Define your expertise, research competitors, set pricing, and structure your consulting business effectively. This step-by-step guide covers key actions for a successful launch.
By Brad Nakase, Attorney
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Establishing a consulting business is a wise decision, regardless of whether you’re starting it as a side gig or as a new professional path. It’s relatively simple to get started because of the low overhead and initial costs. Moreover, you can use your existing industry network to get your initial customers.
Are you prepared to enter? These are 11 simple actions that you can execute to launch your consulting firm.
Starting a consulting business means that you are the item that you are trying to sell. Your knowledge will be compensated for by clients. The first step is to decide what you are capable of providing. That will influence your company’s marketing and planning.
Consider the value you can offer your clients right now and make plans to add to that value later. Dividing your audit into three parts:
A. Skills & Certifications
Regarding your target specialization, what specific qualifications and abilities do you possess? What more business acumen can you apply to help your clients?
For example, Annie aspires to work as a studio potter’s consultant. She has the ability to teach classes, maintain and operate a small-to-medium-sized studio using best practices, and do all the practical components of pottery creation, such as throwing on a pottery wheel, pruning, glazing, and fire. She also has extensive experience selling pottery on the Internet, in stores, and at craft festivals.
In addition to her business administration diploma, Annie holds an MFA in ceramics. So, in addition to having extensive and in-depth knowledge of the ceramics industry, she also has a formal education in business.
B. Experience
For numerous consultants, experience is a key selling feature. Which consultant—one with ten or thirty years of expertise in your industry—would you pick if you were hiring one?
But it’s more than just time; experience encompasses both your past experiences and your actions. Which clientele you market to may change as a result of this. For example, whether you are more likely to be working with aspiring business owners or huge offices reorganizing their workforces depends on whether you are managing a division within a large firm or operating a small company of your own.
In addition to her pottery experience, Annie emphasizes her business background. Prioritizing this is more important than simply demonstrating your skill and ability to turn a profit. Ultimately, your clients are also striving for that.
C. Space for expansion
In the last portion of the audit, you will find information about areas for professional and consultant development. The purpose of this part is for your personal planning, not to attract clients. You can broaden what you can offer customers and possibly break into new market niches by consistently improving your skill set.
Annie is an expert in both stoneware and earthenware, two popular forms of pottery. However, she has had the opportunity to explore porcelain during a number of artists’ residencies. Porcelain employs a unique, rigid kind of white clay and flames at temperatures far greater. She makes the decision to apply her porcelain-making abilities to her own work and keep improving them. She will be more equipped to consult with studios that use that medium as a result.
She is also aware of how social media has influenced the sales and marketing strategies used by potters. Annie makes the decision to invest time and money the next year to earn an Online Marketing Certificate, which will enable her to better advise companies that primarily sell online.
You must learn the ins and outs of the business before you start it. This entails investigating rivals and customers.
A. Study consulting firms’ competitors
After deciding on a consultant (in Annie’s case, studio potters), you should look for consultants who serve the same clientele.
Make a list of other businesses first. After that, search for:
B. Research possible clientele
Knowing what prospective customers are already saying will help you determine what they are searching for. Some methods for doing that:
C. Crack the Rolodex open
If you’re well-known in your field, you probably know someone you can ask for assistance from. Annie may contact her buddy Kevin, who owns his own pottery studio, and do an interview with him. In a consultant, what qualities would he seek? Which aspects of his company most require his advice?
Additionally, you might want to find out whether any of your associates have previously hired consultants. They might be able to share with you what went well and what did not, as well as their experience and the things they would do differently if they could go back and alter anything.
D. Consult with experts in related subjects
Make an effort to get in touch with other consultants—not rivals, but those in related fields.
For example, several of Annie’s contacts own textile studios. They make and sell their own goods, teach workshops in-house, and accept commissions from customers, just like her. Several textile artists have also benefited from the guidance of some of them.
These business entrepreneurs can be contacted by Annie to discuss their experiences serving as mentors and the way they were able to use their own business expertise to provide their customers with practical guidance. She can use that to plan her individual services.
E. Explore online forums
You can learn about the topics that prospective customers are discussing in online forums.
Pottery Entrepreneurs is the group to which Annie belongs. Despite her limited usage of Facebook, she chooses to delve deeply into a year’s worth of discussion subjects in order to conduct research for her business.
It turns out that many studio potters struggle to create their own ceramics for their customers and retail establishments while juggling their teaching schedules. Annie makes the decision to help her customers manage both revenue sources for their studios as one of her valuable propositions.
F. Attend local events to grow your clientele
It’s time for some fieldwork. Meetings in reality can be a terrific method to learn about the issues that prospective customers are facing and how to reach them.
Excellent prospective locations include business seminars, workshops, networking events, and meetings of an area business association. Try Meetups.com for a more relaxed experience that is also free to use. In some industries, like restaurants, you might be able to discover a meetup where regional entrepreneurs gather to talk about business and socialize.
Requesting quotes from other consultants is the best way to determine your pricing. You will get a sense of what customers are prepared to pay depending on the experience or reputation of the experts once you have gathered quotations from as many of them as you can.
Since your company is still in its infancy, you will not be allowed to charge premium rates. That being said, aim for mediocrity or slightly below average. Once your clientele is established, you can always raise your prices.
Each customer you take on can be billed in one of three ways: hourly, project-by-project, or retainer. For some clients, some approaches might be more effective than others. Be prepared to onboard prospective customers from the beginning by determining your favorite approach and your degree of flexibility when using alternate methods.
Retainer contracts often have provisions that prohibit you from concurrently working for your client’s rivals, which could reduce your total revenue.
A business plan serves as your company’s roadmap. It provides you with information about your current location as well as your future goals. You can also use it as a guide to help you make decisions in the future.
Your company plan is crucial not just for guiding your decision-making but also for future applications for small business loans and credit lines. It’s a good idea to have your company plan ready right away, even if the objective is far off. That way, it will be ready when you require it.
Your company’s structure has an impact on how you file and pay taxes. In the event that your consulting business is sued or is unable to pay its debt, it also establishes your obligation, or whether your private possessions are at risk.
See our business forms guide to determine the best form for your consulting firm.
Your consulting business’s structure and whether you plan to use a name apart from your own will determine whether you have to sign up a name. The complete step-by-step is in our main post on how to launch a business.
Establishing a business banking account is advisable, even if you operate as a freelancing sole proprietorship. As a matter of fact, a company bank account might be advantageous even if the consulting business is a side gig.
Your personal and corporate assets can be clearly distinguished with a separate account. This makes bookkeeping and submitting tax returns for small businesses much easier. For example, you won’t have to work as diligently to take benefit of tax deductions since your business account will be used to cover all of your business expenses.
Whether you need a license to start your consulting business depends on your state. The primary kinds of small business permits are covered in our guide on how to launch a business.
Make an investment in the most suitable tools for your position right away to ensure that your consulting business operates successfully from day one. They consist of:
You won’t be riding a motorcycle and jumping across school buses all day long as a consultant. Therefore, why should one be concerned about insurance?
If a disappointed client files a lawsuit against you, business insurance may protect you. In the event that you miscalculate wages, it can protect you from employee lawsuits. Even in the case of severe weather, it can safeguard your home office.
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