Looking into how to start a consulting business to help others level up the profitability and efficiency of their business?
If you have expertise in a certain industry, skill, or segment consider sharing that valuable information as a service via your own consulting business or side hustle to help others and simultaneously make a fine dime.
Offering consulting services is one of the most profitable ways to leverage your expertise because you know your onions and can provide expert advice related to your field.
Industries hire consultants to assist their leaders, managers, business owners, and entrepreneurs in navigating the complexity of their businesses.
This blog post contains a comprehensive step-by-step guide on how to start a successful consulting business.
Starting your own consulting business is as demanding as starting any other new business and so you must have a meticulous approach to attract the right clients and be successful
Read through to catch all the key points!
The first essential thing to do when starting a consulting business is to choose a niche. You need to identify your strength and provide consulting work in that field.
One of the gravest mistakes a new consultant can make is trying to be a jack of all trades.
You cannot offer what you don’t have and so specializing in a specific area allows you to provide more value by focusing on what you are an expert in. Specializing also helps potential customers know your business is offering a particular service.
Ordinarily, selecting a niche should be simple since you know what you have to offer. However, it can sometimes be a complex process when you are an expert at a sub-niche.
For instance, an individual could make the mistake of introducing themselves as an HR consultant, making them seem like experts in all HR consultancy fields. However, in reality, they only have skills for a recruitment consultancy. This could mislead customers and attract the wrong clients to the business.
So, to avoid such mistakes, always introduce your consulting business with the right title. Identify your strengths and offer the exact consulting service that fits your expertise.
If you don’t already know where you belong, see the list of some of the common consulting businesses available and the various sub-niches in the appendix of this article.
You probably have many of these already through your various experiences in the industry. However, if you don’t have enough to prove your expertise, getting clients may be slower.
While it is not compulsory, having certificates from reputable sources related to your consulting business helps boost your credibility.
Some potential clients will research your consulting business and go as far as checking your certifications. If they don’t deem you credible enough from there, it may take a lot more to convince them otherwise.
So, ensure you have one or two certificates that back your expertise claim in the industry.
In addition to skills certificates, you might have to get a consulting license, depending on your industry. Some require you to get licensed by authorized agencies before starting your consulting business.
So, once you decide on your consulting business type, determine if you need a license to operate legally. That will help you avoid legal issues and increase your business credibility.
After you have chosen your consulting practice and gotten the proper certification and licensing, the next step in this “how to start a consulting business” guide is building your brand.
This is where you make all the necessary preparations to launch a successful consulting business. The preparation process is similar to creating a regular business. It includes the following activities;
Market research is an essential step for any business that wants to be successful. It helps you to gather important information about your target market and create a strategy tailored to reach them.
Equipped with market research, you understand who needs your consulting service and can make a sound judgment on delivering value to them in a way that makes you stand out among your competitors.
Additionally, it helps you to paint a more accurate picture of your buyer persona, their behavior, demographics, influencing factors, unmet needs, and financial capabilities.
As stated earlier, you’ll be able to create your buyer personas more accurately after market research. With your buyer personas, you can understand your customer better, and with that understanding, you can serve them better.
You can tailor your services, content, and overall marketing strategy to match their behaviors, specific needs, and expectations. It also helps you analyze your target audiences’ similarities, trends, and patterns.
Now that you recognize who your consulting business is serving, you can now build your business plan.
Your business plan is a document highlighting your business goals, how to achieve them, and the timelines for achieving them. The business plan is a temporary document because it expires when the goals are achieved or the timeliness elapses. When this happens you’ll have to create another business plan to identify your next goal, methods to achieve it, and the duration.
So, how do you build a business plan?
If you don’t know how to build a business plan, registering for a professional business course will be in your best interest. These business courses usually teach upcoming entrepreneurs the essentials of building a business, including how to build a business plan.
Since you are starting a consulting business, you can take specific business courses related to consultancy. You can also be particular about the type of consulting business you want to start. For instance, you can take a course on how to start a marketing consulting business, instead of a general course on how to start a consulting business.
Building a business plan is non-negotiable because it is the framework on which your business will run. Without it, you will be without a guide and may lose sight of your goals because the plans are unclear.
Selecting a brand name can come at any time when planning to start a consulting business.
Still, it must be before registering your business.
Many consulting firms, especially one-man consultants, use the name of the business owner. But, you can be creative by forming a unique name that easily attracts clients to you.
You also need to create an identity for your business. This includes your logo, brand color, tagline, tones, graphics, font, and images.
This helps your consulting business create a unique presence in the industry. You can easily stand out since clients can identify your brand with all these visuals and elements.
After choosing a name and other brand identity elements for your consulting firm, registering your business is next.
Registering your business makes it a legal consulting firm, especially when you’ve also obtained the necessary licensing in your industry. It protects your unique business identity from being used by another person. It also protects you from lawsuits since it clarifies that the business name you chose is still available.
Additionally, registering your business improves credibility from your potential clients’ perspectives.
Building a website for your consulting firm is super important because it helps to build your online presence.
Every successful consulting business owner has a website because they understand how important it is in today’s world.
A website increases the credibility of your new consulting business, generates leads, helps you attract clients, helps customers find useful information, enables effective PR, and allows you to market your service.
So, hire a website builder to create a professional website for your consulting business. And if you have a background in web design, you can do it yourself.
Even before starting to generate leads for your new consulting business actively, you can begin making a list of your potential clients. This may include small businesses around you that need your consulting services.
From there, you can start sending cold emails, creating awareness for your business, and pitching your service to them. This is where most consulting businesses start and get their first customers.
Don’t forget that some of your prospective clients don’t know they need your service yet. It is up to you to identify such organizations and make them see why they need your consulting services.
To create a profitable consulting business, you must create a pricing structure that suits your services. You don’t want to undervalue yourself or overprice your services.
Pricing is one of the four Ps of marketing and you’re going to need a pricing structure when you start building awareness for your consulting business.
Determining how much to charge may be challenging, especially because you’re running a new consulting business for the first time.
You can use the following pricing strategies to determine the best price tag for your services;
- Competitive pricing: Charge based on the price of your competitors’ service. This will usually be cheaper or have more value than the competitors’.
- Skimming pricing: This entails introducing new services or products to the market at a high price, then reducing it strategically when competitors enter the market.
- Value-based pricing: This is when you price your services based on the amount your clients think they are worth.
- Dynamic pricing: Entails changing varying amounts based on demand and marketing demand.
- Penetration Pricing: Here, you introduce your service at a low price and strategically increase it over time.
- Freemium Pricing: This entails creating a free service alongside paid versions offering advanced features.
- Premium Pricing: This means pricing your service high deliberately to achieve a sophisticated, valuable perception of your service.
While selecting your pricing strategy, ensure you put your target audience at the center of your decision.
What are their financial capabilities? Can they afford your price? Will a low price make them perceive your service as inferior? How do they view your competitor’s pricing?
When you answer these questions, you’ll find it easier to decide on your consulting fees.
Note that due to the nature of consulting firms, you can charge an hourly rate, a one-time fee, or upfront + service outcome value.
Decide whether you want to start a consulting business solo or with a team.
This usually depends on your consulting business structure. Most big consulting businesses hire extra hands to handle the demands of clients.
For instance, a wholesome human resources consulting company may hire specialists in different HR fields, like recruitment, training, compliance, and career consulting. They may also have a sales and marketing team to help promote their own business. Whereas a brand consultant can go solo since the field is a sub-niche of marketing consulting.
You may not hire a team initially since it’s still a new business. But when you run a profitable business and demands grow, you may have to hire a team eventually to meet the demands and improve service quality.
So, whether you build a team or go solo depends on how you can handle the demands and your new consulting business. It also depends on the consulting business model you choose;
- The firm consulting model– start solo and hire people along the way. You share responsibilities.
- Solo/independent consulting model– Just you and maybe a few contractors. You do everything, from marketing to delivery.
- Hybrid consulting model– Using elements from more than one consulting business model.
After making all the preparations above, you can launch your business strategically, attract clients, and begin your consulting practices.
Ensure that you maintain your brand’s voice, use influential strategies, focus on your target audience and not your services, follow the plans according to your business plan, and learn from your competitors.
Also, ensure that you have enough funding to see the launch through. It helps to have cash reserves, grants, or a loan.
Marketing is an essential activity in every consulting firm model. It helps to increase the online presence of your consulting business, generate quality leads, convert new clients, and increase your ROI.
It is important to note that planning for marketing can come before your consulting business launch. Preparing a marketing strategy before launch makes it easier for you to promote your business immediately after. By doing this you don’t have to wait before promoting your business. You can execute your marketing plan immediately after launch.
If you don’t already have a marketing plan, you can always create and implement one after your launch. You must double up on the process to avoid crashing the launch momentum.
A marketing plan entails creating marketing strategies to help you connect with the right customers across different channels. The steps include;
- Identify your marketing goal
- Conduct market research, get to know your potential clients, and understand your services (you probably don’t need to do it again if you tick all the boxes in step 2).
- Break down your goals into mini-goals
- Set a budget
- Outline all the processes involved in achieving the goals.
- Carry out the marketing plans.
After carrying out your marketing plans, measure the outcome of your marketing campaigns. Many platforms from the web to social media platforms have analytics tools that provide such insights.
If your launch and marketing tactics were successful, potential clients should be contacting you.
In this stage, you create a strong presence for your consulting business in the industry with your exceptional services. Ensure you deliver satisfactory consulting work to your clients.
This can help promote word-of-mouth referrals as satisfied clients recommend you to others needing your services.
When the work goes beyond your jurisdiction, you can partner with or hire an extra person with the needed consulting skills.
Businesses in different industries seek professional advice and guidance from experts every now and then to improve their productivity.
That is to say; the consulting industry is highly sought after by individuals and businesses who understand its value.
If you have made a decision to start a consulting business, potential clients are waiting!
Fortunately, the overhead of starting a consulting business is not much. You may not even need to rent an office space because working remotely is allowed!
So, what’s stopping you from becoming your own boss? Read the 7-step guide above again to begin your journey to flexible work life and financial freedom.
HR consultants provide guidance and advice to businesses to ensure that their human capital works at optimum efficiency and performance levels.
As a full HR consultant, your job description includes developing HR models, advising the organization on policies, resolving a business’s issues with its employees, and recruiting and training new employees.
Because of the broadness of human resources consulting, experts in the field can specialize in specific areas, like career coaching, leadership, recruitment, employer branding, talent management, compensation & benefits, HR technology, Human capital strategy, HR learning and development, and more.
So, if equipped with the skills, you can offer full HR consultancy service or specialize in one or more fields of HR consulting.
IT consultants, also known as technology consultants, provide expert advice to ensure that a company’s technology and software are not behind. They ensure that the technology utilized in such companies does not hinder the business’s productivity.
As an IT consultant, you are expected to help any company that hires you to manage their technology to get optimal results. This includes analyzing the industry trends and suggesting the right software to help them streamline their business processes.
Like most other fields in the consulting industry, IT is broad. So, you most likely have to specialize or build a team with members who are experts in various IT areas. Some common IT consultants are cyber security, system admin, UI/UX, innovation, IT strategy, data analytics, implementation, CRM, ERP, and systems integration.
A legal consulting company provides legal guidance to individuals and businesses. They usually have knowledge about specific law fields, like business, real estate, real estate, and others. While legal consultants provide services similar to lawyers but only provide counsel outside the courtroom.
As a legal consultant, you are expected to advise your clients, be they businesses or individuals on complex legal matters. You must clarify the case and suggest ways to deal with it.
Some legal consultant services you can offer include compliance, environmental, business, trial, intellectual property, taxes, and startup consultancy.
Strategy consultants work with businesses to develop practical strategies to improve their organization. They usually specialize in a particular field so they can share their knowledge and experience in the industry. Strategy consultants identify challenges, research into competition, and recommend actionable solutions to help the company improve.
Some services available in the strategy consulting field are marketing, growth, CSR, recruitment, market entry, HR, the field of operations, digital, commercial, legal, economic policy, functional, merger and acquisition, corporate, Business Model Transformation, and others.
Financial consultants work with businesses, individuals, and the government to help them meet their financial goals. They review important finance elements, like income, expenses, assets, credit, and debts, and provide recommendations to their clients to help them make the best financial decisions. In addition to giving recommendations, financial consultants can get hands-on and assist their clients in managing their investments and business bank account appropriately.
Some financial consultants are insurance, accounting, investment, corporate finance, finance planner, wealth advisor, Robo advisor, debt counselors, stock brokers, and finance therapist consultants.
Management consultants provide expert advice and guidance to organizations in the managerial aspect of their business. They identify challenges, collect information, analyze it, and implement solutions to help businesses achieve their goals.
As a management consultant, you are expected to handle any problems related to leadership, management, operations, and more. Your duties may include interviewing clients’ employees, analyzing figures, preparing proposals, recommending solutions, and overseeing the implementation of the solutions.
Some of the managing consulting services available are; strategy, financial, IT, human resources, operations, project management, reorganization, mergers and acquisition, supply chain management, risk management, analysis, and objective assessment.
Wellness and fitness consultants provide personalized recommendations to their clients for diet, exercise, and general health matters. They are also hired by businesses to help create programs that promote the well-being of the workers.
As a wellness and Fitness consultant, you will likely implement programs, educate, and recommend solutions to help your clients meet their health goals or optimal wellness. You must have a background in nutrition, biology, exercise, mental health, health science, and other experience that makes you an expert in the wellness consulting business.
Operations consultants assist businesses in becoming more productive and effective in their internal operations. They evaluate the current performance of the involved personnel and their processes, then recommend ways to enhance the value chain.
You may confuse operations consultants with management consultants since their roles are similar; however, there’s a huge difference between them. While operations consulting focuses on a single problem, management consulting looks at the broader picture.
Related services include sales, marketing, business process management, research and development outsourcing, sourcing and procurement, organizational operations, supply chain, finance, and ROI operations consultancy.
Marketing consultants assist individuals and businesses in creating a unique strategy to successfully launch marketing campaigns across channels. They recommend the best tactics to help their clients achieve their marketing goals, which could be sales, lead generation, sales process optimization, ROI increase, and more.
As a marketing consultant, you must be well experimental in the field such that you can understand the identity of a business, its target market, marketing goals, and budget, then build a befitting marketing strategy.
Some marketing consultants available are social media marketing, growth, outbound, inbound, operations, PR, Search engine optimization, product development, sales, and brand consulting.
Sales consultants assist a business’s sales department in implementing the best strategy to help improve their sales process. They use the organization’s sales goals to build and suggest the best sales process stages, milestones, and task assignments to help them realize their target sales.
As a sales consultant, you can offer services such as sales process, direct sales, management, B2B sales, automotive sales, business sales, or an independent sales consultant.