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How to Start a Consulting Business
If you want to be your own boss, starting a consulting business may be the ideal choice. Advising professionals about how they can improve performance is a growing industry. According to IBISWorld, an industry market research company, the U.S. management consulting industry currently pulls in $241.60 billion a year and is expected to increase.
What Is Consulting?
Consulting refers to giving expert advice. Consultants provide other professionals with guidance on a wide variety of subjects. Generally, the intent is to guide those seeking advice toward more success with their careers or businesses.
Consultants have expertise in specific subject areas. For example, human resources consultants give business owners advice in the area of human resources. Financial consultants advise on finances. Whatever your area of expertise, chances are good you can start a consulting company around it.
Benefits of Being a Consultant
Being a consultant has a wide variety of benefits. As a consultant, you are essentially your own boss — you set your own working hours and decide your own rates. Consulting is also an ideal choice for starting a small business as the overhead is fairly low. You don't need to invest heavily in inventory or pay for an expensive office. Typically, all you'll need is a computer and a cellphone. You can work from just about anywhere, and working remotely is common.
Steps to Becoming a Consultant
If you have the right expertise, consulting can be highly lucrative. Here are a few tips to help you get your consulting business started.
Find Your Niche
Successful consultants are usually experts in a particular field or fields. For example, if a business owner is seeking advice about growing their business, they'll want advice from an expert who has had experience scaling businesses.
Consider what area or areas you are especially well versed in. While you don't want a specialty that is too narrow, you do want to focus on a particular area that will help you stand above the crowd. Think about how your background and experience give you a unique perspective that can help others.
Some consulting niches to consider include accounting, web design and building, branding, human resources, organization, training, sustainability, and marketing.
Decide if You Need Training
If you've worked in a particular career for some time and have become a bona fide expert in the topic, you probably already have the necessary training to provide people with expert advice. However, if you are new to a particular specialty or have limited experience, you may want to get additional training so that you can offer the best advice possible.
Research any additional training you may want to pursue and plan for obtaining the instruction. When you do receive the training, make sure that your clients know. Indicate the training on your website and hang degrees and certificates in your physical office, if you have one. If you do virtual calls, have the credentials hanging up behind you.
Set Up Your Business Entity
While you can start a business as a sole proprietor, many business consultants find that setting up a separate entity via a Limited Liability Company (LLC) provides financial protection so that your personal assets aren't at risk. Depending on your industry, you may also need various licenses and registrations. This could include a DBA, as well as certifications specific to your industry.
How much you get paid will depend on the type of services you're providing and how much experience you have on the topic. Take a look at the market and what professionals with similar consulting businesses are charging. Use this information to price your services accordingly.
If you price much higher or lower than your competitors, you may have customers looking elsewhere. You can charge hourly, by the project, or on retainer. Consider offering new client discounts and rewarding long-term customers.
Bring in Customers
Given the fact that consulting involves offering advice, many people find consultants through referrals. Word of mouth advertising is one of the most effective ways to get new business. All you need is one customer sharing their positive experience, and the referrals will continue coming in as your satisfied network grows.
Keep in mind that the opposite is also true. If someone has a poor experience, that client is likely to tell others. For that reason, it's vital to always focus on superior customer service.
Asking for referrals from clients is another way to build your business. Reward customers who refer friends and family with a gift or credit toward future services. They'll be grateful and more likely to continue to refer you and your services to others.
Networking events are another way that you may be able to grow your business. Attend events and be ready to quickly explain what your business does and how you help people. Reach out on social platforms that encourage networking, including LinkedIn.
Craft a Contract
When you do land clients, you want to be ready with a contract. Such a legally binding agreement will make it clear what is expected of all parties. The contract should detail the scope of the work you'll perform for the client. The contract should include the date the work will be completed, the amount the client will pay, and when they'll pay it. Have all parties agree on the terms by signing the contract.
Know When to Walk Away
Though you want business, you don't want to overload yourself with low pay for your hard work. There will be customers that just aren't worth the hassle. Often, such clients have unrealistic expectations that you'll never be able to fill, so don't try.
A World of Possibilities
Running a consulting business is an exciting and liberating experience. Being able to offer advice, support, and encouragement to other professionals can be more rewarding than you ever imagined.
By starting your own business, you're opening yourself up to a world of possibilities. These include the flexibility to run your consulting firm the way you want to. The key is setting your consulting business up properly from square one.
At Swyft Filings, we help business owners like you with the nuts and bolts of setting up a company. That way, you can focus on building a thriving consulting business. Contact us, and we can help you start your LLC today.