You can make a lot of money with a successful consulting business. There is a huge demand for consultancy services and if you approach things in the right way then you will be successful. It is critical that your mindset is right to be a successful consultant and that you develop the necessary traits.
By using the techniques in this guide, you can setup and launch your own successful consultancy business. You will learn how to choose the right niche to operate in that has the necessary demand. Knowing your ideal client will also help you and this is covered in the guide. Setting up your consultancy business properly and promoting it to attract clients is also covered.
We have worked hard to provide you with everything that you need to know to become a successful consultant. You will learn proven techniques to get the best results from your consulting business. Also you will learn about the mistakes you need to avoid so that you can provide highly profitable consulting with total confidence and realize the biggest profits.
So, you want to start a lucrative consultancy business? Do you really know what a consultant does? In this first chapter we will take a look at what a consultant is and what they do. We will also discuss the type of consulting work that you can end up doing and the various tasks that a consultant can undertake.
What is a Consultant?
The bottom line here is that a consultant is paid to share their knowledge and experience with a client. You have the knowledge that an individual or company needs and they will pay you well to share this with them.
A business will often look to hire a consultant on a short-term basis to fulfil a need. They do not want to go to the trouble and expense of hiring a full-time member of staff to do the work. Often, a business needs the right guidance to achieve their goals and they do not possess the knowledge and experience that they need in-house.
As a consultant you will look at a business problem from a fresh perspective. This is an advantage to a business or an individual who are so deeply entrenched in what they are doing it can be difficult for them to “see the wood for the trees”.
There are opportunities for consultants in just about every industry. You can specialize in an area that will appeal to a lot of businesses such as digital marketing, or you can be a specialist in one particular industry such as health, finance, banking, engineering and so on.
No Qualifications Necessary
You do not have to have any qualifications to become a consultant. Some consultants do have degrees in business and management for example, but this is not necessary to start your consulting business.
What is required is that you have expertise in your chosen field or niche. Clients will hire you based on what you know and your previous experiences. If you wanted to work for a consulting company then you would probably need a degree to land a job. But when you are starting your own consultancy, this is not required.
Consulting Work can Vary
Depending on the niche and industry that you choose for your consulting business, the work that you will be commissioned to do can vary considerably. One of the main reasons that consultants are hired is to fix a problem that a business or individual has.
But it doesn’t stop there. Sometimes consultants are hired to teach employees of a business or organization how to do something. It is more cost effective to do this than to hire a trainer on a permanent basis.
A new business may hire a consultant to create their business plan. A consultant skilled in this area will ask the right questions and perform detailed research to obtain the necessary answers. They will talk to senior managers in the organization to gain their perspective on things and create a business plan that everyone is happy to sign-off on.
Management consultancy is popular and often businesses will hire a consultant that has the experience to make improvements with leadership and communication for example. A consultant may work with a group of people within a company to solve problems and to prompt leadership and other skills.
A consultant can be hired as a “change agent”. This means that the management of a company or organization have made some difficult decisions and you are hired to do the “dirty work”. Usually, this means that you are directly involved in something like a downsizing project where you will decide who goes and who stays for example.
Consultants Perform Research
In order for a consultant to provide the best advice and guidance to a client they need to know what is going on in their business or life. Often, consultants will be provided with a great deal of information that they need to sift through to determine what is important for their task and what isn’t.
One of the research tasks that consultants will probably need to perform with new clients is learning about them. They need to establish who is who in the organization, what the company does, what they sell and the opportunities and threats that they face.
It is assumed that as a consultant you will already have a good knowledge of the industry that the client operates in.
This may not always be the case if you are providing a consultancy service that is broad in nature such as information technology (IT) or digital marketing. If you are not familiar with the industry of the client then you will need to do your homework here.
Consultants Perform Analysis
No matter how much knowledge and experience of an industry you have, it is not wise to make recommendations to a client based on your gut feelings. This is not professional and clients will definitely not appreciate this.
Your client will want you to make recommendations to them based on solid data which means that you need to do the right analysis to support your findings. Most organizations have a lot of data available and you need to look at this with a critical eye to see what is really going on.
You will need to make an assessment on both quantitative and qualitative data. A business may provide you with access to reports and other quantitative data so that you can see what has been happening over a specific time period.
The qualitative data that you collect will come from interviewing key people in the organization. Qualitative data can often be very illuminating for a consultant and tell a story that the hard numbers do not.
After your extensive research and analysis, it will be time to make the recommendations that you are confident will solve the problem that you were hired to solve. A consultant will usually provide a detailed report of their findings and provide a presentation to those that hired them.
The client will expect you to provide a step-by-step plan on how they can overcome their problem. It does not matter what the problem is, you always need to take this approach as a consultant. If you are hired to train a number of people then present your plan for doing this at the start.
Sometimes consultants are asked to create a “model” for their clients that a senior manager can take ownership of and manage to ensure that it is delivered. Consultants can be hired to manage these kinds of projects too.
We are not going to pretend for a moment that it will be easy for you to become a highly paid consultant. It takes a lot of consistent effort to do this and it is important that you can see the bigger picture to keep your motivation levels high.
In this chapter we will discuss the benefits of starting your own consulting business. When you are fully aware of the major benefits of owning a consulting business it will inspire you to take action and find the clients for your services.
There is Big Money in Consulting
One of the biggest benefits of starting your own consulting business is that there is a lot of money to be made if you do it right. Despite the coronavirus pandemic and other economic factors, there is a lot of money being spent on consulting today.
The global consulting market is estimated to be worth more than $130 billion today. There was a dip in consulting activity due to the Covid-19 pandemic but now there is a recovery in place, the demand for consultancy services is on the rise again.
Net Profits are High
By starting and running your own consulting business from home you can keep your overheads low which means that the net profits from the work that you do will be very high. Of course, you will need a decent computer or laptop, a smart phone, a printer and a few other tools. But there is no need for you to look for office space – at least not to begin with.
We are going to show you ways how you can attract clients to your consulting business later in this powerful guide. The good news is that you do not need to spend a fortune on acquiring clients which will ensure that you can maintain your net profits at a high level.
Any expenses such as travel should be built-in to your proposal with the client. It should be pretty easy for you to identify what these expenses are likely to be and account for them. You can always have an arrangement with a client where they will pay any unforeseen expenses to you as and when they occur (maybe you need to take a flight and stay in a hotel for example).
Residual Income Opportunity
Depending on the industry or niche that you are operating in, it should be possible for you to charge your clients a monthly fee for your continuing consultancy services. A lot of people think that consultancy is charged on an hourly basis but this does not have to be the case. In fact, it is usually better if you do not charge in this way.
Being able to bill a client on a monthly basis means that as time goes on you will not have to look for new clients as much. The residual income that you collect from your existing clients will more than compensate you for the work that you are doing. Acquiring new clients usually means spending more money so monthly residuals can minimize this.
You can Work Less
As long as you get your pricing right and are paid what you are truly worth, it should be possible for you to work less hours than you do now and earn a lot more money. There are a number of successful consultants that only work on a part-time basis and earn more money than most people can only dream of.
With your own consultancy business, you can aim to acquire a small number of clients that pay you well each month and this will allow you time to do other things that are really important to you. It will probably be hard work to begin with, but once you have everything set up and have the number of clients that you need then things should get much better for you time wise.
Consultants can Make Money Fast
There are a number of cases where people started their own consultancy business from home and were able to achieve their income goals in just a few weeks. As long as you clearly define your target market and connect with them, it should be possible for you to obtain clients fast that are desperate for your help.
It should not be necessary for you to set up any complicated sales funnels or systems for your consultancy business. Just go out and find the people in your niche that require your help and make them the right offer. We will talk about getting set up with your consultancy business in a later chapter. You will not have to wait too long to get started.
Work when you want
A successful consultant can enjoy a great deal of freedom when it comes to working hours. Once you have everything set up and have a number of clients, you can set the times when you will work for them. These days there is less of a need for you to attend meetings in person. You can use a video conferencing service like Zoom to connect with your clients.
Of course, there will be some work involved for you to justify your fees. But you can schedule this when you want and not be tied down to working set hours each day. If something comes up and you cannot work to your schedule then you can just tell the client that you need some time off. If you have established a good relationship with them this will not be a problem.
Consultancy can be Low Stress
A lot of successful consultants have a low stress business that they are in full control of. Some people that are thinking about starting a consultancy business are put off because of the threat of having no clients for a while. If you follow the advice in this guide then this should never be an issue for you. It is more likely that you will be turning down work.
Unless you are involved in the technical world, there is no need for your consultancy business to be high tech. A lot of people think that you need complex systems to run a consultancy business but this is not the case.
Satisfaction from helping others
It can be really satisfying helping others to solve their problems. As a consultant, you are likely to be hired to solve problems more than any other reason. Your clients will be delighted when you are able to help them to solve problems that are preventing them achieving their business or personal goals.
As a consultant, you will be providing a personal service to your clients. They may be able to purchase a course and learn what they need to do. But nothing beats that one-to-one interactivity where you can focus on your client and help to solve their problems.
If your clients are getting results from your advice and guidance then they are going to be very satisfied with what you are doing for them. This is exactly what you want as this can lead to word of mouth recommendations that can result in even more business for you. A satisfied client is going to be more than happy to pay you a monthly retainer.
Consulting is Easy to Sell
It is a lot easier to sell a consulting service than it is to sell other services and products. Think about this for a minute. Selling a training course which will show a client how to solve their problem is tough because the client has to go through the training and then do everything themselves.
As a consultant, not only can you show your clients how to do something, you can do it for them as well. A good example of this is digital marketing. Individuals and businesses know that they need to promote online. You can set up campaigns for them and charge them a monthly fee for this.
Showing clients what to do and doing it for them is a very desirable skill to have. Most clients do not have the time to go through a training course to learn what needs to be done. They would sooner pay you a high fee to take care of everything for them.
If you want to succeed with your own consultancy business then you need to have the right mindset. We have looked at the traits of some of the most successful consultants and in this chapter, we will share these with you.
Before you start your consultancy business, it is a good idea to compare yourself to the successful consultant traits below to identify if there are any areas that you need to work on. It is OK if you discover that you are lacking in some of the traits because you can take steps to improve yourself.
Successful Consultants are Confident
All of the successful consultants that we looked at were totally confident in who they are and what they do. They see each new consultancy project as an exciting challenge that they cannot wait to get started with.
These successful consultants are all “can do” people. They never want to use the word “can’t” and some say that it is not a word that is even in their vocabulary. It doesn’t matter what type of project a client has for these successful consultants as they are always confident in their ability to solve any problem and deliver the right solutions.
It goes without saying that you need to be confident in your ability if you want to succeed with your consulting business. You need to be proud of who you are and what you know and demonstrate your high level of confidence in all of your interactions with your clients.
Have a Realistic Approach to things
Some clients may ask you to do things that are just not realistic. It is one thing being confident about your abilities, but you do not want to make promises that you cannot deliver. If a client has unrealistic expectations about what is possible then you need to tactfully explain to them what it is possible to do and what is impossible.
A lot of clients are going to want you to provide results very quickly for them. It is likely that solving complex problems is going to require some time so you need to be able to communicate realistic deadlines with your clients.
The worst thing that you can do is to agree to an unrealistic delivery time that you know you are not going to achieve. Explain to the client that in order to deliver a quality result for them you need to right amount of time to do this. If it means cutting corners and delivering an inferior result to meet a deadline then you will be better off not taking the assignment.
Being a Flexible Thinker
Having a flexible mindset is a common trait among successful consultants. When you are managing a number of different clients then it is likely that priorities will change from time to time. A client could contact you and ask you to do something urgently for them for example.
There are many different things that can come up when you are providing consultancy services. The better you are as a consultant, the more likely it is that clients will start to demand more of your time. With a flexible mindset you will be able to figure out how you can get everything done for all of your clients with the time you have available.
Staying on Track
To run a successful consultancy business from home you need to have a high level of motivation each day. Procrastination is not an option for the successful consultant. When working from home it will be a lot easier for you to be distracted than it would if you were working in an office environment.
Clients will not appreciate you not completing projects on time. You need to have the focus and determination to complete all of the tasks that are necessary to deliver the right result for your clients. If you have a procrastination problem at the moment then you need to work on this as it could really hinder your chances of success.
Showcase your Expertise
The ability to showcase your expertise is vital for your success as a consultant. You need to be able to convince clients that you have the knowledge and experience to provide the results that they are looking for.
When you are interacting with your clients you need to be able to demonstrate your expertise. If you need to top up your knowledge to stay ahead of the game then you must do this.
It is not just a matter of knowing a little bit more than your client does. You need to be perceived as an expert and an authority on your area of specialization.
Gain the Trust of Clients
It is imperative that you are able to easily cultivate and gain the trust of all of your clients. If a potential client does not feel like they can trust you then you are not going to get their business. You need to show that you fully understand the pain that the client is experiencing and that you are the right person to help them.
Providing consultancy services is a people business. You need to be a good communicator no matter what method you are using for interaction with your clients. If you are meeting them face to face then you need to be confident and assuring. The same goes if you are speaking on the phone or on a conference call.
Be a Good Listener
Successful consultants are all good listeners. When you are an expert, it can be tempting to blow your own trumpet a lot and not give others a chance to speak. In order to solve a problem for a client, you need to be able to listen carefully to what they and their people are telling you.
It is a big mistake to make assumptions about the problems that your clients are experiencing. Just because you have a lot of knowledge and experience does not mean that you have encountered their problems before. Be sure to listen carefully and ask the right open-ended questions.
This is another common trait of successful consultants. They have a high degree of patience with their clients and also with their own businesses. It is highly unlikely that you are going to land several high paying clients on the first day that you launch your own consulting business.
Being patient with your clients is something that you must do. Often, clients will think that they know the answer and this can try your patience. Why did they bring you in if they have all of the answers already? Listen to what your customer has to say and do not dismiss any of their opinions. Make a note of what they think as it could be very useful to you.
Sometimes a client may not fully understand a solution that you are recommending. Here you will need to show a good degree of patience to explain everything a number of times until they finally get it. Some clients may be difficult and very demanding and you will need a good level of patience to deal with these people.
Before you start your consulting business, there are a number of myths about consulting that you need to be aware of. Some of these myths are so believable that they actually put people off the lucrative world of consulting. We have the top consulting myths for you in this chapter and explain why you need to disregard them.
1. You need to know Everything about your Niche
While it is true that you do need to come across as an authority in your niche with clients, it is not true that you need to know everything. For example, if you are competent in computers, software and IT in general, there is no way that you are going to no everything. The industry changes so rapidly and there are new products and services launching all of the time.
What you do need is the knowledge and experience to help your client. This is your starting point as a consultant. Make a commitment to learn as much as you can about your chosen niche. You already have a good grounding in the subject but there is always more that you can learn. There are usually plenty of resources available online for this.
Don’t let a gap in your knowledge stop you from becoming a high paid consultant. Believe that there are always ways to plug a knowledge gap (because there are) and be confident with who you are and what you have to offer.
2. You can be a General Consultant
No, you cant. It is impossible for you to offer advice and guidance and provide solutions to client problems on all subjects. There is no way that you can be a consultant for everyone.
Some people believe this myth because they think that it will open more doors for them. A successful general consultant is a very rare animal.
You need to stand out from the crowd and the best way to do that is to specialize. Identify the skills and experience that you have and decide how you can use these to really make a difference to your clients. If there are any gaps in your knowledge then plug them by learning more. Being a specialist is certainly the way to go.
3. Charge Low Fees to get Clients
This is another classic consulting myth. When you first start with your consulting business some people will tell you that you need to charge really low fees to get clients. We do not recommend that you do this.
Companies and individuals are used to seeing consultants charging high prices. They know that they are paying for the knowledge and years of experience that you have and that this does not come cheap. If you start charging really low prices then clients will perceive that your consulting services are second rate. Don’t fall into this low-price consultancy trap.
4. Consultants do not Own Businesses
This is simply not true. When you open the doors to your consultancy business you are a business owner right away. You are not working for a consulting firm where you are handed consulting assignments on a plate.
Any business owner needs to make offers and find customers and it is the same for consultants. You need to do the appropriate marketing, make proposals, determine your pricing, manage the collection of payments and all of the other things that other business owners do.
If you really want to build a lucrative consulting business then you need to think like a business owner. You need to market yourself correctly and get in front of potential clients. Sales are the lifeblood of your consulting business just as they are any other business.
5. It is Easy to be a Successful Consultant
Some people believe that it is easy to start a consulting business and be successful with it. If only that were true! The bottom line is that if you want to be a 6 or even 7 figure consultant then you need to do the right things. You need to use the right strategies to find clients and then deliver the results that they are looking for.
Once you have mastered the necessary strategies and tactics then it will get easier for you. Like any business, the hard work is in the setup and getting the business rolling. You are probably going to make some mistakes and you need to learn from these. Yes, it is possible to work less hours and earn more money as a consultant but you need to get to that point.
6. You have to Invest a lot of Money in your Consulting Business
You may have heard this one before as it is a pretty common myth about starting your own consulting business. People believe that you have to spend a great deal of money to start a consulting business. This does not have to be the case.
It is not necessary for you to hire accountants and lawyers right away. Nor is it necessary for you to spend a fortune on a marketing expert to find clients for you. You do not need the latest computer and other peripherals to be a successful consultant. It is possible for you to start your consulting business for a small amount of money.
7. You need many Social Media Profiles
In a later chapter we will show you the best ways to attract new consulting clients. Social media can certainly help you to do this but it is not necessary to have a profile on every social media network. When you have a social profile, you need to publish content on it and build a following. It is almost impossible to do this with several social profiles.
There are some successful consultants that do not have any social media profiles at all. Some only have a phone and an email address. We recommend that you do have your own website but there is certainly no need for you to be on lots of different social networks.
The bottom line with social media is this – if your target market uses a particular social network then you should be on it too. People that use LinkedIn are probably not going to have an Instagram account for example. Do your homework here and be where you need to be.
8. You need lots of Leads to be Successful
For a lot of businesses, the more leads that they are able to generate, the more money they can make. This is not necessarily the case for a consulting business. The most important thing about leads for a consultant is the quality of them.
We are not suggesting that you do not drive leads for your consulting business – far from it. But what you want are quality leads that you have a good chance of converting into clients. Before you start with any lead generation you need to know who your ideal client is. Design your lead generation system around this.
9. The Best Niches are Business or Financial
Says who? If you are a business or financial consultant what does that really mean? Both of these are really broad and this is probably why people believe this myth. There are tons of individuals and businesses that need business or financial consultants don’t they? Not really…
The bottom line is that there are a ton of different consulting roles that you can choose from. Rather than being a business consultant you could be a digital marketing consultant that is an expert in visitor traffic generation for example. A financial consultant is far too vague. It is better to be a taxation consultant or something similar.
10. Work More if you want to Earn More
A fair day’s work for a fair day’s pay? Always remember that this is your own consulting business and that you do not answer to anyone. You are in control of the fees that you charge your clients. It is all about the value that you provide to your clients and not about the number of hours that you work.
There is nothing stopping you being creative with your pricing. We mentioned earlier in this guide that some successful consultants charge their clients monthly fees. The more of a specialist you are the more you can charge.
We strongly recommend that you create goals and plans for your consulting business. You need to decide which consulting business model(s) you are going to go for and create goals and plans around this.
To be truly successful as a consultant, we recommend that you build a business that helps you to live how you want to live. What kind of lifestyle do you want as a consultant? If you don’t do this then there is a good chance that your consulting business will end up as job where you have to do everything yourself.
There are four main business models that you can choose from as a consultant. Of course, you can move from one model to another as you become more established, but we recommend that you choose one of these when you first start out as a consultant.
1. Be a Solo Consultant
If you choose the solo consultant business model then you are going to be working closely with all of your clients and complete all of the assignments that they give you on your own. You may be asked to come up with new strategies for a business and then be responsible for implementing them when the client approves them.
You need to decide if being a solo consultant fits with the lifestyle that you want for yourself. The advantages of going for the solo consulting business model is that you can create a lean consulting business which provides flexible consulting services.
This kind of consulting business can be very profitable but you will be doing everything yourself. Another disadvantage of this model is it will not work if you have an exit strategy to sell your consulting business because you are the business.
If for some reason you cannot work then you are not going to generate much revenue (if any) under the solo consultant business model. It is a good model to choose if you just want to get in, make a lot of money and then get out.
2. Consulting Firm Business Model
If you create a consulting business around the consulting firm model then you will be the head of the firm and running it rather than working on individual client assignments. The best way to achieve this is to hire a team of consultants that have the skills and experience in your chosen niche. These consultants will work directly with the clients on assignments.
This is a great consulting model to go for if you have no desire to be involved in the day-to-day work for the clients. You will be responsible for building your consulting business and hiring the right personnel so that it will run with or without you.
Of course, to make the consulting firm model work you have to manage the people within the firm. Your profit margins will be smaller to start with as you will have to pay all of the people that work for you. But if you want to sell your consultancy business after a while then this is a great model to go for.
3. Productizing Consulting Model
As the name suggests, here you will turn your skills and experience into a productized service. This means that you develop a series of steps that you can easily repeat that will provide the outcome that your target market is looking for.
Let’s say that you are a digital marketing expert. You have spent a number of years creating digital campaigns that drive leads and sales for businesses. This can be turned into a productized service process that you can charge a lot of money for and it alleviates the need to provide custom consulting for each client.
One of the major advantages of the productized consulting model is that you can scale your consulting business a lot easier. By defining a process for the consulting work, you can hire other consultants to follow your steps and completely remove yourself from the business if you want this.
Of course, if you like the challenge of different consulting projects then the productized model may not be for you. If you want to scale your consulting business then you will need to train other consultants to follow your process correctly. Training and managing others is not for everyone. You can sell a productized consulting business if that is your exit strategy.
4. Hybrid Consulting Model
With the hybrid consulting model, you will use a combination of the first three models that we discussed. This gives you the option to pick and choose the things that you really like about the other 3 models and then combine them into a unique hybrid model.
Although there are a number of advantages to following the hybrid consulting model, we recommend that you treat this as a longer-term strategy after you have launched your consulting business. After a while you will really know what aspects you like about the 3 different models and those that you don’t like.
It will be a lot easier for you to customize the consulting services that you offer when you have some experience under your belt.
Set Goals for your Consulting Business
After deciding on the consulting business model(s) that you want to follow, we strongly recommend that you set at least one challenging goal for your consulting business. This can be a financial goal for example where you work out the number of clients that you will need to achieve your financial desires in the first year and subsequent years.
When you are setting your goals be sure to make them inspiring. Use the SMART goal setting process (specific, measurable, achievable, related and timed). Add an emotional driver to your goal which is the real reason why you want to achieve it.
Create a Plan for your Consulting Business
You do not have to create a full-on business plan for your consulting business but if you can do this then it is a really good idea. It is important that you have a plan for client acquisition and a number of other areas. Create an individual plan for the achievement of all of your goals.
It is essential that you identify who your consulting business will target and serve. You need to ask yourself the question and find the answer before you launch your new consulting business. Unfortunately, a lot of people that start a consulting business do not address this issue and they then find it hard to obtain clients and price their services correctly.
Get Specific about your Ideal Client
If you were looking for a consultant yourself to help you with digital marketing, and in particular paid traffic campaigns, then how would you go about it? You could start by looking for marketing consultants and you are going to find a number of consultants that can help you with all types of marketing.
But you are particularly interested in hiring an online paid advertising consultant who knows how to get the best results from pay per click traffic from Google or Microsoft or someone that knows how to achieve the best outcome with paid social media advertising. So, wouldn’t it make sense to just look for these kinds of consultants? Yes, of course it would!
When you find a consultant that has exactly the type of skills and experience that you are looking for then it will feel like they are talking your language. They will understand your problem and have the ability to deliver the results that you want.
You need to adopt the same approach with your ideal clients. Be specific about who they are and how you can help them. This will make you stand out from the crowd of general consultants. By standing out in your market, potential clients will pay more attention to your message and will be a lot more interested in what you have to offer.
They will be a lot more receptive to meeting with you or having a conference call about how you can help them. When you specialize in a specific market you are definitely going to stand out more and get more attention. It will also be a lot easier for you to be perceived as an expert. Targeting potential clients will be much easier this way as well.
Brainstorm Ideas for your Ideal Niche and Client
It is now time to start thinking about your ideal niche and client. You need to choose the right niche for your skills and experience. If you are torn between a couple of niches for example, then you can perform a simple brainstorming exercise to determine which one is the best for you.
Maybe you do not have any idea about the niche that you should go for. If this is the case then it is best for you to think about the work that you have performed before and choose a niche from this. Again, you may end up with more than one option.
Now it is time for you to think about some specific areas related to these niches so that you can make the right decision. First think about the amount of experience that you have in the niche and give this a score out of 5. Do the same for your level of expertise in the niches.
How good would you say that you are at achieving results in these different niches? Again, score this out of 5. What about the potential that the niches offer? Are you confident that consultants are hired in the niches? Do you believe that there is growth in the niches?
What about your interest level with the various niches you are considering? It will be a lot easier for you to be successful in a niche where you have a strong interest. Finally, think about how easy it will be for you to access potential clients in the different niches.
OK now you need to total the scores for the niches that you have considered and choose the one that came out on top. If it is close and you have a much higher interest level in one niche over another then choose this one to start with.
Validate your Niche
Once you have chosen your niche then you need to validate it. This means that you will talk directly to people in your chosen niche to find out what problems they are facing and the results that they want to achieve. You can back this up with online research as well.
Why do you need to do this? Because individuals and organizations will hire a consultant to solve problems and achieve the results that they desire. You may have a good idea already about the problems and results desired in your chosen niche. But do not rely on this – go out and validate the niche.
Use LinkedIn to find Ideal Clients for Validation
LinkedIn have a great tool that you can use called the Sales Navigator. You can use this to identify a number of ideal clients in your chosen niche that you feel it would be good to serve. Once you identify the people you need to send a connection request and introduce yourself. Tell them that you want to connect with people in the niche.
Make sure that you are not pitching anything to these people at this time. Instead, ask them some questions. Ask them what is new with their organization and what they are currently working on. If they respond well to this (not everyone will) then make a request for a short call of around 10 minutes.
In your call you want to find out as much as you can about the industry and the kinds of problems that they face. What are they trying to achieve? Look for evidence that you can solve some or all of the problems and help them achieve the results they are looking for. If there is evidence then you will validate your chosen niche.
Take Action even when it is Uncomfortable
You are not going to be a successful consultant if you are not prepared to take “imperfect” action. Making a lot of money with consulting is not easy – if it was then there would be a lot more people doing it. Keep in mind that this is necessary to find your ideal client.
You need to know what industry they are in, what job role they have and the size of their company and where they are located. The best way to answer all of these questions is to have a meaningful conversation with these people.
At the end of the day, identifying your ideal client will form the foundation of your consulting business. You need to know who these people are and how you will serve them. Once you have done this you will be ready to set up your consulting business.
At this stage you have decided on your consulting niche, the consulting business model and identified your ideal client. Now it is time to setup your consulting business. Follow the steps in this chapter to setup your consulting business properly.
We are going to use a consultant based in the United States as an example here. If you live in a different country then you will need to research the laws and regulations that apply to setting up a consultancy business.
What Business Entity will you Use?
You will need to register a type of business for your consultancy. The entity that you choose for your consulting business will have an impact on your personal liability, how you file your taxes and whether you will need to meet any other special requirements that are laid down at either local, state or federal level.
It is important that you make the right decision about the type of business that you will register. If you have decided on the solo consultant business model then registering as a sole proprietorship may seem like the best idea but this will increase your risk and will definitely cause problems down the line if you want to change your consulting business model.
We recommend that you consider creating an LLC (limited liability company) for your consulting business. This will help to minimize your risk and provide you with flexibility in the future. Of course, there are rules and regulations with an LLC that you must observe and more paperwork to deal with. But it is probably the best solution.
There are 3 types of business structures that you should give consideration to:
- A sole proprietor – this is the easiest to set up but you will be responsible for all profits and debts of your business
- A partnership – you need at least 2 people to form a partnership and all of the partners will be personally liable for the business. There can be certain tax advantages to forming a partnership
- An LLC – with a limited liability company (LLC) you create an entity which limits the liability of the owners or the shareholders of the business. This is the most flexible option and there can be tax advantages
Think long-term when you are deciding on your business structure. You might want to start out as a solo consultant but later you may want to create a consulting firm or hire other consultants to do the work for you. This is why we believe that an LLC is most likely to fit the bill.
Some people will tell you that you need to employ the services of a bookkeeper and an accountant immediately you start your consulting business. We do not believe that this is necessary at the beginning. You want to keep your costs as low as possible when you are just starting out.
What you will need to do is to have a system to keep records of all of your financial transactions. This includes revenue that you receive from clients and all of your business costs. A bookkeeper can do this for you or you can do it yourself. Initially you can use a simple spreadsheet to record everything. Or you can look at accounting software for your financial records.
Once you have established your consulting business then you can hire a bookkeeper and an accountant if you wish. If you have established an LLC then you will need to submit accurate financial records at the end of each financial year. In any case, it is essential that you keep track of everything financial.
When you have a number of clients you may not have the time to do all of the financial stuff yourself. You need to take the view that it is more important that you take care of the clients and let someone else manage the books for you. If you want to grow your consultancy business then you are going to need the right people to support you.
Do you need Investment?
While we are on the subject of finances, you need to assess whether you will need some form of external investment to get your consultancy business started and to cover the initial costs of marketing and so on.
A lot of consultants choose to fund their consulting business themselves and if you have the wherewithal to do this then we would recommend that you do the same. If you do not have the necessary capital then you will need to find it.
If you have a good relationship with your bank then you could talk to them about a short-term loan for the establishment of your consultancy business. Another way to raise funds is to talk to family members, friends and associates that may be interested in investing in your business.
We recommend that you keep it as simple as possible. It is unlikely that you would need to contact venture capitalists for investment. You might want to consider crowdfunding as an option. Angel investors are probably the best choice here.
When you want someone to invest in your consulting business then you need to show them a business plan that has all of the relevant numbers and supporting details. Of course, you will discuss your plans with any potential investor, but you must also have a business plan on paper for them to look at.
Determine your Consulting Offer and Price
You know that your ideal client will have a number of problems that you can help solve. It is time for you to determine what your consulting offer will be and what price you will charge for your services.
For your consulting offer you need to think through the actions that you will take to solve the problems that your clients have. Your clients will want results so you need to determine what these will be and how you will achieve them.
The pricing that you decide upon should be based on the results that you will achieve for your clients. It is pretty common for consultants to charge anything from $25,000 to $100,000 for consulting assignments.
You could decide to charge by the hour or as an alternative you can charge by the consulting project. Charging by the hour is the simplest solution and when you are just starting out this could be the best option for you.
When you are working out your hourly rate always remember that you will be spending time gaining clients as well as working on their projects. A client will be willing to pay a high price per hour if they believe that you can help them to achieve the results that they are looking for. It is not unusual for new consultants to charge from $150 to $250 per hour.
Although charging an hourly rate is simple for you it is not always the ideal solution for the client. If you use a project-based charging method then you can present the client with a fixed price. They will know where they stand and probably feel better about this arrangement.
In order to provide a fixed price, you need to estimate as accurately as possible the number of hours that you will spend on a consulting assignment. Once you come up with a figure multiply this by 1.5 to take account of the fact that consulting projects always take longer than you think they will.
Always look to provide your clients with more than one option when you are making your proposal to them. You could offer them a basic package charged on an hourly basis, a mid-range package that guarantees certain results and a premium package that will deliver the best results. The mid-range and premium packages are fixed prices.
We mentioned earlier in this guide the potential for residual income from your consultancy service. Identify what you can charge your client for each month and make this part of your proposal. This is something that most clients will expect you to do.
Create a Brand Identity
You are not in the business of providing consulting services but you are in the business of providing clients with results. Your branding needs to reflect this. Branding is very important for your consulting business as it provides you with a unique identity.
You are the person that can generate a significant number of leads and sales for your client for example. When you are thinking about what your branding should be, your aim should be to come up with something that will make you stand out from the crowd and will be memorable for potential clients.
Always start with the result that you know your clients want when you are deciding on your branding. If generating more leads is sales is your aim then make sure that this is front and center in your offer.
Take your time over the creation of your branding and get help with this if you need it. A consultant that has excellent branding is far more likely to succeed than one that does not have this. It is not something that you want to rush.
Create a Professional Website
While it is possible to start a consulting business without a website, we highly recommend that you set one up that reflects your branding. It is not difficult to do this yourself or you can outsource the task. The advantage of doing this yourself is that you know exactly what you want and do not have to explain this to someone else.
These days you can purchase a domain name for around $8 a year and web hosting from as little as $5 a month. Your domain name needs to match your branding. You can install the WordPress free blogging platform and then add a theme which you can get for free or purchase a premium one. The theme defines the look and feel of your website.
Make sure that you have the following pages on your website:
- Terms and conditions
There are standard templates available for terms and conditions and privacy pages or you could hire a lawyer to create these for you. Your “About” page is very important and it is something that most prospective clients are going to check out. Make sure that it includes your main message and tells clients why you are the right person for their assignments.
Get a logo created for your consulting business. You can find a good graphic designer on a website like Fiverr.com and they will design a logo for a few bucks. Have business cards created using the logo and add your website address, email address, phone number and any other contact details.
Now your consulting business is setup, it is time for you to find your first clients. In this chapter, we will look at some proven ways that you can land clients. We are assuming that there are no restrictions imposed by the coronavirus pandemic with some of these methods.
Use Social Media to Share Valuable Content
You know who your ideal client is so you need to find out what social networks they use. For the sake of simplicity, we are going to assume that they use LinkedIn. It doesn’t really matter what platforms they use as long as you have a profile there.
Make a commitment to share valuable content on a regular basis on your chosen social platform(s). Your aim here is not to give away all of your secrets, but to show the world that you are an expert in your field.
You can create content that helps your potential clients solve a minor problem in their business for example. Developing leads from social media is all about engagement. When you publish content, you want your audience to react to it in the form of making comments, liking it, sharing it and so on.
Use Paid Advertising
When you know where your prospective clients hang out you can use paid advertising to interest them in your consulting services. LinkedIn offers ads that you can purchase to reach your target audience. In your advertising message be sure to highlight the major benefit of using your services. It is probably best to use social ads rather than search engine marketing.
Network with Potential Clients
Find out what networking events your ideal clients attend and make sure that you are there as well. This is one of the best ways to make the right connections very fast. Tell potential clients what you can do for them and make arrangements for a follow up meeting or call.
Use LinkedIn Groups
LinkedIn has many groups and there is likely to be at least one that is associated with your chosen niche. Find all of these groups and join them. Don’t just blatantly try to sell your services here. You want to make connections by answering questions, commenting on posts and publishing your own content.
Get in touch with old Leads
If you have existing contacts in your chosen industry or niche then identify those that you believe would be ideal clients and contact them. Tell them that you are now an independent consultant and that you can help them to solve their problems.
Setup a Lead Generation System
Create a valuable incentive for potential clients in the form of a report that they can get for free in exchange for their email address. Make this available from your website. You will need an autoresponder service which will cost from $15 a month. Develop a series of emails that you can send out automatically that provide value.
If you want to create a successful consulting business, we highly recommend that you follow the 8 best practices below:
1. Understand what a Consult is and what they do
A successful consultant uses their knowledge and experience to help clients solve their problems. You do not have to have formal qualifications to be a consultant. Usually, a consultant will perform research and analysis and then make recommendations for a client based on what they find. Consultants are in the results business.
2. Understand the Benefits of Starting a Consulting Business
There are a number of benefits to starting a consulting business. You can earn big money and the net profits are usually high. You also have the opportunity to earn residual income. Once you are established you can work less hours and when you want. Consultancy can be low stress and it is very satisfying helping others. It is usually easy to sell consultancy services.
3. Know the Traits of a Successful Consultant
All successful consultants have a high degree of confidence. They have a realistic approach and are flexible in their thinking. Good consultants always stay on track to complete assignments. You need to be good at showcasing your skills and experience and gaining the trust of clients. Successful consultants are good listeners and have a lot of patience.
4. Avoid Consulting Myths
You do not need to be an expert on everything. Being a general consultant will not work. Charging low fees to get clients is not necessary. It is not easy to be a successful consultant but it is possible. Start up costs can be minimal and you don’t need to be on all social networks. Having many leads is not necessary and you do not need to work more to earn more.
5. Choose the Right Consulting Model
It is important you choose the right consulting model. You can be a solo consultant, go for the consulting firm model, productize your consulting services or create a hybrid from these three options. Think long-term when you are choosing your model. It is possible to transition from one to another. Create goals and plans for your consulting business.
6. Identify your Ideal Niche and Client
You need to be specific about who your ideal client is. Brainstorm ideas for your ideal client and niche. Always validate your chosen niche idea. Find ideal clients on LinkedIn and then contact them to introduce yourself and to find out what problems they have and whether they would be in the market for your services.
7. Setup your Consulting Business Properly
Decide what type of business entity you will create for your consulting business. Keep thorough financial records and consider hiring a bookkeeper. Assess whether you need investment for starting your business. Determine your consulting offer and your pricing. Create a brand for your consultancy and create a professional website and business cards around this.
8. Get Clients for your Consulting Business
Identify the social media channels that your potential clients use and create profiles on these. Post valuable content on your profiles. Consider using paid ads with the social networks. Network with potential clients at events. Find LinkedIn groups in your niche and contribute. Identify existing leads and contact them. Setup a lead generation system on your website.
If you have read this guide from start to finish you will have a good understanding of how you can start a successful consultancy business. It is important that you do not just jump into this without knowing what you are doing.
Now it is over to you. While reading this guide will make you a bit smarter, only by taking action will you be able to create and launch a profitable and successful consulting business offering services that will delight your clients.
We hope that you found this guide to be informative and useful. Get started today with your consulting business. We wish you every success with the creation and launching of your successful consultancy business and attracting the right clients for it!