How to Start a Consulting Business
Nowadays, anyone can become a consultant. If you have a special skill in a particular field, then someone somewhere is willing to pay. There is no specific qualifications that you need to have in order to start practicing as a consultant. All that you need to do is to discover unique gift that you have. For instance, if you are very good in handling computers and you are able to keep up with the ever changing dynamics of this industry. Including things like hardware and software updates, then you can use that particular skill to your advantage. Read on and learn how to start a consulting business today.
What is a Consultant?
The dictionary defines a consultant as a person who offers expert or professional advice in a particular field of science or business to an individual or organization. In simple words, a consultant actually provides professional services that a client lacks. The main job of a consultant is to consult. That’s it.
There is no unique qualifications, secrets or magical formula that makes one consultant stand out from others. The only thing that makes one consultant to stand out from the other is passion, commitment and ability to demonstrate professionalism in a particular field.
As a consultant, you must be able to demonstrate to clients that you are knowledgeable and you will add crucial value to the subject that want addressed.
There are many fields that you can venture into and render your services as a consultant. For instance, if you have worked for a nonprofit agency for a long period of time and you are an expert in fundraising, then you can use that particular skill to open your own fundraising consultancy.
Consultancy Industry Is Growing
Consultancy is one of the fastest growing businesses. More and more business are now understanding the crucial role that consultants play in boosting business productivity. That is why most of them invest in seeking the services of a consultant. In 1997, businesses in United States spent over $12 billion on consulting. This just shows how businesses are valuing the expertise that consultants bring to their business.
The spokesperson of Association of Professional Consultant in Irvine California, Anna Flower said that the number of calls that they have received from people who want to join the consultancy business over the past few years is overwhelming. “The consultancy market is clearly opening up”, she went on to say.
According to Melinda P, a reputable independent consultant in Arlington, Virginia thinks that more people are actually joining the consultant field because of advance in technology which has made things simple. “The same technology that helped me become a successful consultant is also working for other” Melinda said.
Important Thing To Consider Before Becoming A Consultant
Before you venture into the consultant industry, there are various important things that you need to consider, that is if you want to become a successful consultant. In this section, we are going to tell you important things that you need consider when getting into this lucrative industry.
Licensing and certification
What certifications and licensing do I need to become a consultant? This is a popular question that many people ask. This question does not have a definite answer because the type of certification and license that you need actually depend on specific consultancy that you want to venture into.
Some field may require you to have a special license and certification while others don’t. For instance, if you want to become a fund raising consultant, then you need to have a special certification.
However, if you want to build your reputation, then you can obtain certification from the National Society of Fundraising Executive.Some states may also require you have special licensing and certification while others don’t. It is therefore important to first check with the relevant authorities to know specific requirements that you need to meet.
Make sure you are knowledgeable
Before you start advertising your consulting service, it is crucial to ensure that you have necessary skills needed to solve crucial problems that your target clients face. For instance, if you want to be a computer consultant, then make sure that you are knowledgeable and up to date with latest trends and changes that occurs in the computer industry.
Make sure you are well organized
This is a very important factor that many people usually overlook. If you are not well organized, then you will have a hard time rendering your services to your clients you need to stay organized and have good time management.
Networking is critical
As a consultant, your profession largely depends on networking. If you want to become a successful consultant, then you must be good in networking.
You need to set short term and long term goals
Just like any other profession, consultancy requires you to have both short term and long term goals. However, ensure that you set well defined goals that are realistic and attainable.
Top 20 consulting businesses that are thriving today
All businesses, big or small having accounting department. Proper accounting is crucial for the success of any business. Therefore, if you start an accounting consultant firm, then you can be sure that you will have steady flow of clients.
A business can only be known through good advertising. Advertising is crucial for every business that wants to expand and grow. If you establish yourself as an advertising consultant, then businesses will hire your services to help them develop a strategic advertising campaign.
Every business, small or well established needs to conduct auditing to know if the company resources are used well. It also help the business know if it is making good progress or not. Therefore, if you are a good auditor, then you can set up an auditing consultant firm. If you render quality services, then you will never run out of jobs.
If you are good in creating brilliant business ideas that are realistic and profitable, then you can establish a business consultant firm. There are many people looking for consultant firm to help them establish a profitable business and will be happy to seek your services. Business consultant is the second most sought after type of consultant. It is second to computer consulting.
One of the greatest challenge that many businesses have is writing a good business report. If you are good in business writing, then you can make good money from your skill by starting a business writing consultant firm. If you have excellent writing skills, then you will have steady flow of clients looking for your services.
The fact is that most people are confused on which career path to take. If you are good at counseling people about career choices, then you can start a career counseling firm and help people make the right career choices that they will be happy and productive. Career counseling is very lucrative.
In order for business to thrive, good communication is needed. Both small and large businesses need to communicate with each other on a regular basis. They also need to communicate with their clients. If you are an expert in communication, then you can create a communication consultant firm to help businesses seeking communication advice.
Every business is digitalizing their platform. This has made computer programming the most sought after type of consulting today. If you are good at what you do, then the biggest challenge that you will face is not having enough hours to meet endless customer demands.
If you are an expert in the editorial field, then you can make good money from rendering editorial services to business. There are many businesses out there looking for editorial consultant services to help them in crafting corporate annual reports, newsletters among many others
Executive search/ headhunter firms
If you are an expert in this field, then you can make good money by helping organizations finding top quality talent.
Over the past few decades, the demand for gardening services has skyrocketed. You will not only get business clients looking for gardening consultant services but you will also attract individuals who are too busy to take care of their garden by themselves. This means that you will have two types of clients to deal with.
Are you a pro in writing grant proposal? If yes then you can start a Grantsmanship consultant firm and earn good money by writing grant proposal for your clients.
A business cannot operate on its own. It actually need people to run it. Issues are bound to arise in places where group of people are working together. If you offer human resource expertise, then you are guaranteed of constant supply of corporate clients both in well-established and small businesses. Clients will task you to help them prevent employer-clients conflicts as well as employer – employee conflicts in work places.
A basic need to many people. If you are a professional in matters concerning insurance, then you can give your clients professional advice on how to find the best insurance plan as well as pricing.
If you are good in creating a good marketing plan, then you can take advantage of that skill to make good money. Marketing plan is a crucial component of any business and can determine its success. If you can help businesses make good marketing plan or give them unique marketing ideas, then you can make good money when you start a marketing consultant.
A company that has employee must have a payroll management system. If you are good in creating an efficient payroll management system, then you can help businesses establish a payroll management system and get paid for that. Many businesses are searching for this service.
Public relations is a crucial component of any business. In fact, all businesses want to get as much air coverage as possible because it makes more people to know about their brand. When business find a good public relation consultant, most of them usually stick with them for life. Therefore, if you are good at PR then you should start a PR consultant.
If you know how publishing industry operates and you think you can add something valuable to your clients, then you can start a publish consultant firm. As a publishing consultant, your role will be to help business when they are ready to launch a new magazine, newspaper, a newsletter or even websites.
All businesses need to pay tax. In fact, business that fail to pay tax as required usually fall into big trouble with the government. That is why tax consultant are in demand. If you are an expert in matters concerning tax then you can start a tax consultant firm and give business professional advice on matters concerning tax so that their business is not affected.
Do you have good writing skills? If yes then that is a valuable skill that you can use to make money. There are thousands of companies looking for individuals with good writing skills. You will get endless supply of corporate clients knocking at your consultant firm.
Why It's Crucial to Identify Your Target Market
You can have a good idea but if you don’t have clients to serve then your ideas are not helpful. That is why it is very important to correctly identify your target market. Sit down and conduct your own research and identify businesses or people who are willing to pay for your expert advice. Make sure that you clearly identify your target clients.
For instance, are you planning to market your consultant firm to small or large corporations? Or are you targeting nonprofit organizations? Before you even think starting your own consultant firm, take your time to prepare a business and marketing plan. This way, you will clearly identify clients who are not only looking for your services but are also willing to hire and pay you for services rendered.
Why Organizations Hire Consultants
One of the main reasons why organizations hire consultants is because of their expertise. That is why it is very important for consultants to demonstrate that they are really good in their respective fields. Organizations not only consider expertise but they also check the consultant track record. It is therefore very important as a consultant to be consistent in delivering quality services to your clients. When clients hire your services, they will not only do so because you claim you are an expert but also because your track record shows that you are reliable.
To identify problems
A consultant can also be hired to identify critical problems that an organization is facing. Sometimes it is usually difficult for employees to identify problem that is too close to them. That is where a consultants thrive. As an outsider who is an expert, a consultant will quickly and correctly identify problems that an organization is facing.
Supplement the current staff
Many organizations are doing their best to cut operational costs. That is why many of them prefer to hire consultants when certain services are required instead of hiring permanent employees. This strategy helps them to save a lot of money that they would otherwise have paid for benefit. Although consultant fee is normally higher than salaries paid to employees, the fact that they are only hired when they are needed make them more economical.
They act as catalyst
Many people especially in corporate America don’t like change. They usually see it as threat. However, sometimes change is crucial and the best to trigger change is by hiring a consultant. As an external member or outsider, a consultant will perform his/her services without worrying about issues affecting the organization such as employee morale or corporate culture. The consult will institute change without fear or favor.
To provide objectivity
Employees who are used to organization culture can sometime fail to be objective. That is why organizations hire a consultant. The consultant will add fresh viewpoint without worrying what other employees in the organization will think about the result or how the results were achieved. The consultant will stay focused on the issue that he/she was hired to address.
Consultants are also hired to educate and equip employee in particular organization certain skills. For instance, a computer consultant can be hired to teach employees on how to use a new program. There are many skills that a consultant can teach employees. However, the consultant must constantly educate him/herself to keep up with new trends and discoveries in his /her field of expertise.This is because the consultant will always be tasked to teach clients things that will help them stay competitive.
To perform dirty work
Very few employees will be willing to implement change that sheds stuff off. That is why many organizations hire consultants who have no connections with other employs to do the dirty work.
To bring new life to the organization
Sometimes the productivity of an organization may decline because of lack of creativity and motivation. A consultant will bring new ideas that will bring life to the organization.
To create new business
A consultant may be hired to help an organization create new business. The consultant will be task to develop and unique and creative business idea that will attract target customers.
To influence other people
They say that hanging out with successful people can also make you successful. The same thing also applies in organizations. When employees hangout out with a consultant, they can fell motivated and encouraged. Consultants can help influence other people within the organization.
Location and Employees
You don’t need to have large capital when starting your own consultant firm. If possible, you should not operate from home. However you should check with your local authorities as well as consult your attorney to know what the law requires when starting your own consultant business out of home.
Benefits of Having a Home Office
Low overhead expenses
When you have a home office, then you won’t have to worry about paying utilities bills or salaries.
Having a home office will give you the flexibility you need to operate at your home. You can set the hours that you are comfortable to work and also take time out as you wish.
No rush hours
When work from home, you will not have to worry about traffic that is usually common during rush hours.
The IRS has a soft spot for people who work from home. However, it is crucial to check your income tax preparer to know if you actually qualify for this deduction.
When you start a consulting business, you will first be able to handle every aspect of the business all by yourself. However, as your business starts to grow, you will need additional staff to help you handle administrative tasks so that you can focus on the most crucial aspect of your business and that marketing your business and signing up new clients.
When that time finally come when you decide to look for additional staff to help you in administrative work. There are many options that you can choose from. For instance, you can take a quick look at yellow pages to know the number of small secretarial support firms available.
The rates that you will pay will depend on type of service that you are seeking as well as the size of your organization. Although it is recommended that you shop around before you make your final decision on which secretarial service choose, it is not prudent to choose a service just because it offers the lowest rates. In fact, cheap always turns out to be expensive.
The best thing to do is to ask for referrals from consultants who have already used their services or seek advice from small business owners. Ensure that you choose secretarial service that is reliable and offer quality services.
As your business continue to expand, you will eventually find it necessary to hire someone to work with you in the office. The person that you hire to handle your administrative tasks in the office is very important can determine if you are going to attract more clients or lose even those that you already have. If you get the right person, then below are benefits that you will get:
You will save your time and money
When you have someone to handle your administrative tasks, you will have more time to focus on recruiting new clients.
You don’t have to be present at the office
You when hire someone to help you, then you don’t have to be in the office all the time.
You will get another prospective
Being in the office alone is boring. You will do things the same way over and over. However, when you hire someone to assist you, then you will get another perspective that will make the office livelier.
Income and Billing
Once you make that big decision to start your own consulting business, you need to determine the amount that you will charge your clients. This is a very crucial aspect of your business and if it is not well thought of, then it can be the down fall of your business.
If you charge to little, then you won’t be able to make enough money to pay your bills and salaries. On the other hand, if you charge too much, then you will scare away clients. Before you set a price your services, it is important to first see that rates that your competitors are charging that set competitive rate that is within the market range.
Before you take any project, list down all expenses including miscellaneous things in your fee proposal. Do not overprice the miscellaneous figure in order to make good money.
Find out what other consulting firms within your field are charging. You off course don’t want to set a price that is too high or too low. Ensure that you set prices that are competitive but sustainable for your business. If you live in a small town where you have no competitors, be happy but charge your clients reasonable fees. When setting your fee rates, there are several factors that you need to consider including:
You need to be very careful when setting hourly fee because when your hourly fee is too high then you will scare away clients. On the other hand, if they are too low then clients will think that you are offer low quality services and they therefore avoid you. One thing that you should always keep in mind when setting up your fee is that the more clients pay the higher their expectations. Some clients to be charged per hour while other prefer to be charged per project.
If you charge per project then you will be paid a fixed amount of money for a certain period of time.
If you work on a retainer basis, then it means that you set a monthly fee where you agree with your client that you will avail yourself for an agreed number of hours. However, most companies who hire consultants on a retainer basis usually set a condition that you should not work for their competitors. One of the main advantage of using his methods is that you are guaranteed of monthly income which is good when starting your own business.
Your consulting business is as good as dead if you don’t have clients. Remember that consulting business is not like selling a house or a car. In your case, you are selling service that people are probably not aware that it exist. This makes it even more complicated. There are variety of marketing techniques that you can use to convince the client to take an action. They include:
Your brochure need to address the following issues:
- It should clearly define the services that you offer
- It should tell the client why you are the best
- It should give reason why clients should hire you
- It should include a brief biographical information
It should include little information about clients that you have worked with
Ensure that you keep the brochure short and precise. Ensure that it contains all crucial information that the client needs to know before you send it because the success of your consulting career depends on it.
Below are tips to use to make cold calling work for you.
Prepare a scrip in advance
You need to know the exact words of what you need to say before you call someone. Remember that your main goal is to eventually get a face to face interview. You therefore need to come up with a good script and practice it over and over.
When you make cold calls, your call will most likely be picked by an administrative assistant or secretary who has experience is ignoring cold callers just like you. However, the trick here is not to give up. You will fail the moment you give up.Be creative and come up with ways to avoid your calls being pricked by the secretary. For instance, you can try to call before the secretary reports to work or after he/she has left work. This way, you will increase your chances of the call being picked by the person you are targeting.
Limit your calls
Don’t call very day, instead, you should limit your calls to just few days of the month.
Your advertising budget will determine your advertising ability. Adverting is very expensive and more often beyond reach for those who are starting. That is why most people usually rely on word of mouth. Before you spend your money on advertising, take time and analyze your competitors ads then design one that will stand out better.
You can also use newsletters to attract potential clients. If you don’t have time to create a newsletter for your business, you can hire a graphic designer and a freelance writer to do the job for you. The newsletter does not have to look expensive and classy. Just make it simple. Focus more in giving quality content that will capture the attention your target audience. Check your competitors to get an idea of what you should include in your newsletter.
Public speaking is another prudent way to attract new clients and earn good reputation. If you are a good public speaker, then you can use your gift to market your consultant firm to your target audience by attending various events within your town such as dinners, luncheons among many other special occasions.
Ask for referrals
This is a very effective method that is often overlooked by many people. All that you need to do is to offer quality services to all your clients. Then once you have establish good relationship with your clients, then you can ask them to refer you to their friends, colleagues and family members. Referrals can help you get serious clients without so much hustle.