Consultants provide an essential service to their clients. So much so that businesses spend billions of dollars a year on consultants. There’s no arguing the need for this type of expertise. But if you’re starting your own consulting business, you will need to convey your expertise to potential clients.
To aid you in your consulting journey, you will find 6 essential steps below that show you how to start a consulting business, no matter your niche. Each step is equally important, so be sure to implement them accordingly to ensure your own success.
As a new start-up, you want to be sure to cover all of the necessary bases. The steps below will help you get there on your way to building a successful consulting company as a solo entrepreneur:
Step #1: Figure Out What Your Market Needs
If you want to know how to start a consulting business, one of the most important things is to learn what your market needs, and what they are willing to pay for. Being a successful consultant is all about knowing your strengths. You already know your own skill set and what you can offer to businesses in your niche… now it’s time to consider the market you’re working in. You must identify the common problems clients in the area face.
Once you know what you’re working with, you can start to develop solutions to show your value in the field. To obtain this information, the best approach is to just ask. Find out what your market needs by searching online for blogs related to your niche.
What topics are thought leaders discussing? More importantly, which topics tend to provoke the most debate? Remember, you want to be the solution to all of your clients’ problems. Therefore, it is imperative that you pinpoint common issues.
But don’t stop there. Networking with clients is an excellent way to find any pain points that are present in your local market. When it comes down to it, the bottom line is this: you want to offer something that clients in your market are willing to pay for.
Step #2: Figure Out Your Ideal Client
Next, you really want to focus on narrowing down your ideal client. What do they look like? In what business are you most likely to find your ideal client? Moreover, where can you find your ideal client who is willing to pay for your consulting services? This is an essential step – if you're gathering information on how to start a consulting business, you need to create profiles of your various ideal clients. What types of businesses or organizations are they?
It’s also vital to consider the sizes of the various companies in your market. Research them to determine what kind of services or goods they offer and brainstorm ways that your expertise can assist them and help them grow.
The value that you bring to the table will determine your client base. As such, you want to make sure that you convey your consulting business as an essential component to your client’s success.
In addition to this, it’s a good idea to consider the types of clients you would most enjoy working with. Always keep in mind that it is best to avoid clients that are a time drain with little to no return. Ideal clients are those who get the most from your expertise, so seek them out first and foremost.
Step #3: Create Your Pricing Structure
Like any business owner, you need to determine what kind of prices you charge for your services. As you do this, it’s important to factor in the market you’re working in and how that affects your costs. What’s more, you will need to establish a pricing structure that’s based on both project fees and retainers.
In addition, you should have price packages in place for new clients, existing clients, productized services, and any other points you can think of. I always recommend that you avoid charging by the hour (here's why), unless that is the standard pricing structure in your field.
When you're learning how to start a consulting business, there's a temptation to charge discounted rates in order to attract clients. While you can certainly use lower prices as a way to build your book of business, be sure not to overdo it. Far too many consultants and freelancers get stuck in the role of “lowest priced consultant” and they find it difficult to get out of it.
Step #4: Get the Legal Stuff Out of the Way
Before you officially open your doors for business, you will need to take care of all the legal aspects of your consulting service. That means compiling all of the necessary legal documents, forms, registrations, and so on. Once you’ve done that, file them accordingly.
You will also need to get the proper insurance and establish a record-keeping system. To ensure that you follow all applicable rules and regulations, consider speaking with an attorney and accountant who specialize in this area.
Step #5: Create Your Marketing Message
Marketing yourself is all about showing the value you offer. As such, you will need to come up with a clear message and create marketing materials (including a quick and easy website and a brochure or one-pager) that highlight your marketing message. You don’t have to pour a lot of expense into this at the start: most people who are learning how to start a consulting business find they can begin with a simple WordPress website, an inexpensive logo design, and a one-page flyer listing their bio and the services they offer.
Step #6: Find Your First Client
You might feel overwhelmed at first as you search for your first client. But you can help yourself by asking everyone in your circle for referrals. This includes former employers, organizations where you have volunteered, and companies you do business with, in addition to friends, families, coworkers and neighbors.
While learning how to start a consulting business, you should also check your local area for networking events and make it a point to attend them. In doing so, you can increase the likelihood of finding your first client exponentially. But it takes dedication and commitment. The more you interact with businesses and prospects, the more likely you will be to land your first consulting client.
Test the Market First (How to Start a Consulting Business without Going Broke!)
One of the most common mistakes consultants make when they’ learning how to start a consulting business is to spend too much money on things like websites and marketing materials. You don’t need a fancy logo, or a professionally designed brochure right out of the gate—these things cost money that you likely can’t afford.
In time, however, you can invest in materials and services that benefit your company and promote your brand. For now, though, it’s time to focus on your knowledge and experience and how you can serve your local market. That's why you should always test the market first, before you invest lots of money in your business. If you set up a quick webpage and start reaching out to your network and you land a few clients, you'll be much more comfortable investing money in a fancy website or marketing materials, because you know the market is hungry to buy what you are offering.
While you certainly don’t want to neglect your appearance and professional presentation, you also don’t have to spend a small fortune just starting out. Spend as little as possible while presenting you business in the best light. Then, when you have proven that people are willing to pay you for your services, you can invest more money and build your business for the long run.