How to Start a Financial Consulting Business

Below you will learn the key steps to starting a financial consulting firm.


11 Steps to Starting Your Own Financial Consulting Business

1. Conduct Market Research To Determine Demand

An important step to starting a financial consulting business is conducting market research. To begin, you must learn what services your clients want and how much they are willing to pay for them. There are two ways you can go about conducting this research:

  1. Survey your target market. This can be done through online surveys, emails, or phone interviews.
  2. Use industry research to determine market trends. By doing this, you can get an idea of what financial consulting services are in demand and how much they are worth.

Once you have analyzed the survey data, determine which types of businesses are likely to hire you and how much they are willing to pay. Use this information to set your consulting prices.


2. Name Your Financial Consulting Firm

Once you have analyzed your market and determined what services clients want, it’s time to name your financial consulting firm. While naming a business can be difficult, there are a few rules of thumb to keep in mind:

  • Keep it Short: Your business name needs to be short enough for clients to remember and say.  
  • Keep it Relevant: Your business name should be relevant to the financial consulting services you offer and your target market’s needs.
  • Keep it Memorable: Using clever ideas and words, help your audience connect with your business.
  • Focus on Your Target Market:  Make sure that whoever sees or hears your company name understands who you are targeting as clients.

Read our article about choosing the right business name.


3. Determine Your Consulting Business Model

There are four main types of business models for financial consulting firms:

  1. Consulting Firm Model: This is the most common type of business model and it involves hiring other consultants and employees to provide consulting services to clients.
  2. Independent Consultant Model: This is when a consultant offers their services to clients on their own.
  3. Productized Model: This is when a consultant offers a fixed set of products to their clients.
  4. Hybrid Consulting Model: This type of consulting firm offers a selection of financial consulting services and products. 

No matter which model you choose, make sure that it aligns with your business goals and the financial consulting services you offer.

Read more about choosing the right business model for your consulting firm.


4. Choose Your Business Structure and Set-Up Your Company’s Legal Entity

As with any business, the type of legal entity you set up is critical.  After all, you want your company to be treated as a separate entity, not just an extension of yourself.  There are several types of structures in which you can start your financial consulting company. Three popular options are sole proprietorship, S-corporation and LLC (limited liability company).

  • Sole Proprietorship:  A sole proprietorship is one in which the business and the owner are considered to be one entity. Therefore, you are personally responsible for all debts and liabilities your financial consulting firm may incur. One benefit of this type of structure is that it’s easy to set up and there are no formal filings required.
  • S-Corporation: An S corporation is a type of C Corporation that was designed by the IRS to help small corporations minimize their paperwork while still gaining many of the tax benefits of incorporating. It also offers protection for business owners in case of lawsuits and other liabilities.
  • Limited Liability Company (LLC):  An LLC is a structure in which the company is considered a separate legal entity from its owners. This means that the company is responsible for its own debts and liabilities. This type of structure offers protection for business owners in case of lawsuits.

Read our article comparing the most common consulting business structures.


5. Write a Financial Consulting Business Plan

A business plan is a document that outlines your business goals, strategies, and how you plan to achieve them. For a financial consulting company, your business plan should include the following:

  • Business Description: Describe what your company does, who your target market is, and how you will differentiate yourself from the competition.
  • Industry & Market Analysis: Detail your research on the industry and what financial consulting services clients are most likely to want.
  • Financial Plan: Outline your estimated income and expenses for the next three to five years.

Other sections of your plan will answer other key questions such as the following:

  • What are your areas of expertise?
  • What services can you offer your clients?
  • Who is your target audience?
  • How will you differentiate yourself from the competition?

Your business plan should also include several sections that detail your company’s history, current financial situation, and future goals. These sections will allow an investor to learn more about your company before they commit to investing in it.

Read our article about how to write a consulting business plan.


6. Apply for the Necessary Permits and Licenses

You must register your financial consulting business as a legal entity with the state in which you plan to do business.

To file your business with the state, obtain the necessary forms from the Secretary of State’s website or local County Clerk’s office. You will be required to pay a small fee for filing your business with the state.

Registering with the federal government may or may not be required. You can register your business on the federal level by obtaining an Employer Identification Number (EIN) from the IRS.

Read our article about obtaining the proper consulting business licenses.


7. Determine Your Budget & Apply for Funding as Needed

As with any business, you will need to use your own capital to finance the initial stages of your financial consulting company.  Your budget may also include several other costs including marketing expenses and the salary you wish to pay yourself.  

After determining how much money you will invest in starting your business, review some options for financing your business.  Here are several financing options that may be available to you:

  • SBA Loans: The Small Business Administration (SBA) is a government agency that provides financial assistance to small businesses in the U.S.  
  • Bank Loans: Many small business owners are able to secure loans from their local banks. Often, you can borrow money for any purpose that relates to the growth of your company.
  • Friends and Family: You can consider getting loans and/or equity investments from friends and family members..
  • Angel investors: Angel investors may provide debt or equity funding to you.

Read our article about the costs associated with starting a consulting business to help you determine if funding is needed.


8. Get the Technology & Software Needed to Run Your Financial Consulting Company Efficiently

As a financial consulting firm, you will need different types of technology to complete projects and keep track of your company’s operations. To simplify the process of starting a consulting firm, we’ve provided a list below detailing some items that you’ll need:

Computers: Even if most of your work is done remotely with clients on the other side of the country or world, you will need at least one computer that is dedicated to your financial consulting company.

Software: Software is an essential component of any consulting business. The right software can help you manage projects, track expenses, and communicate with clients more effectively.

Here are some popular software platforms that may be beneficial to your business:

  • Microsoft Office: This software suite includes a variety of applications that can help you manage your company, including Word, Excel, and PowerPoint.
  • QuickBooks: This software is designed for small businesses and can help you track income and expenses, create invoices, and manage payroll.
  • Basecamp: This project management software can help you manage multiple projects simultaneously and keep track of deadlines and milestones.
  • Gmail: Google’s email platform offers several features that can be helpful for financial consulting firms, including the ability to access the same email from multiple devices.
  • CRM: Customer relationship management software can help you track customer communication, manage leads, and create reports that detail your sales activities. 

There may be additional software products that would be beneficial to your financial consulting firm. The important thing is to select software that will allow you to effectively and efficiently manage your company’s operations.

Read our article about the technology and software you need to run a consulting business.


9.  Market Your Financial Consulting Firm to Potential Clients

Once you’ve established your financial consulting company, the next step is to market it to potential customers or clients.

Here are some common marketing strategies used for financial consulting firms:

  • Networking: One of the best ways to market your business is by meeting people and establishing relationships. Networking events provide an opportunity to meet possible clients, referral partners, and other professionals in your industry.
  • Direct Mail: You can also reach prospective clients by mailing them information about your company and services. This strategy can be expensive, but it can be very effective if done correctly.
  • Online marketing: Marketing your business online, such as through a business website and pay-per-click and/or social media marketing, can help you reach a larger audience looking for your services.

You should also consider ways to incentivize potential customers and clients to choose you over another financial planning or consulting firm. Some incentives that work well include:

  • Lower rates: Many financial consulting firms offer lower rates on their consulting services to attract new clients.
  • Discounts on consulting services: Offering discounts on certain projects may help you win bids against other financial consulting firms.
  • Free consultation: Providing potential customers and clients with a free consultation can help them determine if your company is the best one for their needs.

Learn more about how to market your consulting business.


10.  Establish a Price Structure and Billing System

There are a few factors to consider when establishing your price structure:

  • Hourly rates: Charging by the hour is a common way to price consulting services. This allows clients to budget for your consulting services and gives you the flexibility to charge more for complex projects.
  • Project rates: Charging a flat fee for a project can be beneficial for both the client and the consultant. It ensures that the client knows what they are paying up front, and it allows the consultant to charge more for more complex projects.
  • Retainers: A retainer is a set amount of money that the client pays upfront for services. This can be a good option for clients who need regular consulting services.

No matter which pricing structure you choose, be sure to clearly communicate it to your clients. Additionally, have a detailed invoice template that includes all the financial services you provided so the client knows exactly what they are paying for.


11.  Manage Client Relationships and Deliver Projects

After finding new clients and marketing your financial consulting firm, you should begin delivering the projects and getting paid. This means managing client relationships and making sure that clients are happy with your work. Some of the ways to manage relationships with your financial clients include:

  • Regular communication: Keep in touch with your clients on a regular basis, either through email, phone calls, or face-to-face meetings. This will help them feel connected to your business and ensure that they are kept up to date on project progress.
  • Project management: Use a project management system to track project progress and keep everyone on the same page. This will help avoid any misunderstandings and ensure that the project is completed on time and within budget.
  • Client feedback: Soliciting feedback from clients after every project helps you understand what they liked and didn’t like about your consulting services. Use this feedback to improve your business and make sure that clients are happy with your work.

Delivering great work is essential for keeping clients happy and ensuring future business. By managing client relationships and delivering high-quality projects, you will be on your way to a successful financial consulting firm.

Learn more about how to effectively manage client relationships.


Starting a Financial Consulting Firm FAQs

There are a number of reasons to start a financial consulting firm, including the flexibility it offers, the potential to make a good income, and the ability to help others reach their financial goals.

There are a few things you will need to start a financial consulting business, including a solid understanding of financial planning and investment strategies, good marketing skills, and a billing system.

The following tips can help you to start a financial consulting firm:

  • Choose the right pricing structure
  • Market your business effectively
  • Use a project management system
  • Deliver high-quality projects
  • Manage client relationships