Launching a business of any kind is challenging, but starting one whose goal is to help others run more effectively is even harder. No matter if your area of expertise is human resources (managing a company’s workforce, including sourcing, selection, hiring, and ensuring compliance) or some other consulting service that will help other businesses in improving and expanding, a niche is typically an excellent place to look when figuring out how to start a consulting business. You can always hire small business consultants to gear up your productivity.
Five stages to starting a consulting business
As work processes become increasingly complicated and our economy grows worldwide, the demand for competent consultants has never been higher. According to IBISWorld, consultancy business sales will surpass $261 billion in 2020.
The founder of 4 Point Consulting in Chicago, Christy Hopkins, states, “It’s cool right now to say you’re an independent consultant.” “I give human resources consulting services to numerous small businesses across the country, and my services vary based on the customer. The same item can be done differently if the culture and needs are different.”
Once you have identified a niche for the type of consulting you provide, explore the steps below to position yourself as an industry leader.
Step 1: Evaluate your skill set and strengths
Businesses typically employ consultants to handle problems they cannot resolve on their own. If you are unfamiliar with their business, why else would they pay you to come in and offer them directions? Starting a consulting business requires extensive industry knowledge to provide clients with value.
There are many consulting services that your business should consider. For instance, you may start a job as an IT consultant if you have extensive computer knowledge.
Furthermore, there are several prospects for those with expertise in corporate strategy, accountancy, online marketing, and public relations.
To evaluate your weaknesses and skill gaps, you can focus on closing them. Getting accreditation from the National Society of Fundraising Executives is beneficial if you are a fundraising consultant.
Step 2: Ascertain your market’s requirements
Once you’ve chosen your specialization, think about the worries, problems, and pain points businesses in your chosen field of expertise have. It is insufficient to have a robust skill set and a plethora of knowledge in your field. You’ll be left floundering if businesses don’t have issues that your consulting organization can assist them with.
The best way to find out your market’s needs is to ask. Start looking for blogs in your niche online. What subjects are the thought leaders? Where does it seem to be muddled? Are forums or comment sections having a heated debate on a particular subject?
If you want to start a digital marketing consultant extensive, who can you think of who owns their own business? You have a large social network. Find out what challenges people have in attaining their short and long-term goals.
Step 3:Join the organic marketing bus
Your ability to grow your customers and keep up a consistent business flow as a freelance consultant will be totally up to you. Marketing is the most effective way to achieve this; however, as is customary, organic marketing is the best marketing.
According to Hopkins, Upwork used to have more lucrative contracts and a lower profile. To start her business, Hopkins used Upwork. Hopkins claims that her first client is still her client today and that she has grown primarily without using advertising.
“I greatly like the organic growth my business has seen. I’m not sure if it is customary, but from my experience, I always give it my all. Since I’m highly ethical, and honest, don’t overcharge, and am willing to work within budgets, I receive a lot of organic referrals, she claims.
Business owners might gain from organic marketing in two different ways. The first is that business owners typically have mutual connections and can recommend other companies to you. Like tends to attract like, so chances are if you get along with someone, you’ll get along with one of their friends too.
The second advantage of organic marketing is the lack of costs. Hopkins chuckles, saying, “Because it’s free, I have a bias against how well it works for business.
Step 4: Decide on your pricing
A price must be included in your proposal. When you initially start, deciding how much to charge for your consulting services could be challenging. Fortunately, Hopkins has a rather straightforward formula to follow.
“When I first began putting in extra time, I changed my HR manager’s salary into an hourly rate, and that is not what a consultant should be paid. I now charge twice as much per hour because of the expansion, she asserts.
As an independent, you are taking on more risk and should be paid more than an in-house choice; thus, Hopkins advocates proving your value to clients to advance past that starting converted hourly rate.
She says that I produced a cost/benefit analysis for each of my [current] clients to show them how much money they would have spent working with a traditional recruiter or another independent consultant. “I told them the new hourly rate would be this and my charges would increase by 25%. “Done, fine,” every one of them said in response. Just for them, I ran the figures. Even though I have only pitched clients at the new pricing, nobody has yet told me that I am overpriced.
I’m probably still charging too little, but I like working with new companies and small enterprises, and I can generally come to an agreement. Because I am aware that many recruiters and consultants won’t, I want to help them if they have a clear objective and vision if they will uphold ethics, and if they will treat the new hires well.
Step 5: Maintain organization and complete tasks
After establishing your consulting business, you must maintain organization and produce results if you want to receive repeat business and referrals. Maintaining organization is essential to prevent losing crucial information, missing deadlines, or forgetting to request payment from clients. Start by looking for areas where certain chores can be automated. You might be able to start accepting payments via electronic transfer rather than check or convert to an online bookkeeping program like QuickBooks. To manage your clients, you can use software like Infusionsoft. Consider using a virtual assistant if all else fails.
The success of your consulting business depends on your ability to provide results, even though it can be a little more challenging to advise clients on. To ensure you generate outcomes that support your clients’ corporate goals, keep up with market changes and periodically check in with your clients. Your consulting business will have a decent chance of succeeding if you successfully assist your clients in achieving their objectives.
Regardless of how big or little, expensive or affordable, locally based or only online, or brick and mortar your consulting firm will be, you must have the knowledge, resources, and confidence to help other business owners get back on track. Controlling workflow and expectations drives everything else.