Starting a Consulting Business
Starting a consulting business can be done in many ways based on the steps below. Whether it is computer consulting, business consulting, marketing consulting, etc., the steps for the start-up process are the same.
The clearer your vision of the type of consulting business you want, the easier it will be during the start-up phase!
Doing more research before you start will lead to better decisions and a better outcome. If you have a strong background in consulting, that’s a plus.
I suggest you find out as much as you can about running a consulting business before starting. There are many ways to do so, and this topic goes beyond the scope of this article.
The good news is I have a separate article that outlines the steps and will give you an inside look into a consulting business. For more, see An Inside Look Into the Business You Want To Start.
2. Choosing a Location
Choosing the area where you’re going to operate is a very important step and a contributing factor to your success. If you locate in an area with no demand for consulting, your chances of success are slim.
On the other hand, if you operate in an area with a lot of competition, it may not be easy to get a piece at the market. Your ideal location is an area with a demand for consulting services, and the market isn’t saturated.
You’ll also want to consider if you’re going to start as a home-based business or if you’re starting from a commercial location. For example, suppose you’re planning on a one-person operation. In that case, it’s perfectly acceptable to start as a home-based business. However, if your business expands, you can always move to a commercial location. For more, see Choosing the best location for your business.
3. Choose a Business Name
Choosing a name for your consulting business is another important step. You will want a name that is memorable and professional. Company names rarely change; therefore, you want to take the time needed to choose the right one.
I suggest coming up with a list of 10 to 15 names and leaving it on the side for a few days. You will see your list from a new perspective when you return to it. Your next step is to choose the top five from your list and check if they are available for registration along with a matching domain name.
After you have your top five, ask for feedback, use them in sentences, and print them out to see how they sound and look. Then make your final choice and register your business name along with a matching domain.
For more on business names, see the following:
4. Legalizing Your Business
In this step, it’s time to make your business legal and choose the correct business structure.
There are many structures to choose from. Many new business owners start off with a sole proprietorship because it’s simple and the least expensive to set up. It’s worth mentioning a sole proprietorship can only be owned by one person, and in the eyes of the law, your business and you are one entity. So if you are faced with a lawsuit or if the business goes bankrupt, your personal assets are at risk.
Another popular choice is a limited liability company (LLC). Which offers asset protection and tax benefits. Another option is to start off as a sole proprietorship, and once the business gains traction, you can always switch the same business to a limited liability company.
I suggest speaking with a lawyer, an accountant, or a professional service that specializes in setting up companies to identify the best route to take for your situation.
For More on Business Registration, See:
5. Create Your Corporate ID
The corporate ID is a part of branding your business. It consists of many components such as business cards, your logo, website, stationery, business signs, etc.
Having a professional design is crucial because your logo makes an impression on your customers, and you want it to be positive.
For More on Corporate IDs, See:
6. Estimating Your Start-up Cost
Your start-up cost will depend on the size of your business and your setup. For example, suppose you’re considering an office in a commercial location. In that case, that will naturally cost a lot more than operating as a one-person operation out of your home.
When considering start-up costs, it’s important to be as accurate as possible because if you’re planning on getting funding, you’ll need an accurate estimate. If you estimate too high, it will be difficult to get funds. On the other hand, if you estimate too low, you could run out of money before you even start. For more, see Estimating start-up costs: are you missing anything?
7. Writing a Business Plan
Writing a business plan is an essential step. It takes time to create one because many sections and many questions need to be answered. But once you write one, you’ll have a clear idea of where you’re going and how to get there.
Your business plan is something you want to look at from time to time to ensure you’re still on track and make adjustments to the plan or the business as necessary.
A business plan is also required if you’re planning to get funding or attract investors. A financial institution will not even process your loan application without a professional business plan in hand.
There are a few options for creating a business plan. You can write it yourself, use a template, use software to guide you step-by-step, or hire a professional business plan writer. Keep in mind no matter what option you choose, you are the one that has to provide the information for the questions that need to be answered. For more, see how to write a business plan.
8. Banking Setup
The next step is to set up your bank account. You must separate your personal and business transactions. One of the easiest ways is to set up a business bank account. If you’re looking for a start-up loan, you’ll naturally be setting up a bank account with the institution that approves your loan. On the other hand, if you’re not getting a bank loan, you’ll probably go with your current bank and open up a separate account.
For More on business banking, see the Following Articles:
9. Get Funding
As mentioned earlier, if you’re planning on a large-scale operation with a commercial location for office space, you may need to take out a loan for your consultant business.
However, it’s important to note that banks view start-up business loans as high-risk, and that’s because many businesses fail in the first few years of operation. Therefore, they would rather fund an existing business with a good track record instead of taking a chance on a new start-up. With that being said, it’s not impossible to get a business loan, but you must have enough collateral strong business plan, and experience helps.
If your business loan is declined, find out the reasons and address what you can before moving to the next lender instead of getting disappointed.
10. Get Your Business Insured
Insurance is a must, especially if you’re operating out of a commercial location. Speaking with a competent insurance broker can advise you on what type of insurance you need.
You may want to consider professional liability insurance to protect you in case of a lawsuit. Interruption insurance is another type of coverage you may want to ask about. Interruption insurance keeps a portion of your revenue flowing in case of a fire or flood etc., and your business had to be shut down for repairs. For more, see our page about business insurance.
11. Office Setup
As a consultant, most of your time will be spent in the office; therefore, you want it to be functional and fully equipped so that you’re productive and can plan effectively. For more see, Here are considerations for the setup of your office.
12. Hiring Employees
In the beginning, you may be planning to do everything yourself, and it’s a good idea because you want to keep costs down as much as possible.
When demand for your services exceeds your ability to service your customers, you will need to hire people to service customers, manage your business, or both.
Maintaining a strong workforce begins with the hiring process. When you hire the right people, that contributes to your operation’s success. Conversely, hiring the wrong people can lead to the downfall of your business. For example, if you consider a small staff of five people, the yearly costs are in the six-figure range.
When hiring someone, look at the overall cost versus what you pay weekly or hourly. When you look at the overall cost, you see the expense differently. It’s also worth noting to only hire for those positions that are needed. Overstaffing is a problem in business and something you want to avoid. See How and when to hire a new employee for more on hiring.
This section will go over resources you can use during the start-up phase and when your business is up and running. Since most of the resources lead to search engine results, you’ll have access to the latest and most popular information.
Industry Trends and Statistics
When looking at trends and statistics, you understand the industry and identify if it’s rising or declining. You also gain ideas for services you can include in your business. Click here for the latest google search results related to trends in the consulting industry.
It’s important to understand the terminology for your business. You will pick up a lot of it from experience, but you can go over the terms available right now. Below you’ll find a link to industry terms. In addition, search for terms related to your consulting business.
For example, if you’re starting a computer consulting business, then search for computer consulting terminology and computer terminology so that you’re up-to-date with all the terms you need to know.
Publications are another great source to expand your knowledge and expertise while keeping up with what’s new in your industry. There are various sources out there, such as blogs, newsletters, industry publications, etc. The link below is easy to find many of the publications available today.
Associations are sources to help you stay in touch with your industry and expand your knowledge. Many associations host events where you can attend to network with other people in the industry. Associations also offer tips and insights into the industry. The benefits of joining an association usually outweigh the cost.
You may also want to consider joining your local Chamber of Commerce to network with local business owners in your area.
Click here to view associations related to the consulting industry. You may also want to check out our page for tips and insights about Joining a trade association.
Top Consulting Businesses
By looking at other consulting businesses, you can understand how they present themselves and gain an overview of the competition. By studying many businesses, you may find something that they’re all missing and put that in place in your consulting business. You may also come across an idea of a service that they provide that you haven’t considered and put that into place to make it work in your business.
Without customers, you don’t have a business. Without marketing, you won’t have customers. Marketing can be complicated, or it can be simple. Take a simple route and think of it as bringing awareness to your business.
You can study many of the marketing techniques out there and use one at a time. Once you succeed with one technique, move on to another and put that in place. If you used one successful technique every month, in 12 months, you’d have 12 techniques that work in the background bringing awareness to your marketing consulting business. Have a look at the latest articles for marketing a consulting business.
Whether you are experienced or not, it’s a great idea to keep up-to-date with the latest tips and techniques related to consulting. Take some time to look at available tips and study those that make sense. Have a look at the search results for tips related to consulting.
Books are another excellent method to expand your knowledge on virtually any topic. You can flip through the table of contents and go directly to the chapter you find interesting regarding nonfiction books. You don’t have to read the book from cover to cover to get the information you want. View the most recent Google search results for consulting business books.
Looking at available consulting business courses allows you to expand your knowledge and understand various consulting techniques to help your clients achieve their goals and get the message across. As a consultant, it’s important to keep improving your skills. So take some time to browse the courses related to business consulting. See Google’s search results related to a consulting business.
The news is another excellent resource to keep up-to-date with the industry. I like using Google’s new site because I type in my keyword, and I immediately get a list of the most relevant and archived topics. It’s also worth noting that the articles listed are newsworthy; therefore, I pay attention to them. See Google’s news search results related to the consulting industry.
Videos on YouTube
Videos are another excellent source of information, especially for visual learners. I’d rather watch a video than read an article, but that’s my personal preference. When you type the keyword into YouTube, you’ll get a list of videos, but watch the sidebar that displays a list of relevant topics. I often find I haven’t even considered those, and they contain good information.