Why Do You Want to Be a Business Consultant?
So you’re thinking about taking the leap to start your own consulting business. Before you put in your notice, there is a lot to consider. As a former consultant (and a current coach for consultants), I’ve seen too many rush into this without gaining the clarity needed to do so effectively.
Start by asking the big questions: Why do you want to get into this industry? Is it to help people? Is it for the money? Is it to gain a better work-life balance?
It’s important that you define your “why.” Why? Because it will serve to get you to your destination sooner rather than later.
I’ve built a successful coaching practice by seeking first to help. I look to help executives become better leaders, leaders to build better teams, and teams to build better companies. I adhere to Bob Burg’s second law of stratospheric success: “Your income is determined by how many people you serve and how well you serve them.”
So if you’re not getting in this to help people, or you’re just getting into it for the money, I may not be the one to help you. However, if you want to focus first on helping your clients, and you understand that building your consulting business is a marathon, not a sprint, and you’re ready to put in the work to provide stellar services to your future clients, then keep reading.
Running a business isn’t easy. 20% of new businesses do not make it past two years of being open. To succeed, you’ll need consistency over time—doing the same right things over and over. Ask yourself:
- Why do I want to be a consultant?
- What will be the results and outcome for my clients?
- How long am I willing to work on developing my consulting business?
- What specifically does success look like?
If you know the answers to these questions—or are willing to do the hard work of finding them—then you’re on the right track to becoming a business consultant.
Should I Start a Consulting Business on the Side?
The leap can be scary, but it doesn’t have to be an all-or-nothing approach. Many people keep their day job while trying to launch their own consulting business. However, there are pros and cons to becoming an independent business consultant while still working your day job. Consider things like:
- Noncompete clauses: Many companies require you not to engage in similar work for outside organizations while being employed. Depending on the contract you signed, this can bar you from working with their clients or in the local region for up to a year. You could face legal action if these stipulations are not followed. Don’t waste time and effort working on your business until you’ve checked your company contract first.
- Work/life balance: Burnout is a very real phenomenon and can prevent you from making any beneficial progress towards starting your consulting business. Doing quality work for two companies is difficult to manage. And finding time to decompress from that? Even harder. Give your new business the best chance of succeeding by taking care of yourself.
- Gaining experience: The most important requirement for starting a consulting business is having years of applicable, industry-specific experience. If you don’t feel comfortable making decisions that will affect the trajectory of a client’s company, do not go off on your own. Take time to work with a variety of clients under the shelter of a firm and absorb all the information you can to carry with you in the future.
- The motive for changing jobs: Are you truly passionate about consulting and interested in being your own boss, or are you just unhappy in your current company? The desire to be a consultant should be driven by your passion for creating unique solutions to help people succeed.
- Entrepreneurial risk: Starting a business takes money, time, and more time (and probably more money). Working for a consulting firm prior to beginning your own consulting business not only provides you with the necessary experience, but also gives you the chance to ensure you enjoy the work.
- The need to build momentum: There is no way around it—multitasking is difficult, and usually results in less than stellar work. As Ron Swanson from Parks & Recreation puts it, “Never half-ass two things. Whole-ass one thing.” Attempting to drive steady business to your new company can be hard when spending 40 hours a week (or more) working for someone else. Think about the costs before you try to have it both ways.
How to Know When You’re Ready to Make the Leap
You have a dream of running your own firm, even if it’s a firm of one. But how can you know if you have the skills to make it? One of the easiest ways is to start by finding just one client and seeing if what you provide them brings value. If it does, then you have what it takes to go to the next phase. If not, you may need to rethink it, or continue gaining experience.
Business Consultant Qualifications
In order to provide clients with worthwhile results (and then obtain their referrals), a business consultant must possess expertise certain skills, including:
- Objectivity: An unbiased outsider’s perspective allows consultants to give an accurate measurement of how things are going and what isn’t working.
- Leadership: Consultants are often brought on as the resident expert in a certain field. However, that expertise won’t get them very far if they don’t know how to motivate and guide teams to success.
- Decisiveness: Consultants need to make time-sensitive decisions that benefit the company as a whole.
- Ability to work with a team: Whereas coaching is usually one-on-one, consultants will most likely be delegating solutions to multiple team members.
- Strong communication: Maintaining a clear, responsive line of communication is important in making your client feel heard and building trust.
- Industry-specific knowledge: Experience is critical when beginning a consulting business. In order to assess issues and implement change, real-world accomplishments (and lessons learned from real-life failures) in your industry are required.
- Problem-solving abilities: The entire reason for hiring a consultant is to solve problems. The ability to see things from multiple angles and a can-do attitude are not only beneficial, but necessary.
- Analysis: The detail-oriented examination of a business’s processes is the first step to creating useful solutions.
- Organization: If your consulting business is successful, you will have multiple clients with a variety of different needs; proper organization increases efficiency.
- Record of goal-setting and completion: The success of your job depends on the success of your clients. Being able to set and meet goals ensures you know the steps it takes to get there.
6 Steps for Setting Up Your Own Consulting Business
1. Determine Your Focus
What problem are you trying to solve? Where are you the most competent? Identifying your strengths will help to illuminate what kinds and sizes of businesses could benefit from your expertise.
Define Your Services
After you determine your focus, you can now start defining your offerings and services. Make sure not to reverse these steps. Too many people start by trying to figure out what they can sell, and then try to figure out their strengths later. No business consultant worth their salt is going to make it very far if they’re trying to sell before they solve.
Once it’s the right time, make sure to get specific about what you offer. You’re running a business, after all. Do you offer sessions? Workshops? Facilitation? Are you on call 24/7 or have set working hours? How long do your clients commit to working with you: as needed, a quarter, six months, a year? Nailing down these specifics is integral to building the framework of your business.
Strengthen Your Resume
Some people can get started based on their resume alone—where they worked, what position they had for how long, what clients they served. Others may want to consider licensing and certification, though some sort of real-world experience is essential.
Like I mentioned earlier, if you haven’t done the work successfully, then don’t be a consultant. Experience is the most important thing and the only way to provide quality services to your paying clients.
2. Determine Your Target Customer
Create a profile of your ideal target customer that fits with what specific types of services you offer. Consider factors like:
- Geographic location: You may feel like the world is your oyster when you’re starting your business, but your client base is likely a lot more specific in terms of location.
- Socioeconomic status: Are your services affordable? Luxurious? Figure out how much your ideal client has to spend, and make sure you’re worth the investment.
- Demographic factors: Considering demographics can be a fun exercise, but don’t let it lead to stereotyping. Let demographics expand your view, not narrow it.
- Motivations: Why do people want to work with you? What causes them to reach out?
- Challenges: What problems are your customers trying to solve?
- Activities: Work isn’t everything. What else do your customers spend time doing?
- Community involvement: How do your target customers interact with their community? Are there any opportunities for you to better your community together?
- Media consumption: Where do your target customers get their news? Who do they rely on for advice? What influences them?
- Buying state: Is your target customer learning, exploring, comparing, or ready to purchase?
3. Make Connections
Create referrals and seek introductions—you never know when a business is in need of fresh eyes and novel ideas. Start with your existing network; let them know what services you’re offering.
Utilize LinkedIn and other relevant social media channels. Attend events like chamber meetings to reach out to more local clientele. Even if they aren’t in need of your services at the point of contact, they will remember you taking the time to introduce yourself and may reach out at a later date.
Give It Away
It is important to turn each meeting into an opportunity to help your potential client. No one likes dealing with a gatekeeper. When you are generous with your knowledge from the get-go, people will feel more trusting of your process and be aware of the value you are providing.
Building trust with your customer is hugely important in consulting. Starting off on the right foot from the beginning ensures you’re building both a positive relationship with your client and a solid reputation for yourself.
Be Intentional with Clients
Client experience is just as important as the actual work you are providing. With your first client, act like you’ve been there before—rehearse, rehearse, rehearse. Maintain a high level of professionalism through diligent communication and make contact before, during, and after your engagement.
Ask clients for a referral and/or review to gain valuable and applicable feedback, making them understand that you care about providing the best service possible.
4. Stay Relevant
Engaging with your audience on a regular basis keeps them aware of your services. Offering multiple ways for people to connect with you means they are more likely to reach out when they are in need of services that boost their business practices.
Write a weekly blog post, send out helpful emails worth reading, and use social media that is appropriate for your business (make sure to keep it separate from your personal account). Don’t forget to follow up with sales leads, too.
5. Set Up Your Business
Set up an LLC
The creation of a formal company is important. It minimizes your personal legal liability and is an affordable way to protect your personal assets. Check with an attorney and accountant on the best way to do this.
Figure Out Your Finances
Creating a clear, organized plan for dealing with finances prior to accepting clients is essential. Determine the cost of your services and how you will charge, whether with an upfront fee or hourly billing. Make a breakdown of your business budget for expenses, including project management and communication software, the fee for your website, and any advertising.
Set up a business bank account that allows you to easily keep track of billing and accounting. Creating monthly and annual financial goals is a good way to stay on track and measure your progress.
Establish an Online Presence
While referrals will help you gain more clients once you’ve become a credible business, make your service information easily accessible to those searching for specialized consultants.
Secure a searchable domain for your website, full of service descriptions and, of course, a contact form and/or way to schedule appointments. Create a (free) Google Business Profile, which will make you visible to patrons in your local area. Don’t forget social media: profiles on LinkedIn and Facebook are great ways to reach different demographics.
Create a Dedicated Workspace
Unless you are going to lease or purchase an external office space to do your work, you will need to set up a comfortable, productivity-boosting work from home area. While Zoom meetings are acceptable, some local clients may prefer meeting in person, and a quiet coffee shop is always a good place to make connections.
Invest in a Brand Identity
The thought of creating a worthy brand identity may be overwhelming, but it doesn’t have to be. You don’t need to come out of the gate with a Nike swoosh or a McDonald’s arch. Start by thinking about who you are, what sets you apart from your competition, and how to represent that online, in person, and in print.
A memorable business name or eye-catching logo that becomes synonymous with your style and personality can help you stand out from less experienced entrepreneurs.
6. Don’t Go It Alone
Connecting with an experienced consultant, coach, or mentor who has built a successful practice is a surefire way to mitigate some of the stress of stepping out independently. As a coach who has provided guidance to numerous business consultants, I’d be happy to help you understand where you are, where you want to go, and how to get there.
Get Started with Consulting Training
Ready to start your own consulting business but still in need of guidance to help you succeed? I offer seven one-hour sessions of one-on-one coaching for consultants, covering everything from finding your focus to identifying your ideal client to creating appropriate fees to building a website that increases your leads. Send me a message to get started on creating your consulting business today.