skills can you use to help your clients?
For example, Sara wishes to work as a consultant for studio potters. Her specific abilities include all phases of pottery manufacturing (throwing on the wheel, trimming, glazing, and firing), best practices for running a small- to medium-sized pottery studio, and teaching classes. She also understands how to sell pottery at craft fairs, in stores, and online.
Sara also holds an MFA in ceramics and a Diploma in Business Administration. Not only does she have an extensive understanding of the pottery industry, but she is also formally educated in the business world.
experience
For many business plan consultants, experience is a crucial selling point. Would you select a consultant with ten years of expertise in your sector or one with thirty years?
However, experience is more than just time – it includes where you’ve been and what you’ve done. This can have an impact on who you market to.
For example, whether you run your own little firm or manage a department within a colossal corporation will impact whether you’re more likely to work with aspiring entrepreneurs or big corporations restructuring their personnel.
An audit of Sara Potter’s experience might reveal:
- For the past 25 years, she has run her own pottery studio.
- During her time in business, she managed volunteers, apprentices, and part-time employees.
- Expanded from a one-wheeled home-based business with one small 120-volt electric kiln to a large workshop with twelve wheels and two large 240-volt electric kilns.
- She established and ran her own e-commerce store.
It is worth noting that Sara emphasizes commercial experience rather than her experience as a potter.
This should be your first objective, not only demonstrating how amazing you are at what you do and how to make it profitable. After all, that is what your clients want as well.
potential for expansion
The final element of your experience audit contains a section on where you can grow as a startup business consultant and within your sector. This area will not be used to appeal to clients; instead, it will be used for internal planning. By constantly improving your skill set, you broaden your offering to clients and even open up new market segments.
For example, Sara specializes in earthenware and stoneware, two common types of pottery. However, she has been able to experiment with porcelain during several artist residencies, which uses a unique, stiff type of white clay and fires at much higher temperatures.
She resolves to continue honing her porcelain abilities and using them in her own practice. She’ll be able to collaborate with studios working in that medium more effectively this way.
She also knows that social media has altered how potters market and sell their work. Sara plans to set aside money and time next year to pursue an Online Marketing Diploma, which would enable her to advise better businesses that do the majority of their selling online.
When your consulting business is still in its early stages, such planning may seem unnecessary. However, improving your skills is an investment in your company with a measurable financial impact. Making plans now can help you better forecast your company’s future.
2. Research your Consulting Firm
Before you start your business, you should learn the lay of the land. This entails conducting research on competitors and clientele.
Competitors in Research Consulting
Once you’ve decided who you’ll be consulting within Sara’s case, studio potters research consultants who cater to the same demographic. Make a list of your competitors first. Then search for:
- Customer feedback online What do your competitors excel at? What are their flaws?
- A website as well as social media profiles.
What is the web presence of your competitors?
Is there a social media marketing strategy in place?
How do they interact with their followers?
Don’t be frightened to conduct primary research. Contact them as a potential client to learn how they attract new clients. Better yet, contact some of their old customers and ask them what they think. Subscribe to their newsletter, follow their blog, and add them to your social media—a little light stalking could provide you with the information you need to gain an advantage.
Investigate Potential Customers
To discover what potential clients are seeking, you must first understand what they are saying. Here are a few consulting business ideas:
Take out your Rolodex
If you’re already established in your field, you probably have contacts you can turn to for help. Sara may contact her buddy David, who owns a pottery shop, and interview him.
What qualities would he look for in a consultant?
What aspects of his business require the most advice?
You should also discover whether any of your business acquaintances have ever hired a consultant. They can tell you what worked and what didn’t, how their experience went, and what they would alter if they could do it all over again.
consult with experts on related topics
Contact other consultants, not competitors, but people in related fields.
For example, Sara has several contacts who own textile workshops. They, like her, accept client commissions while also manufacturing and selling their own product and offering seminars in-house. Some have also served as mentors to other textile artists.
Sara can contact these business entrepreneurs and ask them about their mentorship experiences and how they were able to transfer their own business knowledge into helpful guidance for their clients. This will assist her in planning her own services.
dive into online forums
What potential clients are talking about can be found in online communities. Who can say? You could be a member already!
Sara is a member of the Pottery Entrepreneurs Club. She doesn’t use Facebook often, but for the sake of research, she decides to delve into a year’s worth of conversation subjects.
Many studio potters struggle to balance their teaching commitments with the time required to manufacture their own ceramics for clients and stores. Sara decides to make it one of her value offerings to assist her clients in managing both revenue sources for their studios.
attend customer meetups in your area
It’s time to go out into the field. Attending meetups in person can be an excellent approach to learning about potential clients’ problems and developing ways to appeal to them.
Local business organization meetings, networking events, workshops, and business seminars are all excellent possible settings.
Try Meetups.com for something more casual and easily accessible for free. You might be able to discover a group where local company owners in a specific industry say, restaurants – get together to socialize and complain about a business.
You will not only learn more about potential clients, but you may also be able to form relationships with a few of them and later sign them up for your services.
3. determine how much you will charge your clients?
Approaching other consultants for estimates is the easiest way to determine how much you’ll charge. Once you’ve gathered as many quotes as possible from consultants based on their experience and reputation, you’ll know what clients are willing to pay.
Because your company is new, you won’t be able to charge premium prices. However, aim for something in the middle or slightly less than average. You can always raise your rates once you’ve established a client base.
adding value to your services
Tell your own story to show a potential client how your consulting services can make a difference in their business. Create a brief, readily consumable paper that explains to potential clients how you were able to expand your own firm and raise your revenue.
This contains a rough financial history and the activities you took to grow your firm, such as rearranging operations, adding new employees, or establishing new revenue streams.
4. determine how you will bill clients
You have three options for billing any client who comes your way: hourly, project-based, or on a retainer basis. Specific approaches may be more effective for some clients than others.
Determine your preferred method and your flexibility in using other methods right away so you’re ready to onboard new clients immediately.
A word about retainer ships: Many clauses in retainer contracts prohibit you from simultaneously working for your client’s competitors, potentially limiting your overall income.
5. develop a business plan
A business plan is similar to a road map for your company. It shows you where you are right now and where you’re headed in the future. And, as time passes, you can use it to make decisions.
Aside from assisting you in making sound decisions, your business plan is essential in the event that you apply for a small business loan or line of credit in the future. Even if that is a long-term aim, having your company plan ready to go when you need it is prudent.
- A cover page
- The value you provide to clients
- How do you make money with your consulting business?
- The resources on which you rely to operate
- Future plans for expanding your services
- Your market position versus competitors
- How do you plan to expand?
- Recent financial report
- Financial predictions
With Countick’s skilled payroll services, you can easily write your first comprehensive business plan for your company.
6. decide on a business structure
Your business structure has an impact on how you report and pay taxes. It also affects your liability whether your personal assets are at risk if your consulting firm fails to pay its debts or is sued.
explore more: top 7 things venture capitalists look for in a business plan
7. give your consulting firm a name
The organization’s structure determines whether you need to register a name for your consulting business and if you will be operating under a name other than your own.
8. establish a company bank account
You should open a business bank account even if you are a freelance sole proprietor. In fact, even if your consulting firm is a side hustle, you might profit from having a business bank account.
A second account helps you distinguish between personal and commercial assets. This simplifies bookkeeping and small business tax filing. For example, you won’t have to work as hard to take advantage of tax deductions because all professional charges will be deducted from your business account.
9. obtain the necessary permits or licenses
Depending on your state, you may or may not need to obtain licensing to start your consulting firm.
10. invest in essential consultation tools
Invest in the appropriate equipment for the job today to ensure your consulting firm runs well. These are some examples:
software for writing proposals
You’ll be writing many appealing proposals for clients once your firm gets going. You can use proposal-writing software to automate some of the process and keep track of which proposals you’ve filed, where Practice Ignition is a common choice among consultants.
software for project management
Whether you can charge by the hour or by the project, it’s critical to keep track of how much time you devote to each client’s needs. The more clients you have, the more challenging it is to keep track of all the projects you are working on.
Project management software is beneficial. Mavenlink is a popular option that is meant to collaborate with you when you hire staff.
CRM
Tracking leads and clients allows you to stay on top of your work as well as the clients you’re attempting to get on board. Hubspot CRM is a low-cost solution.
bookkeeping
Keeping up with your records allows you to plan your business and take advantage of tax breaks at the end of the year. Countick provides you with a specialized remote bookkeeping service and user-friendly software, allowing you to spend less time handling finances and more time supporting your clients.
invoicing
If you don’t have a well-organized billing system in place, the invoicing cycle can soon become a dead end.
11. obtain insurance for your consulting firm
As a consultant, you will only ride your motorcycle over school buses during the day. So why should you be concerned about insurance?
In the event of a lawsuit from a disappointed customer, business insurance can protect you. It can protect you from employee lawsuits if you miscalculate wages. It can even secure your home office in the event of severe weather.
Connect with countick experts so you can decide which coverage is best for you.
Countick business accounting experts will provide you with everything you need to get started with your consulting firm if you are facing any issues related to obtaining a federal tax ID, etc, that can affect your business.
