The world of consulting is constantly changing. With the advent of technology, it’s easier than ever to start a small business and offer your expertise as an outside consultant to companies that need it. The best part is that the process of setting up a consulting practice requires little start-up capital. It can be done in your spare time, with minimal fees to set up.
Here are 11 steps you can take to get started on building your very own consulting business.
11 Steps to Launching a New Consulting Business
1. Choose Your Type of Consulting Firm
Identify the consulting field where you can use your skills and knowledge to solve problems. In other words, what type of consulting business do you want to start? Consulting fields include accounting, legal matters, writing and editing, human resources, marketing/advertising, project management, computer or technology-based expertise, and many more.
Learn more about the types of consulting firms.
2. Name Your Consulting Business
Give your consulting business an identity so people will think of it as a well-known and respected brand. You can take the name of your consulting business from your industry, focus on a geographical location, or use your own name among other options.
The main goal for naming your consulting business is to make it sound appealing and trustworthy so people will contact you whenever they need professional help with their problems.
Read our article about choosing the right business name.
3. Determine Your Consulting Business Model
There are four main types of business models for consulting firms:
- Consulting Firm Model: This is the most common type of business model and it involves hiring other consultants and employees to provide services to clients.
- Solo Consultant Model: This is when a consultant offers their services to clients on their own.
- Productized Consulting Model: This is when a consultant offers a fixed set of products to their clients.
- Hybrid Consulting Model: This type of consulting firm would offer a selection of business consulting services and products.
No matter which model you choose, make sure that it aligns with your business goals and the services you offer.
Read more about choosing the right business model for your consulting business.
4. Choose a Legal Form for Your Business
By incorporating your consulting firm, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp).
The business structure you choose for your consulting business will determine the amount of taxes you pay and which state or federal tax forms you need to file.
Read our article comparing the most common consulting business structures.
5. Write a Consulting Business Plan
Regardless of the type of consulting business you run, all business owners should write a business plan.
A business plan involves outlining your plans for your company in detail. It is a comprehensive document that explains not only your services, but also your market and the competitive advantage you’ll have in your business. You’ll create financial projections and make plans for your growth. This document might take some time to do, but it’s important to complete. It’ll help you focus your business and run efficiently out of the gate.
Read our article about how to write a consulting business plan.
6. Apply for the Necessary Permits and Licenses
Depending on your type of consulting business, there may be required licenses and permits you need to obtain to begin working. Look into the requirements in your state and locality.
For example, if you plan on offering accounting consulting services, you need to contact your state’s Board of Accountancy to inquire about the requirements for obtaining a CPA license in your state.
You must also register your consulting business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.
Registering with the federal government is also essential so you can properly pay taxes for your business. The first step is to get an Employer Identification Number (EIN), which you can apply for at the IRS website.
Read our article about obtaining the proper consulting business licenses.
7. Determine Your Budget & Apply for Funding as Needed
If you’re just getting started in your consulting career, you may not have a lot of money to invest in the business. There are several capitalization options available to help with your startup costs.
If you do have your own funds to invest in your consulting business, then take advantage of that. In addition to using your personal funds, you can also research loans for small businesses through lending institutions. , And don’t be afraid to ask for funding from family and friends as needed.
Read our article about the costs associated with starting a consulting business to help you determine if funding is needed.
Read our article about how to fund your consulting business.
8. Get the Technology & Software Needed to Run Your Business Efficiently
When you start your consulting business, it’s essential to have the right technology in place to maximize efficiency. You don’t need anything fancy or expensive, but you do need the basics. This includes a computer with Internet access, software for billing clients and creating quotes/estimates, an accounting program for tracking expenses and money coming in, a good printer, and possibly a high-quality desktop scanner.
You may also want project management software to help with collaboration and communication. You may also want to consider using Google Docs and Microsoft PowerPoint among other programs.
You can also invest in a virtual phone system so you can handle calls efficiently without needing an actual office location for your business.
Read our article about the technology and software you need to run a consulting business.
9. Practice Your Elevator Pitch
You should develop an elevator pitch for networking events and introducing yourself at social gatherings. If you’re not sure what this is, it’s an informal 30-second summary of who you are and the services you offer.
Practice your pitch with friends, family members, or even coworkers so you’re ready to deliver it when necessary.
10. Market Your Consulting Business to Potential Clients
Before you start selling your services as a consultant, you have to let the world know you exist. The first step is to create a website so people can learn more about your services and how they benefit them.
After you have a website up, start promoting it through social media channels. In addition to Facebook, LinkedIn and Twitter, consider using networks that are specific to the type of consulting business you run. For example, if you’re a website designer, use networks like Dribbble and Behance to gain exposure.
Network with other people in the consulting industry through social media and blogs so they can help share your business. You also want to establish yourself as an expert in your field by writing articles for publications and guest blogging on your site and those of others.
Read our article about how to market your consulting business for more tips.
11. Get New Clients & Grow Your Business
When you promote your services, you’ll start to get interest from potential clients. Some may contact you directly based on their research, while others will want to hire you because other consulting industry experts have endorsed your work.
Either way, you need to be ready with proposals and quotes for your new clients. This is where having a proposal template comes in handy. Having these documents on hand will help you respond quickly when someone wants to hire you, which can lead to more business.
Read our article about how to effectively grow your consulting business to learn more.
Starting a Consulting Business FAQs
There are many reasons why you may want to start your own consulting business. You may have skills that are in demand, or perhaps you have a specific type of knowledge that other companies find valuable.
Sometimes it's just about having more control over your work environment. As an entrepreneur, you're the boss and can set the terms for how you want to work. You also have the ability to change those terms as your business grows and changes.
Consulting can be a rewarding career choice because you're your own boss and get to help other companies succeed. If you do well, you'll receive financial compensation for your efforts.
To start a consulting business, you need little more than an idea and business knowledge. If you have skills that are in demand, those can be a big asset as well. In addition to your expertise, here are the minimum requirements to launch a new business:
- A phone system, such as a hosted VoIP provider, to make and receive calls from your business location.
- A website with a clear explanation of your services and how they benefit clients.
- A way to get in touch with current and potential clients, such as email or social media marketing campaigns. You can use LinkedIn groups for this purpose.
- An office area where you're comfortable working, which could be a dedicated room within your house if you work mostly from home. This is not required, but it will make you feel more like a professional and help you separate work life from personal life.
- You'll need a template for client proposals and quotes to have them ready when someone wants to hire you.
Starting a consulting business from home is much the same as the steps listed above. However, there are some additional factors that you need to take into account.
First, you'll need an office area where you can work without distractions. This could be a spare room in your house, but it should be relatively quiet and free of clutter. It's also important to have a door to close when you need complete focus on your work.
You'll also want to separate your work life from your personal life. If you constantly have business materials lying around the house, then it could impact your family or friends if they need something while you're working.
This is especially important if you live with children or other adults that aren't part of your work. You don't want them bringing you messages or asking you questions while you're working.
Finally, you should set time limits for how long you work each day and stick to them. Work can be a great thing if it's done in moderation, so do your best to avoid getting so caught up in your work that you forget about the rest of your life.
The steps to starting a consulting business online are the same as the steps listed above, but there are some additional factors that you need to take into account.
First, consider whether your consulting business will be entirely online or if there is any aspect of it that requires in-person meetings with clients. If you will have face-to-face meetings with clients, then running an online consulting business may not be right for you.
If you want to start an online consulting business, then you'll need a website where clients can go to learn about your services. This is essential for getting their contact information so you can follow up with them and send them proposals.
You should also have a way to get in touch with clients. This could be email, social media, IM bots, or something else. You can also use LinkedIn groups for this purpose.
Finally, you'll need a way to accept payment from clients so they can hire your company. This could be PayPal, credit cards, ACH and wire transfers, or another payment service.
There are a lot of tips you can follow to make starting a consulting business easier for yourself. Here are some of the best ones:
- Work on time management. This is very important if you're working from home and have family members that might disturb or distract you during work hours. You'll need to learn how much work you can get done in a certain amount of time, and make sure that your clients are aware of this, as well. If you're not meeting deadlines, then consider hiring an assistant.
- Be honest with yourself about what you can accomplish in a day. You don't want to promise too much or set unrealistic expectations for yourself or your clients. Remember that the quality of your work is more important than meeting a deadline.
- Find a niche in which you are an expert. This will make it easier to find clients, as well as help them understand the types of client projects in which you excel. You want to try and stand out from other consultants, so finding something that sets you apart from the crowd would be ideal.
- Find a way to track your progress. You'll want to know how much money you're making, as well as what types of projects your clients are seeking. There are many tools on the web that can help with this task.
Finally, learn from other people who have excellent time management skills and use their expertise and expert advice to become better yourself.
A simple checklist to use when starting a consulting business is as follows:
- Choose Your Type of Consulting Firm: This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
- Name Your Consulting Business: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
- Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
- Write a Consulting Business Plan: A strategy should be created and maintained for you to follow as you begin your business. This should include at least a mission statement, market research, and competitive analysis.
- Apply for the Necessary Permits and Licenses: In most locations, you will be required to apply for some kind of business license before you can begin operations.
- Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan.
- Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
- Practice Your Elevator Pitch: If you're going to be pitching your services to clients, then you need to ensure that you can deliver a concise and relevant pitch. The best time to hone your skills is before you start seeking clients.
- Market Your Consulting Business to Potential Clients: A solid marketing plan will be the most important aspect of your business. It should focus on attracting the right customers so that you can provide them with the services they truly need. It should also be a regular part of your business operations.
- Get Clients & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue those who could benefit the most from your services. It will also be up to you to keep up the momentum and convince them that you are their best choice.