How To Start Consulting Business
It seems like everyone is a consultant these days. You might roll your eyes at this, but know that it’s actually a beacon of hope for aspiring entrepreneurs. With the high demand for specialized services, and the relative simplicity of starting an online business, there has never been a better time to start a consultancy.
But what is a consultant exactly? The skills and services vary widely, but essentially, a consultant is someone who is hired to offer expertise that will move a person or business forward in a specific area.
Consultants handle social media, IT, human resources, PR, business strategy, pretty much you name it. I, for example, am a freelance writer by trade, but much of the work I’ve done in the past was as a digital marketing consultant.
Consultants are doing amazing things. For example, the founders of ticketing platform TryBooking had “fairly average results” for 10 years at their first startup until they hired a business consultant who helped them craft a business plan that turned everything around.
And consulting isn’t limited to the business world. When Australian skier Alisa Camplin took home a gold medal at the 2002 Winter Olympics, she called her sports psychology consultant her “secret weapon.”
Sounds awesome, right? But how do you know if you have what it takes to be a successful consultant? Let’s dive into the answers below.
Do I Have Sufficient Skills to Start a Consulting Business? That’s a great question! My simple answer: Have you ever had a job? Then congratulations, you have skills people will pay you for! I don’t mean to make it sound easy; of course, you will have to be able to produce results for your clients. But you might be surprised by just how much you have to offer when you really think about it. There are consultants in business organization, college admissions, personal style, and even confidence.
What clients want from a consultant is proof they’ve got good ideas to execute on and examples of work they’ve done in the past. That’s why portfolios, discovery calls, and proposals are so important; they’re your opportunities to show proof of your expertise and offer recommendations on how you can move your client’s business forward.
In my five years as a marketing consultant, not once has anyone asked about my college education. Not once have they asked to see my certifications. Not once have they asked me how many years I’ve been doing this. Those things are nice to have, but they don’t necessarily make a good consultant.
In short, how can you tell you have what it takes to be a consultant? If you’ve got multiple projects in a field that you’ve worked on and can show them as proof of your expertise, that’s about all it takes. There’s no set number of years of experience, no required degree.
My challenge for you: If you want a true litmus test for seeing if you have enough skills to be a consultant—try to get your first client. If you can convince someone that you will bring them enough value that they are willing to pay you, you’ve validated your business idea. You aren’t stalling and talking in hypotheticals anymore, you’re doing it! Once you get that first client, it becomes much easier to get that second and third, and things will snowball from there.
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Sign up to get on our Free VIP Waitlist to be notified when the course launches! Why Should I Start a Consulting Business? Consulting has very low barriers to entry compared to product-based businesses or service-based businesses that need multiple employees. Here’s a list of some key benefits:
Simple to Structure
A service-based business of one person (you) is the simplest business you can start. In the U.S., it’s known as a sole proprietorship, and it requires no extra paperwork to create. You are the business, basically. And unlike product-based businesses, a consulting business requires no product design, prototyping, manufacturing, or shipping.
Low Costs
Again, unlike product-based businesses, a consulting business doesn’t have many expenses. There’s the business license, and maybe some accounting and project management software. But if you’ve got a computer, Internet, and expertise, you can be a consultant. Eventually, of course, if you decide to scale your business into a consulting firm, you’ll have the payroll expenses of hiring other consultants. But at the start, an independent consultant is a lean startup.
Allows You to Gain Experience for Future Business Ideas Consulting is the perfect way to get hands-on experience solving problems for clients; this can result in your first product, whether digital or physical. A great real-life example of this is serial entrepreneur Jonathan Siegel. He got his start as the founder of a consultancy that built software for other businesses. But then one day he decided to have his team build software during some downtime. What started as an in-house project turned into his first product: RightCart, shopping cart software that was later acquired by Buy.com.
Helps You Make Industry Connections As a consultant, you’ll carve out a specialty as an expert in a certain niche. As you continue to work with clients, you’ll network with key leaders in your industry. Keep in touch with those connections; you never know just where they may take you.
Is Consulting Right for Me? Just because anyone can be a consultant doesn’t mean anyone should. Here are some of the key characteristics of a successful consultant:
You’re Self-Motivated
Without a boss or coworkers, you’ll need to be able to get the work done on your own. This can mean anything from administrative tasks such as invoicing clients to sales tasks such as following up on prospects.
You’re Deeply Knowledgeable in a Particular Area This one seems like a no-brainer, but it’s such a big part of being a consultant, it needs to be stated: You’ve got to be knowledgeable about something others want to know. I hesitate to say “expert” because that word tends to scare people away. While you don’t have to be a world-renowned expert on using Instagram to grow an email list, if you want to be a social media consultant, you’d better have real experience in that field and past results to back it up.
You’ve Got People Skills
Consulting is a service, meaning you’ll be working one-on-one with clients. Because of this, you need to have good people skills. You’ll be marketing yourself, negotiating with clients, and presenting ideas—if that makes you want to run for the hills, consulting may not be for you.
How Do I Choose My Niche?
“Niche” is a hot word right now—and everyone is telling you you need to find yours. But I’m going to give some advice that goes against the grain: Don’t worry about niching down in the beginning. I didn’t.
You see, in the beginning, you’re still testing the waters. You think you know what industry you want to work in and what kind of clients you want to work with, but the truth is, you have no way of knowing until you start.
As digital marketing consultant Josh Hoffman points out, if you niche down too early, you may end up getting boxed in very quickly. For example, if you decide you want to be a Facebook ads consultant for wedding planners because you’ve got tons of online ad experience and you love weddings, but you’ve never actually worked with wedding planners, what’s going to happen on that initial client call? They’re going to ask to see proof of your previous work in their niche, and you may very well lack some specific piece of knowledge or skill you weren’t aware you needed. Then you’ll be stuck without the relevant experience and skills.
But let’s look at it another way. Let’s say you marketed yourself as a Facebook ads consultant who’s worked with a wide variety of businesses—restaurant chains, software startups, and construction companies. When you have a discovery call with a wedding planner, they’ll ask to see your past results, but of course, they’re not going to expect to see previous work only in the niche they’re in—and that’s fine. You didn’t market yourself that way. Now your past work will still be relevant because it shows you know how to produce results with online ads, even if it isn’t in their specific niche.
On top of that, it’s by not niching down that you’ll find your dream niche. In the beginning, it’s okay to cast a wide net in order to learn what you like and narrow down later. Trust me, most people don’t get it right on the first few tries. I started out selling videography services but quickly learned that wasn’t my calling. I then moved into copywriting, and eventually branched out to what I do today: digital marketing for startups.
Low Costs
Again, unlike product-based businesses, a consulting business doesn’t have many expenses. There’s the business license, and maybe some accounting and project management software. But if you’ve got a computer, Internet, and expertise, you can be a consultant. Eventually, of course, if you decide to scale your business into a consulting firm, you’ll have the payroll expenses of hiring other consultants. But at the start, an independent consultant is a lean startup. Allows You to Gain Experience for Future Business Ideas Consulting is the perfect way to get hands-on experience solving problems for clients; this can result in your first product, whether digital or physical. A great real-life example of this is serial entrepreneur Jonathan Siegel. He got his start as the founder of a consultancy that built software for other businesses. But then one day he decided to have his team build software during some downtime. What started as an in-house project turned into his first product: RightCart, shopping cart software that was later acquired by Buy.com.
Helps You Make Industry Connections As a consultant, you’ll carve out a specialty as an expert in a certain niche. As you continue to work with clients, you’ll network with key leaders in your industry. Keep in touch with those connections; you never know just where they may take you.
Is Consulting Right for Me? Just because anyone can be a consultant doesn’t mean anyone should. Here are some of the key characteristics of a successful consultant:
You’re Self-Motivated
Without a boss or coworkers, you’ll need to be able to get the work done on your own. This can mean anything from administrative tasks such as invoicing clients to sales tasks such as following up on prospects. You’re Deeply Knowledgeable in a Particular Area This one seems like a no-brainer, but it’s such a big part of being a consultant, it needs to be stated: You’ve got to be knowledgeable about something others want to know. I hesitate to say “expert” because that word tends to scare people away. While you don’t have to be a world-renowned expert on using Instagram to grow an email list, if you want to be a social media consultant, you’d better have real experience in that field and past results to back it up.
You’ve Got People Skills
Consulting is a service, meaning you’ll be working one-on-one with clients. Because of this, you need to have good people skills. You’ll be marketing yourself, negotiating with clients, and presenting ideas—if that makes you want to run for the hills, consulting may not be for you. How Do I Choose My Niche?
“Niche” is a hot word right now—and everyone is telling you you need to find yours. But I’m going to give some advice that goes against the grain: Don’t worry about niching down in the beginning. I didn’t. You see, in the beginning, you’re still testing the waters. You think you know what industry you want to work in and what kind of clients you want to work with, but the truth is, you have no way of knowing until you start.
As digital marketing consultant Josh Hoffman points out, if you niche down too early, you may end up getting boxed in very quickly. For example, if you decide you want to be a Facebook ads consultant for wedding planners because you’ve got tons of online ad experience and you love weddings, but you’ve never actually worked with wedding planners, what’s going to happen on that initial client call? They’re going to ask to see proof of your previous work in their niche, and you may very well lack some specific piece of knowledge or skill you weren’t aware you needed. Then you’ll be stuck without the relevant experience and skills.
But let’s look at it another way. Let’s say you marketed yourself as a Facebook ads consultant who’s worked with a wide variety of businesses—restaurant chains, software startups, and construction companies. When you have a discovery call with a wedding planner, they’ll ask to see your past results, but of course, they’re not going to expect to see previous work only in the niche they’re in—and that’s fine. You didn’t market yourself that way. Now your past work will still be relevant because it shows you know how to produce results with online ads, even if it isn’t in their specific niche.
On top of that, it’s by not niching down that you’ll find your dream niche. In the beginning, it’s okay to cast a wide net in order to learn what you like and narrow down later. Trust me, most people don’t get it right on the first few tries. I started out selling videography services but quickly learned that wasn’t my calling. I then moved into copywriting, and eventually branched out to what I do today: digital marketing for startups.