How to Start a Consulting Business

by Thom Tracy

4 min read

Business consulting is one of the simplest small businesses to set up, but that doesn’t necessarily make it one of the easiest small businesses to achieve success. If you’re considering launching a career as a consultant, there is a marketplace trend in your favor; the field has measurably expanded in recent years, with businesses spending tens of billions of dollars for a wide range of consulting services.The keys to creating a successful consulting business are having a marketable area of expertise, being able to sell yourself and your services, and approaching the marketplace with a solid business plan.

Expertise

A consultant is an expert in a field who offers their expertise in an advisory capacity to businesses or individuals. To start your consulting business, all you need is a marketable level of expertise in a chosen field. Among the most popular consulting fields are marketing, internet technology, human resources, public relations, and fundraising.Many consultants are individuals who have acquired substantial knowledge and experience in the workplace. For example, it’s not uncommon for someone who has worked as a director of human resources to eventually become a human resources consultant. If you don’t already have expert-level knowledge and skills, you may be able to acquire them. Many social media consultants – a field increasingly in demand – are self-taught individuals who have simply honed their skills in using social media to an expert level.

Handling Finances

Consultants must handle the basic financial aspects of their business. You can simplify bookkeeping and accounting tasks by using an accounting software program such as QuickBooks Online. As your business grows, tracking billable hours and expenses, managing invoices, cash flow, and accounts receivable becomes more complex and potentially much more time-consuming.Save time and money by using an accounting program right from the start, even when your expenses and revenues are fairly small and simple. This will eliminate the necessity of having to input and organize much larger amounts of information later. Being able to easily produce professional-looking invoices can help boost your business by conveying the impression that you’re an established professional even when you’re not much more than a part-time freelancer.Many small businesses fail as a result of failing to attend to basic financial tasks, such as keeping expense records and collecting payment. It’s important to view handling your business finances as a vital part of your job. Approach financial management in a well-organized manner – for example, setting aside one day each month to review outstanding invoices.Take care of business basics like acquiring necessary business licences, insurance, and a business telephone number and email address.

Marketing

Regardless of your expertise and skill, your consulting business won’t be a success unless you secure clients who are willing to pay for your services. In addition to your consulting skills, you also have to work to develop marketing skills.You have to continually be working at marketing yourself, making new contacts, generating and following up on leads, building your brand identity, and strengthening client relationships. Networking and actively soliciting referrals and endorsements from previous or existing clients are important marketing activities, because word-of-mouth advertising and referrals are often a primary source of business for consultants.Basic elements of your marketing plan should include creating a business website and business accounts on social media platforms. Other marketing efforts may include attending networking events and creating a business brochure or portfolio to show prospective clients.

Putting Together a Business Plan

All of the business activities outlined above should be part of an overall business plan that you draw up and write out – a road map for moving your business forward, covering the time frame of at least the next year or two. Having a well-thought-out business plan is one of the factors that often makes the difference between successful and unsuccessful businesses. Having clearly defined business goals makes it much more likely that your business will grow and achieve those goals, since it provides you with a clear focus on what you want to accomplish.An important element of your business plan should be revenue projections. You need to figure out such things as how many hours you have to work, and at what rate per hour, to make your business a profitable venture. In making projections, don’t assume that all of your work hours will be billable hours; you will spend a number of hours each week on activities such as marketing and record-keeping.Other aspects to include in your business plan are a way to reach your target, your ideal clients, and accurately forecasting and planning out your expenses.You can make your consulting business a success by carefully planning out all the necessary activities, such as handling finances and marketing, involved in establishing and growing your business.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

What’s Changed in the New QuickBooks

The new QuickBooks Online bookkeeping software has gone through quite a few changes. As…

Read more

Checklist Before Leaving Your Job to Become Your Own Boss

So you’re thinking of quitting your job to become your own boss. In other…

Read more

How to Start a Consulting Business

If you’ve worked in a specific industry or field for any length of…

Read more