If you have experience in a particular field, you may want to get into consulting as a way to bring in some extra money (or even as a long-term career option). A consulting business can be a very lucrative business for individuals seeking to lend their time and efforts to help organizations and people succeed. As with any business, those seeking to establish a consulting business should first come up with a powerful and effective name for their business, register their business with the state and local authorities, and choose a business structure for their consulting venture. Especially with the freelance economy boom, freelance consulting is becoming very popular, so many consultants operate as sole proprietorships; however, with the right business strategy, you can turn your freelance consulting gig into a more established venture. With the right business planning, a freelance consulting side hustle can turn into more long-term work or even a consulting firm or agency and can help you network and gain essential career connections.
Interested in starting a consulting business or firm? Read on to learn more about consulting, becoming a consultant, and how to start a consulting business.
What Is Consulting?
A consultant is an expert in a specific field or industry who advises others on best practices in that field or industry. There are many different types of consultants who work in many different industries such as business advisory services, writing, and computer consulting.
What Does a Consultant Do?
The job of a consultant is, as the word itself indicates, to consult: to provide advice and insights based on their expertise. Companies are often willing to pay consultants a lot to gain their useful knowledge, which is why consulting can be such a money-making business.
Why Do People Hire Consultants?
Consultants are hired for many reasons, the most obvious of which is to bring their expertise to an organization to help advise the organization. This can help the organization save a lot of resources – i.e., time and money – in the long run, as the consultant helps the organization operate better and more strategically. A consultant can also be hired to identify and resolve problems; supplement a company’s staff; teach employees a specific skill; offer tips and advice; enact corporate changes, such as implement a new business strategy or determine which employees must be laid off; and generally act as a source of a fresh, objective, and new viewpoint for an organization.
Organizations may seek to hire one or more consultants in different fields. Some popular fields for consulting businesses include accounting and finance, marketing and advertising, writing and editing services of various types, career counseling, computer, and information technology (IT) consulting, human resources (HR) consulting, business consulting, public relations, and taxes.
How to Start a Consulting Business
Interested in how to get into consulting? Here are the first steps you will need to take to establish your new consulting business:
1. Determine your niche.
Think about what you can offer your clients. For example, if you have several years of experience in a particular field, such as brand strategy, you can offer business marketing consulting services to help companies best leverage their brand. If you have an advanced degree in a scientific field, you can offer scientific advisory services for companies seeking to perform or explain scientific concepts in an easy-to-understand way. For this step, you will need to carefully consider your skills and experience and how you can offer these services to potential clients for their benefit. People are happy to pay for a service that makes their lives easier, especially if it is for a service that they cannot readily perform on their own.
Like all businesses, successful consulting businesses operate within a specific niche. You will need to take the time to determine your consulting niche. Especially in the early days of your consulting business, you will want to ensure that your niche is very well-defined; when you have a more established business, you may want to reevaluate your service offerings at a later date. So, think carefully both about what you already know, and what people need, and use these insights to determine your niche and target market. You may also consider what services you have offered to people in the past, and may wish to obtain new skills through online courses or real-world experience to improve your consulting offerings.
2. Once you’ve determined your consulting business idea, develop some talking points.
Think of the talking points you will devise as a way for you to quickly and succinctly communicate what services you can offer to your clients, and why they absolutely need them. These talking points should also explain what sets you apart from similar consultants in your particular field. Make sure to focus on the value you are bringing to their company and what they can gain from utilizing your services. You will want to practice these talking points and go over them with trusted friends or family members to help you hone in on your message.
Remember, also, to practice active listening in discussions with potential clients when discussing your talking points, as a good consultant must also be a great listener in order to ensure that their clients’ needs are met as best as possible.
3. Figure out a billing strategy.
Most consultants bill their clients by the hour. Therefore, consider charging an hourly rate. You can gain insight into what your consulting fees should be by checking out the websites of competing consultants in your area. It is best to start with a low price to be more competitive in the consultant marketplace, but you may also choose to offer premium services at a higher price tag. You may even consider meeting with a small business consultant for help with planning your rates, fees, and overall pricing structure, as well as to gain insight into how you will need to file taxes for your desired consulting business structure. For freelance consulting, remember that while it’s best to start small, you will need to set your fees high enough so that you can set aside money for taxes and retirement. There are several web and software planning utilities available for entrepreneurs that can help set an overall budget and billing strategy to ensure that the revenue you bring in is enough to pay the bills.
4. Determine how you will market your services and attract clients.
As an entrepreneur, you are tasked with many decisions in the establishment of your new consulting gig. An important part of your business plan is how you will attract clients and market your services to the public. You will want to consider both paid marketing, in which you pay for advertisements on the web, newspaper, tv, or radio, as well as organic marketing, which refers to the act of getting customers to come to you naturally over time. For example, many freelance consultants rely primarily on organic marketing, which they obtain from promoting their services on social media or freelancing websites. Organic marketing can be cheaper than paid marketing for consultants trying to save money in the early stages of their business venture and can help boost your visibility. Paid marketing, which includes paying for advertisement space, can allow business to advertise on sites such as Google. Think carefully about what type of marketing you will use to promote your service and build a client base.
To determine how best to promote your services, you may need to do some market research on your potential clients. Of course, you will need to market your services to your ‘niche.’ Determine who is most likely to utilize and benefit from your services and the best way to market your services to them.
For example, if you are an attorney seeking to work as a legal consultant, you may want to contact several corporations, as they often use legal consultants instead of law firms in many cases. As a legal consultant, you might consider reaching out to several corporations to determine whether they can benefit from your services.
There’s never been a better time to start a consulting business, especially for individuals with deep knowledge in a specific field. The advantages of consulting and its lucrative nature make it a highly attractive option for many seeking to work independently while still utilizing their career skills and expertise. The advantages of consulting include low overhead costs and the potential for working from home (e.g., as a self-employed consultant), which offers a great amount of flexibility. Consultants who work from home can claim their home office expenses as tax deductible.
Consulting is a great way for career professionals to offer their insights to organizations seeking to get ahead and thrive and make some serious cash, as well as industry connections while doing so. Because many consultants typically set an hourly rate, consulting can pay very well for the time invested. Individuals who start consulting in their spare time can eventually develop a broad clientele and, over time, become more established and open a formal consulting firm or agency.