How to Start a Consulting Business
What is your “genius”?
A question posed by top-selling author Jay Niblick, it asks people who are sick of the nine-to-five grind to consider their unique skills and how they can be molded into a lucrative enterprise. One of the best ways to highlight your “genius”—and earn a sizable income—is starting a consulting business.
Consultants come from a wide range of industries and have a variety of skill sets. Whether your “genius” is social media marketing, relationships or real estate, you’ll find limitless potential.
In this guide, we’ll cover the eight steps involved in harnessing your unique skills and starting your own consulting company.
What Is Consulting?
Consultants offer advice and expertise to individuals, businesses and organizations to help them improve their lives, performance, management structure and more. Consulting services can run the gamut from strategy consulting and financial advising to relationship consulting and beyond.
Although being a consultant is hard work, it’s a fulfilling profession that presents many networking opportunities and massive income potential.
How Much Do Consultants Make?
According to Glassdoor, the average salary for a consultant in the U.S. is $79,526 per year. Most people earn between $53,000 and $119,000. However, consultant salaries vary widely based on the services offered and the type of clients served.
It’s worth noting that consulting can be done completely online, so you may have the opportunity to work remotely and get clients anywhere in the world. Doing so could help you maximize your earning potential.
Benefits of Being a Consultant
The benefits of becoming a consultant go far beyond the income potential. Many aspiring consultants are drawn to the freedom, location independence and the satisfaction of having a company of their own.
Here are the most common benefits of being a consultant:
- Massive earning potential: You can set your own rates and scale up to pursue clients willing to pay more.
- Set your own hours: You can decide when you want to work and how often you want to work. Set your own schedule to have more free time in your life.
- Be your own boss: Aside from customers, you won’t have anyone telling you what to do. You can decide on the people you want to work with and what services you’d like to offer.
- More vacation time: Since you can set your own schedule, you get to decide when you take a vacation or how long you can take off work when you are sick. This way, you can focus on your own health and well-being.
- Tons of networking opportunities: You can rub elbows with people who are industry leaders, form partnerships and land speaking opportunities. Your potential is limitless.
- Work from anywhere: You can work from home, from an office, or from anywhere in the world, as long as you have an internet connection. This may allow you to travel to amazing countries and meet new people while getting paid at the same time.
- Own a passion-filled enterprise: You’ll own your company and have the satisfaction of seeing it grow. You’ll get to help people, make an impact and earn a good income.
Things to Consider Before Becoming a Consultant
Want to start making good money as a consultant? There are a few things you’ll want to consider before starting a consulting business.
- What marketable skills do you have? The role of a consultant is to give people or business owners advice, so you’ll need at least one marketable skill that would provide value to your prospective customers. Think about the things you excel at and whether people would be willing to pay you for expertise. Are you a pro at Instagram marketing? Have experience advising companies on hiring best practices? Know how to start a yoga studio? Find out what your “genius” zone is.
- What certifications or licensing will you need to start the business of consulting? Some industries require consultants to have specific certifications in order to operate. Accounting, for example, usually requires at least an accounting degree. Other industries, like legal or medical, require special licenses. Check your industry, state and federal requirements for the type of consulting you want to offer.
- Are you organized and self-disciplined? Starting a company, in general, takes work. You will need to get your business plan, licenses, marketing and finances in order to run one successfully. You’ll also need to keep your day organized, practice good time management and stay on top of your client work.
- Do you know your long- and short-term goals? Again, starting a new consultancy is no easy feat, so you’ll want to be invested and motivated for both the short-term and long-term. Do you see yourself being a consultant for at least the next six months? Do you have the motivation to launch a full-on consulting career? You’ll want to make sure you have the energy and time it takes to see your new company through to success.
Top 10 Types of Consulting Businesses for 2020
While trends shift from year to year, we’ve compiled this list of the top types of consulting businesses for 2020 based on data from Consultancy.com. These are the types of consulting agencies that are most popular and have the greatest earning potential.
- Strategy consultant: A strategy consultant operates at the top tier of the consultancy market. In charge of advising on corporate and organizational strategy, government policy and more, strategy consultants most often work with the highest level of management at a company. Due to the highly specialized nature of their services, strategy consultants often rely on quantitative data and analytics to provide data-driven, results-oriented strategy. This type of consultancy will likely put you in the highest income bracket of all consultants.
- Management consultant: This type of consultant focuses on all sorts of concerns, including hiring practices, marketing and organizational procedures. They essentially enable companies to run more efficiently, ethically and affordably. Over half of all consultants identify themselves as management consultants, so this is by far the most popular category. However, it is also quite broad, and many consultants hone in on their own unique specialty.
- Operations consultant: Operations consultants also take up a large segment of the advisory sector. They too aid businesses in improving their efficiency, particularly when it comes to operations. Operations consultants often assist management teams in improving performance in sales, marketing, human resources (HR), production and more.
- Financial advising: As the title implies, financial advisory consultants assist businesses and individuals in keeping their finances in order and making informed financial decisions. The majority of financial consultants work for large accounting and consulting firms. Services often include risk management, tax services, filing disputes and even real estate investment consulting.
- Marketing consultant: This is a type of consultant that focuses primarily on marketing strategy, implementation and measurement. They will advise on the most favorable marketing campaigns for a company, analyze results and offer feedback. Do you have ideas that could contribute to growth? You might be a natural at marketing consulting.
- IT consultant: Information technology (IT) consultants assist businesses with their technology, telecommunication and computer systems. They ensure that businesses have the right tools, are using them effectively and have what they need to keep their technology working properly. Within IT, the fastest growing niches are digital, forensics, data analytics/data science and cybersecurity.
- Communications consultant: Communications consultants specialize in helping businesses to better communicate with their employees, and employees to better communicate with each other. This skill is in high demand because better communication ultimately aids productivity, which in turn leads to profitability.
- Career advising: Are you a boss at job interviews, writing amazing resumes or helping people find jobs? Then you’ll make it big as a career consultant. These professionals aid people in finding new opportunities, land job interviews and get hired at their dream jobs.
- HR consultant: HR is an important yet often sensitive area of any company, and many businesses need assistance hiring people and managing their employees. HR consultants manage internal conflict, hire the right team members, transform company culture and ensure that all employees feel supported. They also aid businesses in handling organizational changes and provide learning and development opportunities for their employees.
- Insurance consultant: Businesses and individuals both need insurance, but it’s not always easy to know what insurance one needs. Insurance consultants assist people in finding the right fit, navigate the signup process and plan information, and land the ideal payment structure.
Have an idea for a consulting company but don’t see it on the list? No problem! As long as you are helping customers solve a problem and achieve some kind of result, you can turn your expertise into a thriving consultancy.
How to Start a Consulting Business in 8 Steps
Once you’ve found your “genius”—i.e., the unique skill you bring to the table—it’s time to start turning your passion into a profitable consulting business. All you need to do is hone your expertise, market yourself effectively and bring great results to your clients.
Here is a more detailed breakdown of the steps you can take to start your own consultancy from the ground up.
1. Define Your Unique Selling Proposition
Your unique selling proposition (USP) is what makes you unique from other professionals in your market. While you may market yourself as a consulting business, what makes you the preferred consultant for your potential clients?
Think about the unique skills you possess, your communication style and your experience level. Then, define your USP based on your value statement, the benefits your service provides and the results you’ll generate for your clients.
Your value proposition is the one, main thing you offer your clients. This should essentially be your number one selling point when you market your services to prospects. It answers the question of why someone would want to work with you.
For example, if you’re a financial adviser, your value proposition might be that you have five years of experience advising an enterprise-level company on making informed financial decisions. You can then market yourself as a consultant that’s capable of working with enterprises (something many advisers might not be able to do).
Beyond your primary selling point, what are the other benefits clients can expect from working with you? You might write a laundry list of benefits, which you can highlight in future marketing materials and on your sales calls.
Note that these benefits tend to be qualitative rather than quantitative (which is what we will address in the “Result” section).
For example, for consultants these benefits might include:
- Good manager/employee communication
- Increased productivity and time management
- Better system organization
- Improved company culture
- Peace of mind
What results do you plan on generating for your clients?
Each type of client has a specific goal in working with you. Once you’ve honed in on your niche, it’s your job to uncover what those goals are and help your clients achieve them.
These vary widely depending on the type of work you do. Here are some examples of results you might aim to bring for your clients:
- Higher revenue
- Increased profitability
- More website traffic
- More social media engagement
- Better click-through rates on paid ads
- Increased system efficiency
- More leads
- Greater return on financial investments
Again, you should ask your target market what results they are looking for and what benefits they are looking for in working with a consultant like you. Then, you can fine-tune your offer and USP to appeal to that unique market.
2. Determine Your Target Market
This step takes defining your USP a step further by helping you determine your ideal target market. Many people make the mistake of starting too broad, which increases competition and makes it hard to stand out in a crowded market.
By getting more specific, you can narrow down the competition and speak to the needs of your ideal clients. The more you understand your audience, the easier it will be to sell your services.
This step involves answering the who, what and where of the target market you’re hoping to reach.
Who do you want to work with? What types of individuals or businesses are most likely to want your services? What are their needs, goals and wants?
What services make the most sense for your target market? What services will make you stand out in your niche? What will generate the best results for your clients?
Are you going to serve a specific geographic area? Are you targeting locally, going national or even global? Are you going to have a physical office or offer your services online?
Answer these questions to better define your USP and establish a marketing strategy to reach leads in your target market.
3. Establish a System for Generating Leads
How you market your consultancy will depend where your target customers are and which platforms they use to find advisers like you. This will vary from industry to industry.
The best way to know where to market your company is to ask your target market how they go about finding consultants. You’ll likely discover a variety of platforms and methods you can use to generate leads and ultimately get clients.
Here are a few of the most popular lead generation platforms:
Instagram may be a fun social media platform but it’s also a powerful marketing tool. Taking the time to post consistently good content that appeals to your target audience is one way to draw in potential clients in droves. Instagram is particularly effective for those in the travel consulting, fashion consulting and marketing consulting niches.
Facebook can also be used to generate consultant leads. Post content that engages your audience, highlights your expertise and keeps prospects informed. You can market your enterprise through your personal profile and a dedicated consulting business Facebook page.
LinkedIn is a great way to generate B2B lead generation. If you’re a consultant that wants to work with businesses, agencies or large corporations, you can use LinkedIn for outreach and generating leads.
Like Facebook, you’ll want to post engaging content and form authentic connections. Try to avoid “cold pitching” people by direct messaging them as this can come across as invasive.
Many advisers love the visual, highly-engaging nature of YouTube as a way to attract potential clients. You can post informative videos to attract viewers organically in hopes of landing paying clients in time.
While many of the methods in this list involve organic (unpaid) ways to reach potential customers, these platforms can be slow-moving. If you want more leads, fast, consider investing in paid ads like Facebook Ads, Google Ads or Instagram Ads.
With paid ads, you simply pay a fee for every person who clicks on your ad. While this way does take an initial investment, you’re likely to see results faster than you would with organic marketing methods.
Search engine optimization (SEO) involves optimizing your website to generate organic traffic from search engines like Google or Bing. By targeting certain keywords on your website, you can rank in Google and attract clients who may be searching for services like yours.
Research SEO best practices to find target keywords, optimize your site for these keywords and draw in website traffic as a way of generating new business. Then, you can add compelling calls-to-action to direct users to your contact page.
Podcasts and Interviews
Getting featured in podcasts, interviews and guest blogs is a great way to increase your visibility and attract new clients. This is a smart approach if you are just getting started and don’t have much of an audience yet. Find these opportunities in Facebook groups, through a Google search or through networking.
Need help marketing your enterprise? Consider working with an individual or agency to help your company grow. They will be able to help you establish a unique lead generation strategy for your niche and audience.
4. Have an Enticing Website or Portfolio
While having a website is not a requirement for starting a consulting business, it certainly helps. A website or portfolio gives potential clients a place to learn about your services, see the results you’ve generated for clients and contact you.
Platforms like WordPress, Wix and Squarespace provide free and low-cost templates to help you set up your first website. If you are looking for something fancier, you can hire a web designer to create a custom design.
You can create pages that list your services, publish blog posts and funnel website visitors to your contact page. Use social media marketing and SEO to drive traffic to your site and generate a consistent stream of leads.
How Much Should I Charge as a Consultant?
The costs for consulting services vary widely across niches and experience levels.
If you are just getting started and have limited experience, see what others are charging for similar services. If you have more experience, consider what your services are worth to prospective clients and set a competitive rate.
Many professionals charge per hour or per project. You might charge for a one-off project or on retainer. Research the going rate for your niche and then charge what you think your services are worth.
Once you set your rates and land your first client, you can send professional consulting invoices to get paid quickly and easily. Now you’re in business!
5. Deliver Amazing Results
The success of your business depends on you delivering amazing results for your clients. This will elevate your brand, encourage repeat business and attract even more clients.
Once you start bringing in results for your clients, you’ll want to measure important key performance indicators (KPIs) and start building case studies.
KPIs are the metrics businesses use to track growth and success. As a consultant, one of your responsibilities may be to monitor these KPIs and report on progress.
These KPIs might include (but aren’t limited to):
- Website traffic
- Social media engagement (e.g., likes, shares)
- Email open rates
- Lead close rates
- Customer acquisition cost
- Cost per click (on paid ads)
- Gross margins/net margins
- Revenue growth
- Employee satisfaction
In working with your clients, ask them what KPIs are most important to them. Then, use tools like Google Analytics, FreshBooks, and lead tracking software to monitor progress and generate reports.
Build Case Studies
Record the results you have generated for your clients and use them in case studies. Case studies are essentially reports that detail the work you have done for your clients and the results you have generated for them.
These case studies are great proof that you know what you are doing and are worthy of being paid as an expert. Use case studies to draw in new clients and increase your rates as you gain more experience.
6. Ask for Testimonials
Like case studies, testimonials showcase the results you have gotten for your clients, only in their own words. Not only do great testimonials make you feel good, but they can also actively work to attract new clients.
After working with a client, ask them to leave you a review on all or any of these platforms:
- Google My Business: A free platform where you can post your business information, phone number, client reviews and articles.
- Facebook: Request reviews on your business Facebook page. Don’t forget to ask for that five-star rating!
- LinkedIn: Ask clients for LinkedIn recommendations on your personal LinkedIn profile or reviews on your business LinkedIn page.
- Website: You can repost client reviews on your website, or use website plugins to pull in testimonials from Facebook, Google and other review platforms.
- Business directories: Search Google for industry-specific business directories where you can post your information and request client reviews.
The more positive reviews you have, the better. If you do get negative reviews, be sure to address them professionally. You can sometimes request to have them removed if you think they are spam or if the user didn’t actually work with your business.
7. Manage Your Business Finances
Getting your business license and having a sound financial structure is often what separates professionals from hobbyists. If you want to have a legitimate business and scale your income, follow these tips for keeping your finances in check.
Get Your Business License
Research your state requirements for applying for a business license. There are many different types of business licenses—like a limited liability company (LLC) or an S Corporation—so be sure to compare options and find the best fit for you.
Having your business license will allow you to open a business bank account, file taxes as a business owner and possibly become eligible for tax deductions.
Open a Business Bank Account
Go to your preferred bank to open a business bank account. You will typically need to have your business license information in-hand along with a government-issued ID. They may ask what your expected income will be so they can select the right account for your business.
Use Automated Accounting Software
Sending manual invoices can be time-consuming and information gets disorganized, fast. With consultant accounting software, you can send automated invoices, take credit card payments, create profit and loss statements, track business revenue and more. This will help you keep your financial records organized and empower you to make informed financial decisions.
8. Always Be Learning
Your goal is you deliver the best results possible for your clients. This requires that you stay on top of your game and hone your expertise on a regular basis.
Beyond staying informed about the current trends in your industry, you should consider investing in additional education to improve your skills over time. You can find many free and paid resources online to help you become the best consultant ever.
Look for online courses to learn more about growing a consulting firm, helping your clients, managing your finances and charging what you’re worth.
You can hire other experts to help you improve certain aspects of your business, like your marketing or sales strategy, your pricing structure or your website.
Attend seminars to learn more about your industry, what new technologies are available and how your peers are conducting business in your niche. You can find seminars online by searching in your local area, or by searching for virtual summits for your industry.
Seek out a mentor to help you overcome obstacles and find confidence in your skills. It always helps to have someone in your corner, supporting you and assisting you in growing your business to success. You’re likely to find mentors on LinkedIn or Facebook, or through networking.
Start a Lucrative Consulting Business Today
The beauty of consulting is that you can essentially take any skill and turn it into a full-time business, as long as you provide value to your clients. If you have a unique “genius” that allows you to help others, you can market your skills as a professional consultant.
There are many paths to success when it comes to consulting, so feel free to pave your own way. With the steps outlined in this guide, you at least have a framework for how to get started and scale a business of your very own.
Do you want to become a consultant? Pursue your passion and start your dream career today.