In this article, we outline the most common fixed and variable business expenses you will likely come across when starting and running a profitable consulting business or offering consulting services as well as some potential income that can be expected.
Consulting Business Startup Costs
The fixed costs for any professional consulting business consist of your new business startup expenses and regular operational costs. Startup costs may include:
- Consulting Firms Business License – $100+ (required only if you work from a physical location, such as an office)
- Business Entity Fees – $100+ (Initial fees required to form your legal entity, such as an LLC)
- Insurance Policies – $100+ (Required monthly, quarterly or annual depending on your consulting firm needs. Recommendations include general liability insurance coverage and insurance that covers all employees of the consulting company.)
- Equipment, Office Furniture & Supplies – $1,000+ (purchase computers, printers, desks, chairs, etc. for your office)
- Promotional Materials – $250+ (Business cards, letterhead, brochures, etc.)
Variable costs are the costs that fluctuate depending on your own consulting business needs. They include expenses such as marketing, recruiting, and more.
- Advertising – $250+ (Paid monthly to create buzz around your products through social media platforms, pay-per-click, or other paid ads)
- Marketing Consultant – $35-$600+/hour (Paid monthly or as needed to pivot or improve marketing strategies)
- Hiring Software/Systems – $1,000+ (Recruiting the right employees and independent contractors can be difficult and costly.)
Other variable expenses:
- Conferences – $250 (A few times a year to stay up-to-date with the latest trends and ideas by attending industry events.)
- Software – $1,000+ (Technology is constantly changing. Buy or subscribe to software that helps you work more efficiently, this can include account software that many small businesses find useful.)
Depending on your field of consulting, you may have additional costs such as the cost of education, certifications, and licenses. For example, those in the healthcare field may need to attain certain certifications and licensure before they can work as consultants for that industry.
Total Startup Costs
The typical cost associated with starting a successful consulting business ranges, but the costs will likely fall between $5,000 and $10,000. If your consulting firm is a brick & mortar location with a physical office space you can expect to pay over $20,000.
Tips for Making Your Money Stretch Further
Here are some tips for saving money for all small business owners:
- Consider hiring independent contractors or a business consultant instead of hiring full-time employees. This will help you avoid costs such as insurance benefits, payroll taxes and unemployment insurance premiums
- Learn to be a savvy shopper. Take advantage of Amazon and other websites that offer free or discounted business resources such as software, advertising, and marketing materials. Look for a business bank account and business credit card with good rates and low monthly fees.
Try Our Consulting Business Startup Costs Calculator
Enter your expected startup costs below and then click the “Calculate My Startup Costs” button. We have included estimated/typical startup costs for each category, but feel free to modify our figures to reflect your own business needs and consulting business model.
Learn more about the funding options available for your consulting business.