How to Start a Consultancy Business

A business consultant is a person that provides support and information to assist in the running or future strategy of a business, generally in the form of project work. Top consulting firms include IBM Global Services, Deloitte Touche Tohmatsu, and Accenture. Consulting services are sometimes bundled with hardware or software sales, in which the hardware and/or software is installed by a project team that also configures, customizes, and trains employees to use and maintain it.

Types of consulting

Business process engineering

The re-engineering of a company's structure or processes is a huge undertaking requiring expertise in industry practice, legal and regulatory requirements, employee management, and sometimes outsourcing.

Marketing and sales

Redesigning marketing strategy or sales force processes is a difficult task that requires expertise in developing product development and advertising strategy and customer relationship management.

Software development and implementation

The customization and implementation of major software packages creates great stress on a company and requires expertise in choosing the software, acquiring the necessary hardware, performing the configuration and customization, and training users.

Travel

Most business consultants travel regularly to work with clients on project teams directly. This often requires weekly travel in which the consultants fly to the client location, stay in hotels, and work at the client site. In some cases, overseas travel is warranted or long-term stays or even relocation to be near the client site, depending on the nature and length of the project.

Whether you come to the decision yourself or you’re forced into it by circumstances, starting your own business involves a lot of complex preparations and a great deal of strategic thought. For many, finding the right business idea or opportunity is the first and biggest challenge.

But often you needn’t look further than your CV. Your professional experience, knowledge and specialist understanding can constitute a business opportunity with significant potential in its own right.

Not only can becoming a ‘knowledge worker’ – that’s a consultant, to you and me – mean the chance to earn a far better living than being someone else’s employee, it can enable you to establish a thriving business with real capital value.

And the great thing about becoming a consultant is the low entry cost. It needn’t involve an outlay of precious savings or expensive borrowings, which makes the risk much more manageable.

Who is it suited to?

There are three simple steps to understanding what’s involved and deciding whether consultancy is the right start-up opportunity for you. They are: know your product; know your market; and know your skills.

Know your product – First of all, you need to audit your knowledge, skills, experience and expertise. What have you learned in your career that you can sell to others? Do you really have a wealth of knowledge, accumulated over decades working in ever more demanding environments, or do you simply have the same couple of years’ experience repeated many times over?

The simplest way to find out is to review your CV and list all the projects you’ve undertaken over the years: what you did, the outcome, and what you learned. Summarise this into a set of areas where you can provide useful and powerful insights to others. That is the product you have to offer.

Know yourself – Consultancy requires a wide variety of personal attributes that will make a real difference to your success. These are self-motivation, good inter-personal skills and confidence.

Self-motivation – In start-up mode, you must be able to work alone and motivate yourself. Even getting up in the morning will be a challenge if your only incentive is your self-will! For many, the fact it’s your own business you’re getting up for is motivation enough.

But working alone demands more than just the skill to self-start. It also requires the ability to be comfortable in your own company and not feel isolated or lonely. Many projects offer little human contact for days on end. If co-workers’ banter is vital to your happiness, consultancy may not be the right choice.

Good inter-personal skills – You will also need strong inter-personal skills. Some consultants’ skills are so specialist, and in such demand, that they can get away with behaving like operatic divas. Under certain circumstances, these characters can achieve significant success. But in most cases their consultancies flounder.

The fact is, clients expect to be treated with respect. They know they are the paymasters, and they like you to acknowledge this fact in your dealings with them, just as they do with their clients. They may ask you to provide them with powerful insights, innovations or other interventions in relation to business help and advice, but they also expect you to do so with sensitivity.

“What have you learned in your career that you can sell to others? ”

Saving their face while at the same time telling them they need to change is a skill requiring empathy and finesse. Clients rarely want this delivered via the sledgehammer of the unvarnished truth, even if they say they do.

Confidence - You will need to balance these inter-personal skills with bucketloads of self-confidence. Your clients are buying your expertise. If you come over as unsure of the value of your experience, they won’t buy from you. At the same time, you need to contain this self-confidence on the right side of the boundaries of arrogance, otherwise you’ll end up back in the land of the divas.

In the early stages, you may have to fake some of this confidence. After all, if this is the first time you’ve encountered a particular combination of circumstances as a consultant, you’re likely to be a little uncertain of your skills. Just convince yourself that if you’re unsure, the client is even more unsure. Keep reassuring them (and yourself) it’ll all be fine, even if you can see how easily it could all fall apart. Chances are, it’ll be fine anyway.

Know your market – It’s one thing having a long list of knowledge areas you’re confident you can provide to others. The real question is, are they valued by the marketplace? Are you offering skills in the next big thing, or the last big flop? To successfully make this assessment you need to understand what’s going on in the world around you. Ideally you want the skills you’re offering to match a growing area of demand, where they will be in short supply and the competitive environment is at least manageable.

Ready to get started? Find out everything you need to know about how to start your own business here.

A business consultant develops strategies to help businesses as they seek new markets, marketing strategies and financial organization. Businesses can make calculated changes without having to hire someone into a full-time position. Business consultants must choose a specialty, so that they can focus their career path and become experts that can help a business to improve. Successful business consultants have an entrepreneurial drive to create their own business and be their own boss. They must also be well-organized, be good teachers and have a social nature. Find out how to become a business consultant.

Method 1 of 2: Develop Business Expertise

Step 1

Earn a bachelor's degree in your field of interest. You can choose to complete a 4-year degree in business administration, or you can specialize in accounting, finance, economics, marketing or public relations.

Step 2

Take internships while you are in college. This will give you the work experience you need to decide the direction your career will take you. You may also be able to move up the ladder at a company faster if you have already worked in a business environment.

Step 3

Gain work experience. Work in a corporate environment in the sales, marketing, accounting, public relations, buying or other departments. You can also choose to become a project manager, where you will learn how to strategize and complete projects according to budget, deadline and scope.

Step 4

Return to school for your master's of business administration (MBA). In most medium to large companies, you must hold an MBA to move into management. Seek a program that is nationally ranked with high alumni involvement.

Step 5

Work in mid and upper level management. Apply for management positions within your own company and in other companies. As a manager, you will learn to handle decisions on a macro level, while developing leadership, public speaking, organization, reporting and problem solving skills.

Step 6

Become a member of a professional organization. These networks connect you with other companies, professionals and training opportunities. Get certifications and attend conferences to reap the benefits of this affiliation.

Step 7

Develop successful strategies in your specialization. You need to start developing your expertise. There are a number of ways to do this that will help you to move forward with consulting in the future.

• Be creative at your job. Take calculated risks and record your results. You will need an excellent track record to label yourself an "expert" in your field.
  
  
• Start a blog. You can show your extensive insider knowledge by helping others in your field. Many blogs end up making money and becoming affiliated with other business organizations. A successful blog will make it easier to start your own consulting business when the time comes.
  
  
• Write a book or ebook. If you excel in a certain skill, write a book for other professionals. Once you become a consultant, you can sell your book or offer it free with your consulting fees.
  
  
• Become a trainer. You can begin training departments in your own company. Then, start lecturing at conferences. A mentor position can also help you to organize your expertise into a marketable product.

Method 2 of 2: Start Business Consulting

Step 1

Start your own business. Each state has different requirements for consulting, so call your Secretary of State to see what you need to do.

• Apply for a professional license. Most states require a license in order to start offering consulting services. You may be required to pay a fee, gain extra training, prove your experience, take a test and pass an ethics exam.
  
  
• File the appropriate business documents. You must decide if you will be a sole proprietor, partnership, limited liability corporation or another type of business.
  
  
• Choose a name. You should include your type of services and possibly your legal name in your business name. File a "Doing Business As" certificate and consider filing a trademark registration with the state.
  
  
• If you intend to have employees, you will need to file for an employment identification number and register to withhold payroll taxes for the state and federal governments.

Step 2

Write a business plan. This document will help you to raise start up costs and create long term goals.

• Define your target market and your competition. You should have a very good idea of who you will offer your services to and how you will target them before you quit your job to become a consultant.
  
  
• Set your fees. Be sure to include your administrative costs in your fees, or you will not have a profitable business. Most business consultants double or triple their hourly rate after they calculate what they were making per hour at their last position. Remember that if you set fees too low, it is hard to raise them later. Businesses expect to pay a reasonable, but somewhat high, price for your expertise.

Step 3

Focus on your finances and marketing. These 2 areas of your business plan should be planned out for at least 5 years. Overestimate your start up costs, in case of additional expenses, and seek loans or investors. Then, invest heavily in marketing during the first few years.

Step 4

Implement your marketing strategy. Create an exceptional website, letterhead, logo and materials to give to perspective clients. The following are additional ways you can market yourself:

• Use your blog or book. Seek more online affiliations so that you can announce your consulting business and gain access to perspective clients.
  
  
• Attend conferences. Whenever possible, speak at them so that you can show an example of the type of help you can offer companies. Sell your books at the conferences in the exhibit hall.
  
  
• Seek referrals from your alumni, professional organization and business contacts. Most people get their first clients from their friends. You may give a discount or free service to the first few people who help you to get started.

Step 5

Work extremely hard for the first few years. You may find that you need to put in more than 40 hours a week as you begin the business. This hard work will reduce the risk that your business will fail within the first 5 years.

Tips 

• Working for yourself may be more difficult than you first realize. You must take on more roles, remain well educated on your field and work extremely hard to make your business succeed. Business consultants sometimes return to company employment in high-profile jobs.

Things You'll Need

• Bachelor's degree

• Master's of business administration

• Internships

• Work experience

• Professional affiliations

• Blog/ebook

• Management experience

• Professional license

• Business filings

• Website

• Business plan

• Start up loan/investment

• Speaking engagements

• Marketing materials

• Referrals

Reference 

• How to Start a Consultancy Business
• How to Become a Business Consultant