Starting a consulting business is a dream for many. If you’ve built up knowledge and expertise as a professional, you may have aspirations to run your own show and share all you have learned with others one day. For a fee, of course.
In this brief guide, we’ll explain the process of starting a consulting business so you have a better idea of what is involved. By the end of this guide, you will be familiar with the business building blocks you’ll need to put in place before you can get started.
What Is A Consulting Business?
Let’s first clarify the term consulting business. It’s a business that provides expert advice, strategies, and feedback to other businesses and individuals for a certain fee. The consulting business can be in various niches, marketing, engineering, management, design etc.
Selling consulting services in your niche requires you to have expert knowledge in the field you offer those services. A knowledge that is valuable to companies, departments, or individuals. However, consulting is much more than giving expert advice. It includes various activities like data collection, problem diagnosis, strategy building, training, feedback, and implementation.
Choose The Business Model
Before you dive into the consulting world, you need to choose the business model first. There are various models to choose from – a solo consultant, consulting firm, productized consulting model, and hybrid model. We’ll talk more about each model below.
- Solo Consultant – you will be working for yourself as a self-employed individual, either as a sole trader or Limited Company. You might also work with associates or as a contractor to larger consultancy companies.
- Productized Consulting Model – you will implement your skills and expertise into a productized service, for example, turning your training package into a membership service and online app that clients can subscribe to.
- Consulting Firm – you will employ others to bring together full-service teams to work on client projects;
- Hybrid Model – a mixture of all of these.
Choose The Niche
Consulting is about applying your expert knowledge, so you’ll be constrained by your particular area of expertise. But try to narrow your focus into a specific segment of your potential market, rather than trying to be everything to everyone. For example, if your area of expertise is financial management you will have much more value to potential clients if you are focused on a particular industry or sub-sector like the entertainment industry or aviation.
The next step is the validation process. You need to talk with people in the niche and learn about the challenges they face. It is also recommended that you work with a consulting coach. Then, you can start searching for potential clients.
Face-to-face networking is usually the most effective tool for high-value consulting. Try to get in front of potential clients at industry events, through newsletters, speaking on platforms, and so on. Linkedin is also essential for consultants, make sure your profile is up to date and polished and that you post regular updates and engage with clients and potential clients on the platform.
Make sure you work on your pitching since it’s essential in acquiring clients.
Analyze The Market Needs
The third step is to analyze the market needs. The very best way to do this is to talk to potential clients if you can and get to know all about their needs and wants. It can help to put together an ideal client persona, based on those conversations. Conduct library and online research as well on trends within the industry to help you to spot emerging opportunities.
Use Of Platforms
Depending on the nature of your consulting business, it may also be worth considering using online services platforms to gain commissions. Platforms like Upwork and PeoplePerHour can help professionals in several areas to make connections and gain work. They are particularly good for: software engineers, writers, marketing professionals and designers.
Business owners that grow their business organically have one main advantage compared to others – the clients can refer them to their network.
Invest In Tools and Support
As a consultant your toolkit will depend on the nature of your work. But the core package for every consultant should include a company website and a CRM (customer relationship management) package. Consultancy is about relationships first and foremost. Gaining those first customers is the hardest step, repeat custom is the name of the consultancy game. Keep them happy and keep them coming back.
It is well worth outsourcing business support tasks, such as accountancy, so that you can maintain focus on client work.
Choose your place of work depending on what works best for you. That may be having a dedicated office, using a co-working space or working from home. There is usually no need to rent smart offices to impress clients as they usually prefer you to come to their premises or indeed to liaise online.
The final step in starting a consulting business and operating it successfully is preparing a winning client proposal. This should include an understanding of the brief, a step-by-step methodology, delivery milestones, short biographies of your team, and your fee proposal. If at all possible aim to have a meeting with the client before you write the proposal, so that you can discuss the brief in detail and make sure that you fully understand what they want to achieve. Ideally, this conversation will also enable them to reflect on and improve the brief.
It usually takes time to build a consultancy business. The early months or years can be volatile with busy periods punctuated by periods where there is no sign of work. So it is important that you manage cash flow carefully and have financial contingencies in place before you launch.
At the same time, it is worth bearing in mind that the consultancy industry in the UK continues to grow steadily. If you do your homework, build connections and delight your clients, then you will be well on the way to building your own successful consulting business.