Starting a consulting business is a huge undertaking, but also a very exciting time. When considering how to start a consulting business, it is important to understand that a significant amount of planning is involved to ensure the success of your business. Ideally, you should start planning at least a year or two in advance.
If you are wondering how to start a consulting business, you are not alone. There are several steps you can take during the planning process to prepare for a successful new business. In the time leading up to starting your consulting business, you should put some effort into building relationships in your current work environment. This includes relationships with your colleagues, competitors, suppliers, and anyone else who may make a good contact in the future.
What Is a Consultant?
Consultants provide services for companies without the cost of hiring a full-time employee to handle the work. The duties and services provided by a consultant vary widely, depending on the industry and scope of the work that is needed. Consultants are often hired to help identify and solve problems, improve how a business functions, increase revenue, or help the client find solutions to a specific challenge. Consultants operate in a wide range of industries, including business, IT, healthcare, education, and others.
Steps for Preparation
One thing many people underestimate when starting any business is the need for careful and thorough preparation. When researching how to start a consulting business, do not underestimate the need for preparation. There are several things you can do ahead of starting your consulting business that can help increase the odds of success.
Build Your Professional Network
In planning how to start a consulting business, start with building your own professional network. In addition to the connections you make in person through your work, you should spend some time networking online and in person. Attend local networking events in your area to connect with other people in your industry. LinkedIn is a great place to make connections online. You can stay in touch with people and seek introductions to build your network prior to starting your business.
Determine Your Niche
To determine how to start a consulting business in your niche, consider the service or services that are missing in your industry. Identify the struggles faced by businesses in your industry. This can help you find great opportunities. Make a list of your strengths in that specific niche and who may benefit from your service. That can help you identify your ideal clients.
Set Your Pricing Structure
When you start your business, the first thing people will ask about is the cost of your service. In the planning stage, take some time to create a pricing structure when researching how to start a consulting business. Make sure to consider how long a standard project will take and any resources you will need to get the job done. Of course, you want the price to be attractive to potential clients, but don't make the mistake of underselling your service. Your time is valuable and you deserve to be paid fairly. Additionally, if you set your price too low, people may not take your business seriously or think that you are not skilled or experienced.
Create Your Pitch
Before starting your business, you should take the time to write a short 30 second to two minute pitch about your business. Think of it as a concise description of what you are doing and talking points that highlight the things that set you apart from others in your field. Make sure to include information about the value you offer to your clients, how you can help them, and what they will gain from your service.
Once you have written your pitch, practice it out loud. You can practice it alone in the bathroom mirror, but also practice with a friend or family member. Choose someone who will be honest and provide constructive criticism, which will help you improve and refine the message.
Design a Template for Proposals
When you start your consulting business, you will need to create proposals for potential clients. You can save a lot of time by creating blank templates for your proposals. You should include a blank template for the proposal you will send to a potential client and any forms that may be needed for you to gather data, such as a questionnaire that you will ask potential clients to complete. Creating these templates allows you to be efficient with your time and consistent with your approach, as you seek work as a consultant.
How to Start a Consulting Business
Once you have researched how to start a consulting business, you are ready to get started. The steps you take in the beginning can set your business up for success.
Treat Your Business Like a Business
One of the most important things you can do when starting your business is to take it seriously and treat it like a business. You don't want to look like an amateur or someone who is just trolling for work in between jobs. There are a few things you can do to make a good impression. The first is to create a website and establish a presence on social media. Have some business cards printed to hand out whenever you meet someone who may benefit from your service.
Be Honest about Being on Your Own
Most consultants start out working at home or in a very small office space. Don't pretend that you have a large office with a huge staff, if it is just you. Some clients will actually prefer to deal directly with a consultant in a single person shop, rather than a huge firm where it is easy to get lost in the shuffle. Take meetings at your clients' offices or over lunch, but don't try to pretend that you are bigger than you actually are. This can harm your reputation. Play up the fact that you have little overhead so you offer value, or the personal attention and service that you are able to give to each client.
Finding Your First Clients
A big factor in how to start a consulting business is how to find good clients. Many new consultants are able to start out with a consulting contract from their last employer. This can give you the peace of mind of knowing that you have one good client lined up before you go out on your own.
Don't Be Afraid to Start Small
Whenever you are starting a new venture, you will need to demonstrate your skill. This can be done by taking some small jobs at first to show the client what you can do before they commit to a longer term contract. This can attract clients who are wary of starting off with a huge project and give you the opportunity to get some experience and references for when you go after bigger clients.
Have a Plan for Slow or Late Payments
As a business owner, you will be waiting for payments from your clients. If you are working for larger companies, the process of getting invoices paid can take some time. The person you send the invoice to will have to get it approved and pass it along to an accounts payable department, who will cut you a check. This can take time, so make sure you have a contingency plan, such as savings or a line of credit to get you through until your invoices are paid.
Put Everything in Writing
When planning how to start a consulting business, it is important to make sure that everything is in writing before you do work for clients. This includes defining deliverables, a schedule for delivery, and the price of the service. When extra work is needed, there will be extra fees involved. When you have everything in writing, disagreements are less likely and easier to resolve.
Have a Plan to Deal with Difficult Clients
Clients that are difficult to deal with, never happy, or always extremely late paying their bills can be a drain on your business. There are a few things you can do with these types of clients, depending on the situation. You may decide not to work with that client again, which is completely reasonable. If you want to take another project or really need the work, charge more on the proposal for the next project to cover the extra work and aggravation. In some cases, it isn't worth the trouble and you should just move on to the next client.
The idea of staring your own consulting business can be a little scary, but very exciting. There is a lot that you can do to ensure success, beginning with taking the time to research how to start a consulting business and spending time planning before you jump in. careful planning and research can help you get ready to go out on your own. Once you are ready to start, taking your business seriously by creating a website and a professional image and starting off with a clear plan for your business can help you achieve your goal of establishing a successful consulting business.