15 Steps to Starting a Consulting Firm

You have taken time to train and work for other people. And now all your hard work has paid off – you are the expert. For now, you want to know How to Start a Consulting Firm and Start Working for Yourself. In fact, being your own boss and living your life on your own terms, not to mention setting your fees, leads you towards a financial freedom.

A consultant has a lot to offer. So why are you still working for others? If you're like many potential consultants, you just don't know where to start. Maybe you are wondering, so worry no more.

I detail in this article, in a practical way, all the steps to set up your own consulting firm. Are you ready to take the leap?

Let's go

🥀 Step 1: Choose your niche

When starting a consulting firm, it will be much easier to differentiate yourself from generalist consultants. Especially in the long run, if you specialize.

Think about it. If you had lung cancer, would you go to a GP or a lung cancer oncologist? You would go see that lung cancer specialist. This is the best chance you have of solving your unique problem.

It's the same for companies that need consultants. They will spend their hard-earned money to hire a specialist. They want some assurance.

In fact, a consultant is an expert in a particular field. Knowing that you are an expert on their problem will boost their confidence in your ability to do the job. Consultants who are specialists will appear the most qualified to help and will be the most attractive to clients.

You may find that your niche reveals itself effortlessly. This is perhaps the area in which you have the most expertise in your industry. Or, it may be the niche you find the most fun and exciting.

Whatever niche you choose, don't make the mistake of trying to be the right person for every customer. A good consultant defines a specific calling and then markets their skills to that niche audience. So, before creating your consulting firm first define your niche.

✔️ How to choose a good niche?

Most likely, you have already taken steps to discover the areas in which you are a true expert. Maybe what you're already doing inspires you. Otherwise, here are some areas that may inspire you:

• Accounting, auditing. Every business needs accounting. They are looking for people who will check their financial, human or legal records.
• Publicity. Help companies with their online and offline advertising campaigns.
• Coaching other consultants. Suppose you were successful as a consultant. In that case, you might also consider a consulting firm that offers a coaching program for consultants, including expert advice on starting and growing their consulting firms.
• General affairs. Coaching and general business advice to help business owners overcome a variety of obstacles. You can even set up a formal or informal coaching program for clients and potential clients.
• You also have areas such as insurance, legal services, legal consultations, project management, marketing, etc. Just pick the area that's right for you.

Communicating directly with prospects who need your expertise will produce the best results.

And if you feel you need to supplement your experience and skills with special training, take advantage of the opportunities to do so. This is true even if you are an expert in your field.

You may be a good consultant, but depending on the consulting business model you choose, you may need special training to give clients certain types of expert advice.

🥀 Step 2: Consulting firm templates to create

Although you are an expert in your field, a successful consulting firm may require you to develop special skills.

For example, you may be called upon to speak in public, train others, identify problems and weak points within teams or processes, analyze and present data and make written proposals or verbal.

You'll also need to find a consulting firm model that matches your skills and goals.

✔️ The independent consultant model

As an independent consultant, you will work closely with your clients. You will carry out the project and all the deliverables yourself. If you want a lightweight and flexible consulting firm, it is a good model for you.

✔️ The consulting business model

When you open a consulting practice, you have the responsibility of running the practice and working on client projects. This will give you additional responsibilities and allow you to hire other consultants and support staff to build and grow a larger consulting practice.

If you don't like managing people or focusing on the day-to-day business of running a business, this might not be the ideal consulting firm model for you.

✔️ The hybrid board model

In this variation, instead of providing direct consulting services as a solo consultant or through a consulting firm, you create products based on your knowledge.

For example, you can create a learning process and program that you sell to others for a fixed amount or a monthly price. This model allows you to reduce your daily work and create a salable asset that works while you sleep.

Today, many successful consulting firms follow a hybrid model. It is a mix of two or more of the consultation models above. You choose what you want to do and create a consulting firm that focuses on those things.

🥀 Step 3: Define your offerings or consulting services

If you want your consulting firm to succeed, you need to show your potential clients the specific consulting service you will offer and provide. Define your services, deliverables and consulting firm model when starting a consulting business.

You can start by assessing your skills and thinking about the general consulting services you want to offer. But, you must define the specifics of your consulting offer before working with customers.

This is vital for three reasons:

• You need to articulate your consulting service to convince them that your services are valuable.
• You will need to charge fees that will allow you to run your business sustainably.
• Specificity helps set realistic expectations for your customers and potential customers.

This last point benefits you and your customers. Your customers can make comfortable and informed decisions. And you can prevent customers from taking advantage of you.

Although you cannot completely prevent the " scope creep being clear about what a customer is paying up front (and getting it in writing) will help establish realistic and achievable limits that both parties can agree on. And, most importantly, it will also clearly define the value proposition for your consulting firm.

🥀 Step 4: Write a good business plan for your consulting firm

People make a lot of mistakes when starting a new business. They rush before considering the essential aspects of their business. Although writing a business plan is not mandatory, it can help you crystallize your ideas and avoid many mistakes.

Studies show that entrepreneurs who take the time to write a business plan when starting a business are 2,5 times more likely to follow through and get their business off the ground. The work involved in creating a business plan also helps new entrepreneurs learn skills that will be valuable to them later.

You don't even have to write a traditional 100-page business plan. Get in touch for writing your business plan or read this complete guide on writing a business plan.

🥀 Step 5: Hire an experienced business lawyer

✔️ Hire a lawyer who adds value

We have met and sat across from many lawyers who are business killers. Overzealous and often inexperienced, they focus on the wrong issues and forget that their client needs the case to move forward.

When talking to the lawyers you're considering hiring, ask them about a tough negotiation or two and how they overcame the hurdles.

✔️Don't make cost your main criterion for hiring a lawyer.

Often, the cheapest lawyers are also less experienced. Paying a cheaper hourly rate may seem good at first. In the end, you could end up paying a lot more than if you had hired an experienced (more expensive) attorney in the first place.

Make sure your attorney is familiar with the particularities of consulting firms and has experience. Also, be clear about your budget and expectations. Your attorney needs to understand that your budget is limited and they shouldn't waste that budget on irrelevant details.

✔️ Hire a lawyer who listens to your needs

Your lawyer won't be of much use to you if he doesn't respond when you need him. Since many transactions are time-sensitive, make sure your attorney will be there for you when you need them. After all, a client won't wait weeks for your attorney to review a draft consulting agreement.

✔️When to hire a lawyer?

In general, the best time to hire a lawyer is before you start your business.

Too many people make the mistake of starting a business and reaching a co-founder deal without consulting a lawyer. In some cases, some co-founders leave and the others are left to try to make the business work. A good lawyer will help find the right business structure for your consulting firm.

🥀 Step 6: Decide on the legal structure of your consulting firm

There are many types of corporate legal structures for various business entities. For new business owners, choosing the best business entity for your business can seem overwhelming.

Do not rush to decide to register your business immediately. For example, even if a individual business can be quick and inexpensive in the short term, it can expose you to more risk, create unfavorable tax treatment and create problems for you in the long term.

A limited liability company (SARL) might make more sense for most consulting firms.

Spend some time reading about each possible entity your business could fit into. Determine what business structure is most useful for your business.

🥀 Step 7: Set up accounting and bookkeeping for the firm

business accounting is how your business records, organizes, interprets and presents its financial information. Accountants analyze a company's financial condition to help the business owner make better decisions.

Accounting is the recording, organization, storage and retrieval of financial information related to your business.

Accounting and bookkeeping overlap. The main difference between the two is that accounting is how you record and categorize financial information while accounting uses information through analysis, strategy and tax planning.

✔️ Start by hiring an accountant

A good accountant is not the same as an accountant. Many business owners hire an accountant with simple goals in mind: to organize myself, get my bills paid, and prepare for the work that will be assigned to the accountant.

Many consulting firms will use an outside accountant. The latter must be regular at the firm to regularize all entries, pay all invoices and manage invoicing and receivables.

Having help with this aspect of running a small business can be invaluable, and the time it can free up for a busy owner, invaluable.

And, best of all, an accountant doesn't have to share your office space with you. They can work effectively remotely or visit your office one day every few weeks.

✔️ An accountant can help you organize your financial information

Every business, from the smallest hot dog to the largest public company, creates data. Sales data, inventory data, employee data, customer data. The list is endless. And like any type of data, if the data is not organized and accessible, it is completely useless.

✔️ You will find that this is particularly relevant for your consulting firm

With accounting data, this is doubly true, and the speed at which a small business can fall behind can be mind-boggling. Even a few weeks of unrecorded sales transactions or a month of unmailed invoices can quickly overwhelm a small business, destroying its cash flow and putting it out of business sooner.

A good accountant can help you set up a filing system, organize and pay your bills on time, ensure that customer invoices are sent out promptly, and put plans in place that will require you to do these things regularly. disciplined and organized manner.

A good accountant can also help you set up and track an invoice finance loan if you need to expedite customer payments, but customers insist on paying 30 days or more after receiving your invoice.

🥀 Step 8: Assess your finances

corporate finance uses your company's financial information to help you manage your money and make your business operations profitable and sustainable.

This is important because you need to determine how you are going to finance your new business and how you are going to grow it. If you don't understand the numbers, you'll struggle to build a sustainable, profitable business.

Be very careful about conserving your funds when starting a business. Don't spend too much. Some purchases will be necessary and logical for your business, but others, like expensive and unnecessary equipment, will threaten the survival of your small business.

The good news is that most successful consultants can run their business without huge costs in the beginning until they build up a portfolio of customers and can spend a little more on equipment and supplies.

To keep track of your finances, you will need to set up a bookkeeping and accounting system. We talked about it above. This is important for you to understand your business cash flow and will also be necessary for tax reporting purposes.

Your accounting and bookkeeping system will include income, expenses, capital expenditures, profits, losses, etc.

🥀Step 9: Develop your brand identity

THEbrand image offers a reassuring level of professionalism that very small businesses may struggle to establish.

So don't think you can afford to leave your brand identity to chance. It's hard to build a successful consulting firm if you don't take seriously about branding. The importance of your brand identity should not be underestimated.

Consultants must be seen as credible experts to gain the trust of their clients. A weak brand identity will undermine that credibility. A good design is good business, not only for your customers but also for you.

In other words, you must “ walk and talk ". This includes things like a personalized email address and a domain that matches the name of your consulting business. For example: [email protected]. People think less of consultants who use Gmail or Yahoo email addresses.

🥀 Step 10: Complete the paperwork

There's a lot to think about. We have already covered the requirement that you choose the legal structure of your new consulting firm. The business structure you choose is not obvious. This will impact you and your business for years to come.

An experienced business lawyer can help you. After determining the legal structure of your business, you will need to complete the necessary paperwork. Remember that most states require you to register your business if the trade name under which you operate your business differs from the legal trade name.

Plan for all the necessary business, legal, and logistical considerations, and you'll create a solid foundation for the future success of your consulting practice.

🥀 Step 11: Educate yourself financially

Financial education lets you understand the language of money and track your numbers yourself. For example, you must understand the evolution of your expenses from the start of your activity. These costs may include:

Once you know how much it will cost to start, compare it with your actual funds. Then plan how you will make up the difference.

Running smart calculations to figure out how much it will cost to run your business will allow you to plan and think about pricing.

✔️ Set your fees

To create an innovative and effective pricing structure, you need to start by knowing how much it costs you to run your practice (your operating costs). Although there may always be unexpected expenses, start-up costs must all be taken into account.

But your operating costs are just a starting point. It is also essential to save costs. Otherwise, it will be difficult to sustain your business over time.

You may dream of owning your physical consulting agency – or maybe you dream of working from a home office or even traveling while consulting clients around the world.

Regardless, for a consulting business to scale and grow, you need to charge rates that support the style of business you choose to run. Once you've done the math, it's time to start considering the less tangible aspects of pricing – competitors' prices and perceived value.

✔️ Competition and perceived value

Your potential customers are most likely doing research — and they're also thinking about your competition. Consciously or not, they collect data on what they think services like yours should cost.

This means you also need to be aware of what your competitors are charging. You might think that your services are worth more or that you want to charge fewer new customers than your competitors. And it's good.

But, if you are completely unaware of what your competitors are charging, you may miss the mark entirely. So it can be very expensive for you.

Perceived value is the amount a customer thinks a service (or product) is worth. And your competitors' prices are part of that perception. But, not the whole picture.

Your time is valuable and you need to earn a living. But your customers and potential customers won't care. They will care about the tangible results your services provide for their business. The more they have to earn, the higher the perceived value.

✔️ How to invoice your customers?

Ultimately, consultants charge for their services in one of three ways. An hourly rate is a flat rate, paid for each hour of work. It's based on your expertise, and clients only pay for the time (total number of hours) you spend working for them.

You need to track your hours using this approach, and clients are likely to have questions if the work you're doing is taking significantly longer than expected.

A project price offers clients an all-inclusive price based on the scope of work on a project-by-project basis. You take the risk that the work will take longer than expected.

Project rates can work well if it takes you less time to complete the project. They can create friction with changes in scope of work and adjust the project rate to reflect scope changes.

They can also invoice in the form of Provisions. A provision is a fixed amount of money that a customer will pay you per month, per week or per day. This type of rate is ideal when you are providing ongoing service to a customer that cannot be precisely defined in time or varies from week to week or month to month, but generally within a reasonable range.

It's up to you to see which of these approaches suits you best.

🥀Step 12: Build an online presence

As we explained earlier, today it is impossible to reach most customers without a website. This is especially true for new small businesses and startups trying to compete in an increasingly noisy world. But this is also true for large companies.

You do not believe me ? A recent study shows that 97% of consumers research their online purchases before buying something.

Your website is a crucial part of your marketing and branding strategy. So put this essential business tool to work for your consulting business. Start by making sure your website design truly embodies your consulting brand. Visitors need to understand who you are and what your brand is about as soon as they arrive.

Your website's visual design and marketing copy should project your brand's voice and identity. Here are some suggestions:

In addition to serving as a brand ambassador, your company's website is also a great place to showcase your consulting successes to a wide audience.

Consider sharing testimonials and case studies from satisfied past customers. You might even want to integrate an online store into your website to sell your exclusive books or consulting tools (Check out our store here).

Finally, a solid website creation will give credibility and legitimacy to your business.

🥀 Step 13: Create a sales plan

Since a consultant is often the only member of their team, you will need to become familiar with sales yourself. If you are a sales consultant, you should already be a sales expert.  

But if your consulting business focuses on another area (Finance for example), you need to think about your sales plan and develop a game plan for selling yourself and your services. Your sales plan will make the difference between success and failure. And that's where a little practice will help.

Take the time to develop and rehearse your " elevator pitch until you can deliver it comfortably and confidently. This 20-30 second explanation of what you do should be intriguing and dynamic.

And it should help people tell others about your consulting business. After all, the best sales channel for most consulting firms is the " word of mouth ».

You'll want to develop both an overall sales strategy and a list of daily tactics that will move your sales efforts forward. You may need to hire an employee or contractor to complement your sales team.

If you're not selling your services, chances are no one will. So, be sure to make sales a part of your day every day. Create an email list and stay in touch with your customers and prospects.

✔️ Sell ​​your services online

You might be wondering why you would need an e-commerce store. And maybe not.

But, if you've written a book in your area of ​​expertise or have your own proprietary counseling materials, you might consider making these resources available for purchase online. Passive income can be helpful in bolstering your bottom line and providing an important safety net during lean seasons.

So here are some things to consider if you decide to supplement your consulting income by selling online.

Sell ​​your products on 5euros.com or simply on upwork.com. In short, you need to find a freelance site where you can sell your services. Here is a premium training that clearly explains how to make money on 5euros.com.

🥀Step 14: Get to know your consulting firm

✔️ Advertise….

One of the ways the most effective Building a reputation in the consulting field and gaining clients is to share your expertise with as many people as possible.

A central part of your prospecting should aim to reach groups with your message…. get pretty much any podium you can at the start. You will find that talking leads to more talking and more talking leads to better talking and better talking leads to customers.

Networking at industry events your customers attend can also be helpful. You will learn about industry trends and also have the opportunity to network with clients and potential clients. These potential word-of-mouth referrals will help generate new business leads.

And also look for opportunities to attend events focused on the consulting industry. You may find that networking with others in the consulting field helps you connect with new sources of business and new clients.

And, you'll learn from other consultants how to develop a compelling value proposition when selling your consulting services to clients.

✔️ ……How? 'Or' What ?

Whenever you make personal appearances, make sure you have business cards and brochures if attendees would like to learn more about your services and include a phone number and other important contact information on your business card. While many people prefer email, it's not easy to build trust with potential customers using email alone.

Experts recommend that consultants include the following information in any marketing brochure.

✔️ Make some Content marketing

You may consider writing an ebook on your particular area of ​​expertise. And, blogging is another effective content marketing strategy.

Don't reveal all your secrets, sure. But, be sure to offer valuable insights from your unique perspective.

Blogs and e-books are great ways to establish authority (especially in a niche market), build your organic search ranking through strong SEO practices, and collect email leads. mail.

✔️ Usesocial media

As a promising new business owner, you'll also want to take full advantage of the inexpensive and easy exposure that social media marketing offer you. As we explained earlier,

Social media...allows you to build social relationships with current customers, while building low-pressure relationships with future buyers.

Maintain (at a minimum) a presence on Facebook, LinkedIn, etc. will help you build a loyal following. Help visitors see what your consulting services are all about by posting tips and observations and sharing any articles you may have written.

Establish yourself as a subject matter expert and build relationships with current and future customers by maintaining an interactive presence. This will reassure your audience that you are accessible, knowledgeable and reliable.

🥀 Step 15: How to Find Partners for Your Consulting Firm

As with any aspect of your business, start by seriously thinking about the issue. Here are some questions to get you started:

In any relationship, it is essential to know what you hope to gain. Relations with partners and investors can take a multitude of forms.

• Are you just looking for someone to invest some capital?
• Where are you looking for leads, someone to share costs with, or exposure and success through association with an established brand?

Only you know what is most useful for your business. Choose the business partner that makes the most sense to you. But, you need to know what your goals are before meeting a potential partner or investor.

✔️ Crowdfunding

The sites of crowdfunding as Kickstarter et Indigogo offer the opportunity to raise funds from a crowd of strangers.

These fundraising projects are easy to set up and allow you to raise funds without granting any investors or partners any influence over your consulting business. However, you will need to follow through on all promises made to your funders.

If you want a true business partnership, crowdfunding may not be the choice for you. And that’s often not a good fit for consulting businesses. But every business, including the consulting firm, is unique.

✔️ Angel investors and venture capitalists

Angel investors and venture capitalists offer a more traditional route to raising money for your new consulting business. If you are considering starting a consulting agency instead of going it alone, this may be a option to consider.

But, you will have to work hard to sell business investors on the financial viability of your business. This is especially true at the beginning. Few investors are willing to invest early in a consulting business.

On the other hand, if you have a successful consulting business that you are looking to grow, it will be easier to find interested investors, especially if you are consulting in the technology field.

More be ready investors expect to play a significant role in your business. After all, these investors are investing their money in your consulting firm in the hopes of making a return on that investment. So, they will want to make sure that you are running your business in a way that can ensure that return.

✔️ The partnership

Business partners can take many forms. A true business partnership occurs when both partners invest equally in the success of the business. Both partners devote equal finance, resources, and labor to running the business.

But, if you don't already have a deeply committed partner by your side, you can also establish more casual or temporary partnerships with existing brands or other consultants.

Look for brands or consultants that complement your services rather than competing for your business. And make sure you share the same goals for your partnership.

🥀 Step 15: Find the right helper

Eventually, if all goes well, you'll hire employees to take the chores off your plate so you can focus on serving your customers.

But employees must be paid. So, at first, you should only hire for positions that will provide the most immediate benefits to your business.

There is no single right answer for what these positions could be – each consulting business is different. But when considering which positions to hire for, consider which aspects of the business pose the greatest challenges.

🥀 Consider your limits

If you're a newbie to marketing, consider hiring a marketing manager to help you strategize your business. If you are unsure about billing and figures, hire a specialist billing to manage accounts and ensure payment collection.

Hire an employee who is an expert in the areas your business is currently lacking. Building a strong and well-rounded team will create a stable foundation for your business.