Business Advice

How to start a consulting business

Cameron Fleming | 14 June 2021 | 3 years ago

How to start a consulting business

If you’re reading this you are clearly entrepreneurial in spirit. Starting your own business requires a certain type of character, and starting a consultancy requires a few prerequisites. We are here to help you along to your launch day!

Before getting to the how-to, let’s look at the what-do-you-have first:

  • Do you have a well-developed network?
  • Are you self-directed, a self-starter and a self-motivator?
  • Do you have an impressive portfolio filled with client success stories?
If you have 2 or more yes answers, then you might be ready to become a consultant. Let’s look at some additional necessary components as well as how to begin the journey.

Traditionally consultants have multi-level bachelor related degrees underpinning the profound experience which has taken them to expert-level.

However, the specifications are diverse and come down to a client’s perception of value. There are, indeed, clients who have an aversion to lists of letters behind your name.

How do I start a consulting business?

Here is an overview of the recommended steps to becoming a consultant:

  1. What is your area of expertise?

Consider your core strengths outside of your current job. Do you write blogs for friends and are brilliant at it? Or do you have that valuable talent of deal closing, so good that your colleagues regularly ask for help? Here are 3 helpful prompts:

  • I have a unique point of view on…
  • I have the significant experience to be considered a thought leader in…
  • I have facts showing there is a demand for <name the service>.
  • I am good at being very organised, self-motivated, and boundary setting.
If you are having difficulty identifying your consulting speciality, consider these prompts:

  • Do you have an area you excel in at work?
  • Are there projects you’ve over-achieved at according to performance reviews?
  • Is there a hobby you’ve mastered outside the office?
  • What do you enjoy? This should possibly be the first question as it can mean the difference between long term success or failure.
  1. Set goals for yourself

You need goals to remain focused. And everyone loves a finishing line.

Is this consultancy going to be an after-hours business or a full-time business? Do you envision employees in the future? Do you intend to sell the business one day?

Make sure your goals are SMART:

  • Specific: Clearly defined outcomes
  • Measurable: Identify targets and milestones
  • Attainable: Keep them realistic
  • Relevant: Set goals that are relevant to the business model
  • Time-Based: Identify deadlines
From the broad goals draw up the more immediate needs.

Revisit these goals quarterly in the future and adjust or refresh them.

Business academic researchers propose including visionary goals for your business as well.  Use these prompts to help with visionary goals:

  • Service: I will improve customer satisfaction and retention by…
  • Social: My corporate social responsibility will be via…
  • Profit: I will increase profits by X percent by…
  • Growth: I will expand my company by…

3) Register your business

You will most likely start trading as a sole trader but remember that means you will be solely responsible for any liabilities that come with your business. Read our article “How Much Tax Do I Pay As A Sole Trader” to understand your tax responsibilities.

You’ll need to register as self-employed with HMRC.

4) Insure yourself

Having insurance means your business can recover in the event something goes wrong.

Public liability insurance can also be considered. If, for example, you attend meetings at a clients’ business premises, or have clients visiting you at yours, and you are covered for any damages or losses that could occur during this time.

5) Create a digital presence

Without a digital presence, you are invisible. There are endless reports that show 63 percent to 85 percent of consumers use websites as their first port of call before engaging with a business. A third of them will engage with a business that does not have a website.

An SEO optimised website will give you a better chance of being ‘found’ online. Our article “What Are Unique Marketing Ideas” can help you get your brand noticed.

HubSpot will help you track leads, book meetings and is scalable.

Remember, your website is your shop front. Invest in it and enjoy the returns for years to come.

6) The certified edge

Are there certifications that will give you an edge? Find out what’s important in your industry and invest in expanding your knowledge base with short courses. You need to be ahead of the game, as clients are coming to you for your knowledge.

7) Target market

Be clear about who your target audience is. Not only do you need to know, but so will your marketing agent, a graphic designer, and so many more. Here are some prompting questions to help you:

  • Where is my target audience located?
  • What are their biggest pain points?
  • What are their daily roadblocks?
  • Who are my competitors?
  • What is my differentiator?
  • What motivates my target audience?
Being clear about who your customer is and what’s important to them will ensure that your service hits the bullseye each time.

8) Create your offerings

There are few preferred consulting models on the market which you can use for your business or as points of departure:

  • Done For You
  • Done With You
  • Coaching (One-on-One)
  • Group Coaching (One-to-Many)
  • Online Program (On-Demand)
This will be influenced by the type of client you are targeting.

9) Establish your pricing

This can be the hardest part of starting a business. The default position of entrepreneurs is to charge less than you’re worth because you don’t have proven results yet. Avoid this by researching what your competition is charging in your area.

Next, you should decide how you’ll invoice clients and what payment methodology will be used.  Private clients may want credit card facilities, for example. Read our article “What is the best accounting software for small business” to see the invoicing options available. For payment options, see our article “Best payment gateway for small business” .

10) Say “no”

Avoid saying “yes” to every client and focus your work on high quality, organised, and manageable projects.

A polite “I’d love to serve your needs, but with my current workload…” response will be appreciated by prospective customers, will show you are in demand and will maintain high-quality work.

Say no to clients that are not a good fit and proactively introduce them to a better fit.

Getting clients

You are raring to go. Now you need clients. They won’t come streaming to your newly opened door. Examine your existing network and start marketing your consulting services. Take an autodidact approach and learn exactly how to sell to prospects. Here are some steps to follow:

  • Identify your ideal customer – point 7 above.
  • Ascertain where they go online – yes, it’s marketing stalking.
  • Learn what motivates them – point 7 above.
  • Evaluate your competition.
  • What is your differentiator?  – point 7 above
  • Develop an outreach strategy.
  • Be clear in communicating your unique value proposition.

Identify your ideal customer

You have executed this step in point 7 above. If not, you now know why we recommended you do it, so chop-chop get it done.

Ascertain where they go online

The web is a big source of leads for most businesses. Ascertain which websites and social media your clients are typically active on.

You might, for example, find your target customers on Facebook. Their posts will give you valuable insights into their needs and goals.

Learn what motivates them

People do not do impulse buying with consultants. They experience “a pain” that causes them to be open to solutions – your solution.

Evaluate your competition

When you did the pricing assessment, did you ascertain what set of services were included in that pricing? Why do you think they would be more attractive to your target clients? How do you intend to counter that?

What is your differentiator?

What can you do or offer that other consultancies don’t? You need this in order to stand out from your competition and position yourself as a leader in the space.

A differentiator forms your value proposition, and your value proposition convinces clients to choose you over the competition.

Develop an outreach strategy

You know where your clients are and what attracts them, but what is your next move? What channels or platforms or a combination of these will you be focusing on?

Be clear in communicating your unique value proposition

You know you’re good – let everyone know that!

State it constantly and clearly in all your messaging on your website, in your emails, on marketing materials, and whatever else has clients’ eyes falling on it.

Do you need a license to start a consulting business?

A license is not required, but proof of professionalism is highly recommended! The Management Consultancies Association (MCA) is the representative body for management consultancy firms in the UK. Its member companies comprise over 50% of the UK consulting industry. The MCA states that its members work with over 90 of the top FTSE 100 companies and almost all parts of the public sector.

How much money do you need to start a consulting business?

Startup costs for new consulting businesses can start at GBP 7, 000, but there is no reason why you cannot start it with a much lower amount. Read our article “What kind of business can I start with zero investment” for tips on starting a business with conservative capital amounts.

Now that you are fully loaded with information, you can map out your business startup plan. You can then decide if you need marketing consultants to assist you and then: press GO!

Learn more about managing a successful business with us at Business Advice, where we give comprehensive business tips and knowledge to get ahead in the game.

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