Setting up a consulting business can be a very rewarding career path. It’s a great way to take what you know and love and turn it into a livelihood on your own terms. All you need is an idea or area of expertise to get started. And of course a lot of drive – because going into business on your own requires dedication and hard work.
What You Need to Know When Starting a Consulting Business
There are a number of things you need to know when starting a business in general, and building a consulting business in particular. Let’s start with the general things, and we’ll move onto the specifics right after.
- Licensing and/or certification – You do not need a license or a certificate to work as a consultant per se. That is, there is no such thing as an official consultant certificate. But for many fields you will need proof of your expertise. For example, if you are a business consultant, clients will want you to have earned a relevant Bachelor’s degree at minimum, if not an MBA. Similarly, if you do consulting in the field of accounting you will need to prove you’re a certified accountant in your state. And if you’re an HR consultant, customers may want you to have a university degree to back that up. The same can be said for many types of consulting businesses. The point is, to be hired as a consultant you will need at least the same level of professional licensing or education that you would need to be hired for an in-house job. So while a gardener or stylist may not require official certification, many other professions might. As such, make sure to do the research based on the state in which you live, and your area of expertise.
- Taxes for consultants– While you may not need educational licensing to run your consulting business, you may need a general business license. This is the one that ensures you're operating legally. Make sure to check with your local and state government offices to be sure, or consult with an accountant. Either way, like any small business, you will need to pay taxes. You can either file on your own – especially if you’re a tax consultant yourself – or you can hire someone to help you figure it all out.
- Insurance – Every business needs business insurance. The types of consulting insurance you need depends on what exactly you’re doing, where you’re operating from, and the level of contact you have with your clients. For example, no matter what you’re doing, you will 100% require general liability insurance. That’s an absolute given. Other types of insurance you may need include property insurance, commercial auto insurance, and workers’ comp once you’ve grown to incorporate employees.
The Specifics of Consulting Work
When starting your own consulting business, you need to setup your company like any other company. And that includes defining what you do – that is the exact services you provide, because consulting as we all know if a fairly vague term.
So if we can rewind for a minute, when it comes to how to start a consulting business, the first step may actually be building a business plan. Or at least clarifying some basics like: the field of expertise you will be providing, the scope of your work, and who your customers will be.
Remember, your options are wide. Some consultants give strategic advice to help build an operating plan for customers. Others provide what is called done-for-you-service. In this scenario you do all the work involved in executing a certain plan. And others do coaching or training either on a one-time basis or ongoing. You can offer any one of these work models or all of them. Just make sure your consulting insurance covers whichever format you choose.
A Few Business Basics to Consider
Once you've defined your field of expertise and the type of "advice" you'd like to give, there are a few basic things you should likely do when setting up a consulting business. These are operating essentials that will help you run your business more smoothly. For example, it’s a good idea to create a pricing chart, so you already have a good idea of how to price any new gig. Similarly, you should create different proposal templates, if your business requires such a thing. And, if you’re in a business that requires a pitch, prepare talking points in advance to ensure your message is always on target and clear.
Meeting Your Essential Consulting Marketing Needs
Whatever type of consulting you’re doing you will need clients. You can reach out to previous work contacts, family members, and friends to get the balling rolling. But most businesses will need more effort than that in the long run. As such, another essential in starting a consulting company is to have a clear picture of your business marketing needs. A few things you should consider include:
Your business will need a name. How creative you want to get here is up to you. You can use your own name like John Smith Consulting, which is literal and memorable. Or you can choose something that features your line of work, like Great Gardening. Just make sure there isn’t anyone else in your area of expertise operating under the same name.
A website is an important marketing tool for almost any business. It’s an effective way to tell people who you are and what you do. Similarly, it’s a great way to prove your credentials, and makes you look more professional. Plus, if your site is search engine optimized, people can easily find your consulting business when doing a quick Google search. How to build it is up to you. A few basic pages describing your services and yourself may be enough. Or you can create a bigger website that includes elements like a blog. If possible, it’s also nice to include a portfolio of your work as well. And don't forget to include your contact details on every page, whichever option you choose.
While most of the advice you’ll read will tell you to get on social media, the truth is, social media is not a one-size-fits-all solution. You need to do it in a way that’s right for your business. For example, a gardener could post great pictures on Instagram. LinkedIn, however, may be a less powerful medium for such purposes. The opposite could be true for a tax consultant who may prefer the more professional style of LinkedIn, but wouldn’t really have much to post on Instagram. In other words, use social media, but use it wisely. That means in a way that makes sense in terms of your target audience, and as importantly, your actual goals.
There is a fair bit of work that goes into setting up a consulting business. But don’t let that scare you. If you go about it systematically, it’s not nearly as hard as it seems. In fact, the challenge can be part of the fun. Just make sure to dot all your i's and cross all your t's. Cover your basics, pay attention to details, and keep a positive attitude. With perseverance and good planning, you really can make your dreams come true.