Selling your expert knowledge as a service (i.e., consulting) is a lucrative and growing business. According to IBIS World, the management consulting industry is worth more than $255 billion. The consulting business is no longer limited to large firms like Deloitte, KPMG, and McKinsey. Individuals can take advantage of this business opportunity to earn income.
What Is Consulting?
According to Vault.com, “Consultants are professionals who provide expertise to organizations to help them maximize their profitability or effectiveness and keep them running smoothly.” There are multiple types of consulting, including management consultants, marketing consultants, leadership consultants, technology consultants, and much more. Most consultants serve business clients, though some serve other organizations like governments, non-profits, and charities.
5 Steps To Start Your Consulting Business
Getting started in a consulting business is easy when you take it one step at a time.
1. Define Your Consulting Service
Your first decision as a new consultant is to define your consulting service. As a consultant, you will help businesses solve challenging problems and provide advice. Start by reflecting on the skills and experience you already have.
Make a list of your skills by doing the following exercise:
- What jobs have you had in your life? Make a list of the critical skills you used every day in those jobs.
- What professional certifications or degrees do you hold? For example, if you have a Salesforce certification, you may start a consulting business focused on Salesforce technology.
- What business problems and challenges interest you the most? Do yourself a favor – focus your consulting business on problems and challenges you find interesting. If crunching numbers irritates you, stay away from financial and analytics consulting.
- What skills are you most interested in learning? If you want to change direction from your previous jobs, ask yourself what skills you would like to learn. Please keep in mind businesses expect expertise from the consultants they hire, so you will need to work hard to develop your skills to a high level before working with a client.
Here are three examples of consulting services you might offer:
- Technology Consulting. You have deep expertise in Microsoft Excel and Google Sheets and decide to consult with businesses that need to improve their efficiency.
- Financial Consulting. If you have worked successfully as an accountant or tax professional, you can offer financial consulting services to clients.
- Digital Marketing Consulting. Businesses are always looking for ways to acquire new customers. If you have expertise with digital marketing methods like Facebook advertising, search engine optimization (SEO), or other methods, you can offer that service to clients.
Tip: If businesses pay employees to perform a specific function (e.g., sales, marketing, finance, human resources, customer service, etc.), there is a good chance that you can build a consulting business around that function.
2. Identify Your Target Market
Your next step is to choose your target market as a consultant. As a consultant, you have limited time and energy to work with clients. Therefore, focusing on a single target market makes it easier to develop expertise and build a reputation.
There are a few ways to choose a target market. Review these options to see which approach appeals to you.
- Industry. With an industry focus, you would choose to work with clients in the same industry. For instance, a consultant with prior work experience in Wall Street might choose to work with investment management or asset management companies.
- Region. A regional focus means you decide to focus with companies in your city, state, or local area. A regional focus makes sense if you particularly like local networking and your area has significant business opportunities. For example, a technology consultant might choose a local focus on San Francisco because there are many technology companies in that area.
- Function. A functional target market means you will apply your consulting skills to a specific department within a company. Some companies provide advice to finance departments, tax functions, sales teams, and other functions.
As a consultant, you can always change your target market later. A consultant might start with a regional focus on their local city and find that there is no enough demand for their services. In that situation, switching to an industry or function focus makes sense.
3. Earn Client References
As a new consultant, you face a significant challenge. You will probably not have any client references or case studies. As a result, potential clients may not feel comfortable working with you. There are a few ways to solve this problem.
- Focus on your network. Reach out to business friends, former managers, and others who already know, like, and trust you. Many consultants find that their network gives them more than enough opportunities to get started. Using this technique is simple. Call or email two or three people you know each business day and tell them about the problems you can solve. By reaching out to your network for a few weeks, you have an excellent chance to earn at least one client project.
- Reposition prior work experience. Reflect on your non-consulting work experience. For example, what problems did you solve in your last few jobs? For example, you might have successfully saved a company $1 million from their tax bill by using your expertise. In that case, ask your former employer for permission to use your experience with them as a short case study.
- Explore non-profit opportunities. Charities, associations, and non-profit sometimes need consulting help. Consider reaching out to organizations you already belong to and offer to consult with them. If possible, insist on a fee and a testimonial you can use on social media and your website.
- Update your pricing. As a brand new consultant, you might dream of earning six figures or more. However, clients are unlikely to be willing to pay you that much money to a brand new consultant. Therefore, you might offer a discount to the first few clients. If you adopt this strategy, clearly state on your invoice to the client that you are offering a temporary, one-time discount.
After you have two or three client references from past projects, you can move ahead with increasing your prices. For more ideas on ways to charge higher consulting fees based on the value you provide, read “Value-Based Fees” by Alan Weiss.
4. Promote Your Consulting Business
Promoting your consulting business is critically important. At first, you might have no clients at all. In that case, develop a business development habit. By consistently promoting your expertise, you have
Use the following ideas to promote your new consulting business. Keep in mind that promoting your business almost always requires money, time, or both.
- Public speaking. Delivering presentations about your expertise is one of the best ways to become known in your field. As a new consultant, it is often easier to speak to small groups. For example, a technology consultant who works with startup companies might apply to speak at a Startup Grind event. Your business development for public speaking is simple: reach out to an organization for a speaking opportunity each week.
- Writing for industry publications. Prefer to share your expertise in writing instead? In that case, look for industry publications, blogs, and magazines that accept contributors. Before you invest time contributing an article, make sure the publication is relevant to your audience. For example, a consultant specializing in serving the dentists might contact the New York State Dental Association about contributing an article to the association’s publications like the New York State Dental Journal.
- Contribute to relevant LinkedIn groups. Spend some time searching for relevant industry groups on LinkedIn. LinkedIn users are generally focused on business issues, so it is an excellent platform to promote your expertise. Set aside 15 minutes per day to post answers to questions people ask about your expertise to get started.
- Online advertising. You can also pay to show ads and videos on platforms like Facebook, LinkedIn, and Google. If you lack the experience and budget to use online advertising, use the other promotional strategies outlined above.
5. Leverage Digital Tools To Grow Your Company
The Internet is a powerful way to build your business as a new consultant. Here are two ways you can use digital tools to grow your consulting business.
- Make it easy for clients to pay you. Before you do anything else, make sure that clients can pay you. For example, setting up PeachPay is a good option because you can accept payments by credit card and ACH. In just a few clicks, clients can pay you for your services.
- Set up a website. As you start to earn more money, you can invest more effort into building your online business. For example, you can set up a new website using WordPress so you can easily publish blog posts about your expertise.