Consultants come in many different types with specialists in hundreds of niches using thousands of varied skills and techniques.
Other businesses hire consulting experts because they want to “buy in” expert opinions, ideas and resources that don’t exist in their organization already. If you have a proven track record of transforming businesses for the better, you can turn that into paid insight, exchanging your time and skill set for well-paid consulting jobs. Consulting provides deep insight to an organization without them having to hire expert staff on a permanent or long-term basis.
Due to the expertise offered by consultants, the rates charged are normally high. So a consulting business is a great business to start if you want to make a great income with minimal hours.
Here's what we'll cover in this guide:
Types of consulting business
Resources for your consulting business
The best legal structure for your new organization
Information on taxes and finances for your consulting business
Questions you should ask to see if you’re ready to start a consulting business
Some rules and regulations you will need to follow
.. and much more
By the time you’ve read through our complete consulting business guide, you will have all the information you need to set up and manage a thriving consulting business. Let’s get into it.
Key Consulting Business Background Data and Statistics
The consulting industry is ripe with new opportunities for focused entrepreneurs, so now might be the perfect time to dive into starting your consulting business. Bizee is here to help you form your consulting business and understand the ins and outs of owning a consulting company.
The consulting space is dominated by several major businesses including PwC, Deloitte, Ernst and Young, Boston Consulting Group, McKinsey, Accenture, IBM and KPMG. But don't be deterred — there is still room for a small boutique consulting firm to do very well.
1.4M
People are employed in the management and technical consulting services in the U.S.
$150
The typical consulting fee an hour at entry-level and over 300 an hour for experienced consultants.
The global business consulting market was worth $250 billion in 2016, up from $205 billion in 2011. This overall total breaks down into the following industries:
$31 Billion
Strategy
$71 Billion
Operations
$31 Billion
Human Resources
$70 Billion
Financial Advisory
$48 Billion
Technology
Questions to Ask Before You Start a Consulting Business
Is Consulting Entrepreneurship for You?
If you want to be a consultant, you need to demonstrate industry-leading expertise. You must bring unique insight, techniques, methods and experience to solving business issues in your niche.
As a consultant, you will be expected to get a very quick understanding of an organization's problems, spend time analyzing those issues and come up with practical examples of how to make changes.
Being a consultant is all about “demonstrating your value.” Businesses will be expecting excellent results for the fees they are paying, so it’s all about delivering in accordance with those expectations.
What Are the Main Skills, Expertise and Experience to Be a Successful Consulting Entrepreneur?
The specific skills, expertise and experience for a consultant depend on the niche you decide to go into, but here are some general guidelines:
Networking
You must be good at dealing with others and building networks and connections between people.
Measurement and Analysis
You will need to be able to measure and understand the current shape of an issue. Then you will have to carry out analysis to identify specifically where problems are so you can make recommendations for improvement.
Implementation
You must have experience at working with project managers or other people making changes in an organization as you will need buy-in to turn your ideas into practical actions that deliver a result.
Questioning
Consulting starts with asking questions, and lots of them. You must be an expert at understanding exactly what an issue is, defining it and finding out the changes that need to be made.
Techniques and Methods
You will need a large toolbox of techniques and methods for improvement. These could be proven tools, frameworks or approaches that have worked in the past. You will also need an up-to-date understanding of industry best practices and benchmarks.
Niche and Industry Expertise
Perhaps most important of all, you must have established insight, experience and authority in your chosen area. You need to demonstrate thoughtful, innovative approaches that will deliver practical, sustainable transformation for your client.
What Are the Main Challenges for a Consultant?
Consultants come across many challenges. These start with finding clients — consultant services can be expensive, so building up a network of good leads and opportunities is vital. You will want to build up a robust pipeline of work to ensure your business is profitable.
Next, you will need to establish strong methods for working with people. Key skills include gathering information, carrying out analysis and making recommendations.
As business needs change, you must be flexible and adaptable. You will have to use your experience to understand what is going on below the surface of an issue and then use tools and techniques to resolve the underlying problems.
Finally, you need to deliver sustainable results. This means getting involved with project managers, business analysts and operations experts to check that your recommendations are being implemented in the best possible way.
Types of Consulting Business
Consulting is the practice of giving expert advice to others, normally in business, financial or technical areas. Clearly that’s a broad definition, so let’s narrow it down a little. Common types of consulting include:
Business Process Improvement
Examining how a business currently operates and making recommendations to improve efficiency and effectiveness
HR and Culture
Working with HR and leadership to deliver changes in attitude, morale and culture throughout a business
Organization Change
Examining the operational and staffing structure of a business and optimizing it for size and business functions
Leadership Coaching
Working with C-suite and other senior managers to enhance leadership skills and approaches
Strategy Planning
Helping to develop strategies for businesses to grow or react to changing environments, regulations and compliance
Technology, Hardware and Software
Providing insight into the technologies and approaches best suited to delivering business outcomes
Branding and Public Relations
Managing how a brand or individuals are perceived by customers and in the wider marketplace
Financial Management
Helping a business optimize its cash flow, costs, profit margins and operations to maximize revenue and minimize expenses
Legal Consulting
Giving insight into likely legal issues, challenges and strategy for new initiatives or business changes
Set Up and Maintain Your Consulting Business
Once you've legally created your consulting business, you’ll need to get some other things in place.
Finances and Taxes
What kind of bank account will you get? Will you need a business credit card? And how will you pay your business taxes? These are all important things to consider so your consulting business stays in the green. Here at Bizee we can even help you file your taxes.
Marketing
Do you need to build a website? Should you have a logo designed professionally? Will you need business cards? Consultants rely on projecting an extremely professional persona. It is definitely worth getting high-class personal branding together with a website, logo and business cards.
Permits and Licences
Running a consulting business comes with certain rules, regulations and legalities you need to be aware of. Bizee can conduct a Business License Research package for you, or you can take the time to do the research yourself.
Employees
Do you need to hire employees to help you out? Initially you will likely be a “one-man band,” but later on you may want to hire other consultants or administrators who can help free up your time for billable work.
Process
What business processes are you going to use to run your business efficiently and effectively? Since you will likely be advising on processes in other businesses, getting your own processes and methods setup as well as possible will definitely make things easier. In particular, you should focus on your research, note-taking, measurement and analysis capabilities.
Business Maintenance
Most states require businesses to file an annual report once a year. You will also be expected to pay estimated taxes on what you plan to earn in the current business year. And, your federal, state, regional and city business licenses and permits may need to be renewed on a regular basis, typically once a year.
Equipment
What equipment do you need to manage your consulting business? Will you need a laptop, computer, smartphone or tablet? What about transportation or specialized equipment? Make sure you understand exactly what you need to spend so you can write it off against business expenses. Most consultants will likely just require a computer, smartphone and transportation to their client’s business to begin with.
Business Location
Where are you going to run your business from? Will you work from home, get an office, use a shared working space or something else? Most consultants will likely start by working from home. As you get more recognized, you may want to use external offices for client meetups.
The Complete "Start Your Business" Checklist
A Clear and Comprehensive Guide to Starting Your Business the Right Way
Social Media Groups for Your Consulting Business
Connecting with other business owners in your industry can be incredibly helpful. Here are some of the best social media groups:
Discussion Groups and Forums for Your Consulting Business
There are plenty of forums and online discussion groups for consulting businesses. Start with these:
Useful Online Tools for Your Consulting Business
Here are some really great online tools for managing your consulting business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.
Collaboration
Social Media Management
Communication
Email Marketing
Advertising
Customer Relationship Management (CRM)
Customer Support
Human Resources
Website Development
Analytics
Hiring
Please note: This post contains affiliate links and we may receive a commission if you make a purchase using these links.
Conclusion
If you have experience and insight into a particular industry, sector, or niche, then consulting could be a viable business option for you. Combine your experience with an innovative approach, strong skills and proven results, and you will be off to a great start in your new career as a consultant.