Learning how to start a consulting business may seem like a complex undertaking, but you can do it within six simple steps.
Some consulting businesses may take more time and a few more steps, but generally speaking, you can get your business up and running quickly.
Consulting businesses are lucrative for professionals with specialized skills to help share their knowledge.
That’s what makes them such a great business to buy.
Here’s all the information you need to know, from how much you can make to getting your business up and running.
- How Profitable is Owning a Consultant Business?
- What You’ll Need to Start a Consulting Business [& Associated Costs]
- Do I need a License or Certificates to Start a Consulting Business?
- Why You Should Consider Starting a Consultant Business As a Side Hustle
- How to Start a Consulting Business in 6 Simple Steps
- Things to Consider When Building a Consulting Business
- Inspiration: Consulting Business Ideas
- Frequently Asked Questions
- Similar Businesses to Consider Starting
- Wrapping Up
How Profitable is Owning a Consultant Business?
The amazing part about owning and running your own consultant business is that how much you earn depends on you as a business owner.
There is no minimum, and there is no real maximum.
So, a consultant business can be very profitable.
Generally, the more complex the industry, the more profit there is to gain.
Additionally, if you can teach a skill to a business or individual, they’ll pay more for your services.
Marketing and reputation also play a huge part in consulting.
Look at consultant salaries to know how much profit you can make.
On average, Occupational Outlook Quality says that management analyst consultants make around $75,250 annually, but in other industries, such as market research analysis, consultants make about $61,580 annually.
What You’ll Need to Start a Consulting Business [& Associated Costs]
While some consulting businesses can get away with extremely low expenses, others aren’t so fortunate.
To save on costs, some consultants start out at home initially, while other consulting businesses must commit to office space.
Depending on the industry, you may pay a fair amount in start-up costs, but generally, most consultants can expect these four expenses.
- Website: One of your most essential expenses when starting a business will be creating your website. Websites are typically a yearly expense that will stay with you. Luckily, there are benefits to using website builders, such as low costs and direct support.
- Lawyer fees: Some consulting businesses may need more legal work to set up their business. Depending on the licenses, certification, and liability insurance, you should consult an attorney to sort things out to ensure your business starts correctly.
- Software fees: Every business now relies on software to increase productivity. Whether that’s accounting, CRM, or marketing software, you’ll have to keep these expenses in mind.
- Marketing: Marketing will be one of your most consistent expenses. Depending on the size of your consulting business, you’ll spend more on marketing or less. You will always be marketing as often as possible and have to budget your marketing funds accordingly.
Do I need a License or Certificates to Start a Consulting Business?
Like most firms, you’ll need a business license in most states.
Beyond that, it’s industry dependent whether you need more licenses than that.
For example, for medical and account consultation, you may need special certification to provide your expertise in the field.
Why You Should Consider Starting a Consultant Business As a Side Hustle
The great thing about a consulting business isn’t that you don’t have to commit fully.
You can start small and scale as you go along.
Here are some reasons why it would be beneficial for you to consider starting a consulting business.
- Meet new people: When you consult for people or businesses, you broaden your range of contacts. You’ll meet clients or potential new hires to your business. In the consulting world, having the right connections will benefit you more than you can imagine.
- Make a profit off your knowledge: Assuming you have the knowledge to share, you can constantly profit from sharing what you know. Making a profit off your schooling or work experience is an amazing way to continue your education and turn a profit.
- Improve your skillset: Instead of letting your skills and value fade away, you can continue to hone your skillset by consulting. Knowledge is similar to knowing multiple languages; if you don’t use those languages often, you’ll start to forget about them.
- Build your resume: Consulting always helps your chances of acquiring a better position in your field. Building onto your resume is another great reason to start consulting, as it shows that you can manage yourself and a business with the knowledge you have.
How to Start a Consulting Business in 6 Simple Steps
Now that you better understand the definition of consulting and its profitability, here are six steps to help you start your own consulting business.
1. Create a Business Plan
The first thing you should do when starting a consulting business formulates a comprehensive business plan.
A business plan isn’t definitive, but it serves as a general guideline for conducting business and your general idea of how you’ll find clients.
Additionally, you’ll include important aspects of your financial plans to show potential investors and banks.
2. Register Your Business
To operate your business, you’ll have to register it within your state.
You’ll need to decide a few things when registering your business.
You’ll need to determine your company name and the type of business entity you’ll be in, and you’ll need an EIN for your company.
From there, you’ll fill out other accompanying legal documents and acquire your business license and tax permits.
3. List Your Services and Determine Your Rates
Whether you write this in your business plan or separately, you’ll have to think about and properly list your services and rates.
This step is extremely important because it will establish how you’ll conduct business and how it will scale in the future.
Additionally, you’ll need to understand how you’ll provide these services and the assets you need to do it efficiently.
4. Create a Website For Your Consulting Business
The next step after you have the core of your business plan, model, and services is to create a website.
Your website will add credibility and provide a method for clients to find you.
The website should provide all the information your clients need and should clearly express your intent.
Consider hiring a web designer or doing it yourself with a website builder like Wix.
5. Market and Build Your Clientele
The final and arguably the most important step is to market and build your clientele efficiently.
Digital and email marketing are some of the most effective and affordable ways for start-ups to start marketing.
Additionally, promoting your existing clients to refer you to their colleagues provides opportunities for free marketing and potential prospects.
6. Keep Improving
Strong consulting businesses come from the blood and sweat of consultants.
You are the sole person that offers value to your clients, so you must constantly stay up-to-date in your field and continue providing the value your clients expect.
Your business depends on your knowledge and understanding, so continue reading, researching, and working as often as possible.
Things to Consider When Building a Consulting Business
Before starting a consulting business, you must consider a few things.
First, can you run the business on your own?
Second, will you need to hire employees?
Thirdly, do you have a reliable method of finding clients consistently?
Can You Run a Consulting Business By Yourself?
There are some consulting businesses that you can run yourself, but having a small team helps create and cultivate a successful firm.
For example, financial consultants heavily benefit from professionals dealing with different aspects of business finance, such as asset investments.
Do You Need to Hire Employees For Your Consulting Business?
People often run solo consulting firms and make a healthy wage, but that doesn’t come without stress.
You’ll have to manage your accounts, clients, marketing, and legal work.
If that is too much for you, consider how a team may impact your business positivity.
Do You Have a Reliable Method of Acquiring Clients?
Another consideration is whether or not you have a reliable way of finding clients.
Consulting businesses rely heavily on client relationships; if you’re struggling with finding them, you won’t make it as far as a consultant.
Inspiration: Consulting Business Ideas
There are many types of consulting businesses you can start.
For example, if you have medical experience, you can create a business focusing on medical consultation.
The most common consulting business would be finance and marketing, but here are more options.
- Business Management Consultant: Business management consulting will help businesses fix underlying management issues. Whether this involves training management from the ground up or providing advice to managers to help run their day-to-day operations.
- Strategy Consultant: Strategy consultants are similar to business consultants, but strategy consultants help executives and managers form plans. When businesses formulate a plan, they often bring in a strategy consultant to review it and get an outside perspective.
- Digital Marketing Consultant: Digital marketing is imperative to the success of a business. If you specialize in digital marketing, you can use that knowledge to help businesses launch online marketing campaigns and other digital campaigns.
Frequently Asked Questions
Here are answers to some questions people still have about starting a consulting business.
Can You Start a Consulting Business With No Experience?
You should have some experience for your consulting business to have a chance of success.
Your best bet is to hone your skills and gain some experience in the field you know best.
After that, you should have experience in the business side of things.
What Types of Consultants are In Demand?
Here are the types of consultants that are in high demand:
– IT consultant
– Marketing Consultant
– Financial Consultant
– HR consultant
– Medical consultant
Similar Businesses to Consider Starting
If you want to start a business using your knowledge but don’t want to start a consulting firm, you have other options.
Consider these alternative businesses that you can form and operate similarly to a consulting business.
- How to Start a Real Estate Business: Starting a real estate business is extremely profitable and comes with similar perks to consulting. Essentially, you’re selling property to prospects with your knowledge and information about the land and area.
- How to Start a Bookkeeping Business: If you have some accounting or bookkeeping experience, consider starting your own bookkeeping business. Bookkeeping is necessary for most businesses, so creating and operating a bookkeeping business will be profitable.
- How to Start a Tutoring Business: Tutoring is similar to consulting, and there can be good profit from it. Unlike starting a consulting business, a tutoring business is easier and less of a commitment to start. Additionally, the client’s situations are easier to understand and solve.
Starting a consulting business is one of the most rewarding things a professional can do.
Sharing your knowledge and helping others prosper is amazing; getting paid is just the icing on the cake.
Now might be the time to branch out and start your own consulting business.
Consider your skill set and what you can offer people within your industry.
Use this article as a guide to help you create your firm and continue to grow and better yourself and your clients.