Maria Peloponisiou~ 4 min Reading time | 08. Aug 2019
Are you an expert in a particular ﬁeld? Do you love problem solving and oﬀering advice and solutions? If you’re thinking about starting a consulting business, the answer to these two questions is often a resounding “yes.” Yet starting a consulting business isn’t as simple as just being an expert—depending on the ﬁeld, you may need certain licenses to be a consultant, and you may also want to consider brushing up on your skills if your expertise is in a ﬁeld that has evolved rapidly. Technology has made it much easier to become a consultant, which makes it easier to get started, but more diﬃcult to stand out from the crowd. If you have expertise you’d like to make work for you, here is how to start a consulting business.
What is a Consultant?
A consultant is an expert in their ﬁeld, who sells their time to oﬀer advice to individuals and businesses that need it. Business consultants are the ﬁrst type of consultant that comes to mind when people think of the term—it often conjures images of someone hired to streamline operations, resulting in layoﬀs and restructuring. However, often consultants have speciﬁc industry knowledge or have worked in a particular industry for several years before they decide to do consulting work. For example, an IT consultant may have turned to consulting work after several years in the industry, or a tax consultant might turn to consulting work as a result of their depth of knowledge about tax law. Legal consultants often have a law degree and experience as attorneys, and possibly an MBA.
How to Start a Consulting Business – Things to Consider:
1. Qualiﬁcations and Accreditation
Starting a consulting business may not oﬃcially require you to be certiﬁed, but getting certiﬁcation can help your credibility. If you already have a business degree and are interested in management consulting, for example, you may want to consider working towards a Certiﬁed Management Consultant certiﬁcation to help you stand out from the crowd. If you’re interested in being a marketing consultant, you may want to make sure you are aware of the latest software and marketing tools to help your clients make the most of their online presence.
If you’re giving businesses and individuals advice that could impact them ﬁnancially, there’s always a chance the reality of following that advice might not work out the way you’d expected. At minimum, any consultant should consider professional indemnity insurance that covers any ﬁnancial loss clients suﬀer as the direct result of your advice. Additionally, public liability insurance might be a good idea in case your advice causes injury to others or damage to property. Diﬀerent types of consultants may need more speciﬁc types of insurance, so it’s good to research your options before starting a consultancy business.
3. Pricing and Fee Structure
Pricing is another area you will need to look into. In order to determine how much you’ll charge, it’s a good idea to look at your competitors, particularly those who have similar qualiﬁcations and experience. You can choose to charge either hourly or by project, and decide whether you will do work on a retainer basis. You may not be able to charge as much when you’re just starting out, but keep in mind that you’ll be able to raise your fees as you gain more experience. However, just because you’re new to consulting doesn’t mean you should price yourself too low, either. Prices signify value, and a person with very low fees may leave clients suspecting they are less qualiﬁed than other consultants in their ﬁeld.
Who is your target market? What individuals or businesses will seek out your services? What are your strengths that will help you excel as a consultant? These are important questions to ask yourself, as they will inform your marketing strategy. You’ll have to market yourself online and network in person, and knowing the answers to these questions will help you target your time and eﬀort toward the right people rather than trying to spread yourself too thin. If you are a consultant for a particular industry, is there a niche within that industry that you would like to focus on? Gaining knowedge about a very speciﬁc aspect of your industry can sometimes be a better strategy than having a jack-ofall-trades mentality.
If you have worked in a particular industry for a while, you might already have a large network of former coworkers who might be able to help you ﬁnd clients. While it’s not a good idea to seem too opportunistic, mentioning your new business on social media, or in passing to family and friends, will help get the word out. You can also attend industry events and tradeshows where networking is more expected, and make sure you bring plenty of business cards!
Consulting can be a good business opportunity for a person with the right combination of skills and talent—the market for consultants has grown steadily over the past 8 years, particularly for management, tech, and ﬁnancial consultants. But before you start, make sure you have a solid plan backed by research to help you stand out as a true professional.