BUSINESS

Ready to Consult? How to Start a

Consulting Business in 6 Steps
By Eghosa Kester Igbinigie June 6, 2023 Reading Time: 13 minutes

 

Are you an expert in your field and you know that being a consultant is part
of your purpose in life, then learn how to start a consulting business in 6 easy
steps.
The consultancy business is an opportunity where individuals demonstrate their
expertise, attain professional independence, and make valuable contributions to
the success of other companies.

With the rising demand for consulting services, along with technological
advancements and evolving work dynamics, aspiring consultants find themselves in
a favorable environment.

Nevertheless, venturing into this field demands thoughtful contemplation,

meticulous planning, and a comprehensive understanding of the various
components involved in establishing a successful consulting practice.

And in this article. we shall be looking at those various components involved in

building a thriving consultant practice before we focus on how to start a consulting
business.

Masterclass: How to Start a Consulting Busines…

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Table of Contents
What is Business Consulting
Types of Consultants
Most Profitable Consulting Business
How much do Business Consultants make?
How to Start a Consulting Business
1. Identify and Develop your area of Expertise
2. Determining Your Target Market for Your Consulting Business
3. Write a business plan
4. Choose your Consulting Business Model
5. Register Your Consulting Business
6. Promote and Market your Consulting Business
How much does it Cost to Start a Consulting Business?
Do you need any certifications to be a consultant?

What is Business Consulting

Consulting is a process where experts offer their invaluable advice, opinions, and
strategies in exchange for a fee.
Consultants are no ordinary professionals. They possess a wealth of knowledge and
expertise in their chosen fields, making them an important asset to those seeking
solutions to complex challenges. The demand for their services is driven by the
recognition that their insights hold immense value, value so significant that
individuals and organizations are willing to pay for their expertise.

Consulting goes beyond just giving advice to clients. It also involves in identifying
problems ﴾especially unnoticed problems﴿, data collection, and development
strategies.

At the heart of it all, the primary objective of consultants is to elevate the success
of their clients.

However, this endeavor comes with a price—consulting requires relentless effort

and unwavering dedication. Yet, it is precisely this demanding nature that renders
the consulting business remarkably lucrative.

Types of Consultants
When people hear the word “consultants,” they often think of business consultants.
However, there are actually many different types of consultants. Such as;

1. Business Consulting
2. Management Consulting
3. Strategy Consulting
4. Operations Consulting
5. Financial Consulting
6. Financial Strategy Consulting
7. Human Resources Consulting
8. IT Consulting
9. Sales Consulting
10. Marketing Consulting
11. Environmental Consulting
12. Career Consulting
13. Healthcare Consulting
14. Diversity, Equity, and Inclusion Consulting
15. Public Relations Consulting
16. Brand Consulting
17. Legal Consulting
18. Risk Management Consulting
19. Supply Chain Consulting
20. Cybersecurity Consulting
21. Technology Consulting
22. Sustainability Consulting
23. Change Management Consulting
24. Data Analytics Consulting
25. Project Management Consulting
26. Quality Assurance Consulting
27. Education Consulting
28. Nonprofit Consulting
29. Government Consulting
30. Hospitality Consulting
31. Real Estate Consulting
32. Design Consulting
33. Cultural Consulting
34. International Business Consulting
35. Retail Consulting
36. Energy Consulting

Most Profitable Consulting Business

Among all the consulting businesses out there, there are a few that are more
profitable than the others, below is the list of the Top 5 most profitable consulting
businesses with their average annual income;

S/N Job Title Annual Salary

1 Technology Applications Consultant $167,001

2 Workforce Management Consultant $144,191

3 Principal Sales Consultant $142,048

4 Business Solutions Consultant $138,224

5 Business Analytics Consultant $137,986

Source ZipRecruiter

The list above is by no chance saying other types of consultant doesn’t earn a
substantial amount of income.

How much do Business Consultants make?

According to ZipRecruiter, a business consultant earns an average of $40 per hour,
which amounts to $83,130 per year. With such a high average income, we can
conclude that the consulting business is one of the highest‐earning professions.

How to Start a Consulting Business

1. Identify and Develop your area of Expertise
The core qualities of successful consultants include sharing expertise, offering
valuable resources, and providing sound advice. However, before embarking on
your consulting journey, it is crucial to define and refine your area of expertise.

In today’s business landscape, organizations prefer specialized consultants over

generalists who claim proficiency in multiple areas. They seek experts who can
address specific challenges with precision and effectiveness.

Fortunately, this presents an opportunity for you. You no longer need to be a

master of all trades for every client.

As an independent consultant, you have the free will to choose the type of work
you undertake, whether you prefer working from a physical office or exclusively
online, and the size and scope of your consulting business.

Once you have identified your specialization, the path ahead becomes smoother in
choosing your business name and the perfect business model for your consulting
business.

The advantage of focusing on a specific field is that

you can concentrate solely on honing your skills and knowledge, positioning
yourself as an invaluable resource for clients seeking solutions to their unique
challenges.

By so doing, you will be able to establish a track record of success in your specific
field of expertise, which will help you gain favor among clients.

Because clients are more likely to trust and depend on consultants with a proven
track record in their particular domain.

To develop and enhance your expertise, dedicate time and effort to continuous
learning. Stay updated on the latest industry trends, participate in relevant
conferences and workshops, and seize networking opportunities.

The deeper you delve into your chosen field, the more you will establish yourself as
a trusted authority in your niche.

2. Determining Your Target Market for Your Consulting

Business
Identifying the audience your consulting business will cater to is a pivotal step in its
establishment. Sadly, this question is often overlooked by many individuals
embarking on the consulting journey. Resulting in them encountering difficulties in
securing consulting projects from clients and in determining the appropriate
pricing for their services.

Therefore, it is crucial to dedicate ample attention to this crucial step and ensure its
accurate execution.

By so doing, you can set a solid foundation for your consulting business, paving
the way for success over competitors.

3. Write a business plan

A business plan serves as a roadmap, providing direction and clarity to business
operations while assisting in making informed decisions that align with set
objectives.

When it comes to a consulting business, the business plan need not be excessively
lengthy but it should be precise. Below are what must be pinpointed in a
consulting business plan.
Executive Summary:
The executive summary serves as an overview of your business plan, highlighting
the key points and goals of your consulting business.

It should provide a compelling snapshot that entices readers to delve further into
your plan.

Company Overview:
This section delves into the foundational aspects of your consulting business. It
outlines the nature of your business, including its legal structure, mission
statement, and the services or solutions you offer to clients. Additionally, it should
clearly define the unique value proposition that sets your business apart from
competitors.

Industry Analysis:
Conducting a comprehensive analysis of the industry in which your consulting
business operates is crucial. This section should outline the current state of the
industry, key trends, and market projections. Understanding the industry landscape
will help you identify opportunities, anticipate challenges, and position your
business strategically.

Customer Analysis:
It is paramount to know who your target audience are. In this section, identify and
describe your ideal customer segments. Outline their needs, preferences, and pain
points. This analysis will guide your marketing and sales efforts, ensuring you
effectively reach and engage your target clientele.

Competitive Analysis:
Because the consulting business is competitive, you must have a deep
understanding of your competitors to thrive in this industry. Conduct a thorough
analysis of your main competitors, including their strengths, weaknesses, and
market positioning. This information will enable you to develop effective strategies
that differentiate your consulting business and capitalize on market gaps.

Marketing Plan:
The marketing plan outlines your strategies for attracting and acquiring clients.
Define your marketing objectives, identify your target market, and describe the
channels and tactics you will employ to reach your audience. Detail your pricing
strategy, promotional activities, and the methods you will use to measure the
effectiveness of your marketing efforts.

Operations Plan:
The operations plan provides an overview of how your consulting business will
function on a day‐to‐day basis. It covers aspects such as the location of your
business, facilities, technology requirements, and any partnerships or key suppliers.
Additionally, outline the processes and systems you will implement to ensure
efficient service delivery.

Management Team:
Highlighting the expertise and qualifications of your management team is crucial
for instilling confidence in potential investors and stakeholders. Provide an
overview of each team member’s background, skills, and relevant experience.
Emphasize how their collective strengths will contribute to the success of your
consulting business.

Financial Plan:
The financial plan is a crucial section that demonstrates the financial viability of
your consulting business. It should include projections of revenue, expenses, and
profitability over a specific period. Additionally, detail your funding requirements,
capital structure, and any other financial considerations. This information will aid in
assessing the feasibility and sustainability of your business model.

By following these guidelines and including the aforementioned sections in your

business plan, you will have a comprehensive document that aligns your consulting
business goals with a well‐defined strategy for success. And remember to always
review and update your business plan periodically to adapt to evolving market
conditions and seize emerging opportunities.

4. Choose your Consulting Business Model

When establishing a consulting business, it’s crucial to determine the most suitable
model for your aspirations. Here are four different consulting business models to
model for your aspirations. Here are four different consulting business models to
consider:

The Solo Consultant Model:

In this model, you, as the sole consultant, work closely with clients, personally
handling all project tasks.

Apart from the profitability of this model, one notable advantage it has is the work
flexibility the solo consultant enjoys.

However, it is worth noting that the solo consulting model may not be suitable if
your long‐term plans involve selling your business, as your personal involvement
and reputation are intertwined.

And because it is a solo consultant, it also means you can only generate revenue
when you are active.

The Consulting Firm Model:

Under the consulting firm model, your primary responsibility is to manage the
consulting firm, overseeing a team of consultants who handle client projects.

For instance, David Anderson runs a management consulting firm 
specializing in assisting organizations with process 
optimization and efficiency.  
 
David's role revolves around managing the firm's operations and 
providing guidance to his team of consultants.

The consulting firm model offers benefits for those who prefer a less hands‐on
role, aspire to build a business capable of operating independently, and intend to
eventually sell the company someday.

The Productized Consulting Model:

In the productized consulting model, your expertise is transformed into a
standardized “productized service.” This involves developing a series of repeatable
steps that deliver predictable outcomes for clients.

For example, Michael Johnson specializes in providing IT 
consulting services specifically tailored to small businesses.  
 
He has developed a well­defined process with fixed pricing, 
focusing on network security, software implementation, and 
ongoing technical support.

The productized consulting model is an excellent choice if your goals include

building a scalable business, creating a sellable asset, and freeing yourself from
day‐to‐day project work.

However, It is important to note that transforming your consulting expertise into a

repeatable process typically requires considerable time, experience, and a history
of custom projects.

The Hybrid Consulting Model:

The hybrid consulting model combines elements from the previous three models,
enabling you to design a customized approach tailored to your preferences and
clients’ needs.

A notable example of a hybrid consulting business is Smith & 
Associates Consulting, which offers a range of services, 
including management consulting, training programs, and 
customized project engagements.  
 
They leverage a team of consultants while also providing 
personalized attention to clients' unique challenges.

The hybrid model proves particularly advantageous once you have gained
substantial experience in running your consulting business.
Upon reviewing each model, it is essential to select the one that resonates most
with your ambitions and aspirations.

While it is possible to modify your consulting business model as circumstances

evolve, commencing your journey with a clear vision of the type of consulting
business you aim to build is immensely beneficial.

5. Register Your Consulting Business

Before you start operating your consulting business, it is vital to register it officially,
choosing between a sole proprietorship or a limited liability company ﴾LLC﴿
structure.

While there are various business structures available, these two options are highly
recommended for consulting businesses.

Furthermore, conducting thorough research and ensuring compliance with any

additional legal obligations specific to small businesses in your state is of utmost
importance.

If your long‐term vision involves expansion, opting for an LLC during registration
would facilitate a smoother transition. However, it is essential to note that
establishing an LLC entails certain costs.

If your budget does not currently allow for this, you can initially begin as a sole
proprietorship. As your revenues and client base grow, and the need to safeguard
both yourself and your business arises, you can then legally convert your sole
proprietorship into an LLC.

6. Promote and Market your Consulting Business

You will struggle to attract clients if you are not ready to market your consulting
business. Yes, it may require time and resources before you start seeing results, but
the result will surely come as long as you are being honest about how you sell
yourself and your business to the public.
In marketing your consulting business, here is a list of marketing channels that
have proven worthwhile over the years;

a﴿ Search Engine Optimization ﴾SEO﴿: The goal here is to make your website
content rank higher on search engines thereby bringing in leads to your business.

b﴿ Pay‐Per‐Click Advertising ﴾PPC﴿: Leverage platforms like Google Ads,

Facebook Ads, and YouTube Ads to run targeted ad campaigns that reach your
desired audience and drive traffic to your website.

c﴿ Online Business Directories: Ensure your consulting business is listed on

popular online directories such as Google My Business, Yelp, and Yellow Pages.
These platforms enable potential clients to discover your services easily.

d﴿ Engage with Relevant Subreddits and Slack Groups: Join online communities
dedicated to entrepreneurs or your specific industry. Actively participate in
discussions, provide valuable insights, and establish connections to attract
potential clients.

e﴿ Connect with Local Networking Groups: Identify and engage with local
business associations and networking groups relevant to your industry. Attend
meetings and events to build relationships with professionals and potential clients.

f﴿ Industry Networking Events: Actively participate in conferences, seminars,

workshops, and other industry‐specific events. These gatherings provide valuable
opportunities to network with experts and potential clients.

I know marketing tasks might be tedious, which is why it is recommended to get

someone who has knowledge about online and offline marketing to help carry out
the task while you concentrate on delivering your exceptional expertise

Remember, building a successful marketing strategy takes time, consistency, and

adaptability. By implementing these strategies and continuously evaluating their
effectiveness, you can effectively market your consulting business and attract
clients.
How much does it Cost to Start a Consulting
Business?

The cost of starting a consulting business can vary significantly depending on

multiple factors.

Determining an exact amount without specific details about your business can be
difficult. However, it is important to consider the following major expenses when
starting a consulting business;

Office Setup: This encompasses the expenses related to office space ﴾if applicable﴿,
furniture, computers, software, and other necessary equipment.

Also, your chosen business model may also require you to budget for website
development, hosting, and domain registration.

Professional Development: Consider investing in training courses, certifications, or

workshops to enhance your skills and knowledge in your consulting niche. These
programs can contribute to your expertise and credibility, but they may involve
additional expenses.
Marketing and Branding: Allocate a budget for marketing and promoting your
consulting services through your website design, branding materials ﴾e.g., logo,
business cards﴿, online advertising, and networking events.

Legal and Insurance: Consult with a lawyer to ensure legal compliance and protect
your business. Costs may include business registration fees, contracts, and liability
insurance coverage.

Administrative Expenses: Consider recurrent costs such as accounting software,

bookkeeping services, and office supplies. These are necessary for smooth
operations and maintaining proper financial records.

Miscellaneous Expenses: Account for unexpected costs, contingencies, and

additional resources that may arise during the initial stages of your business.

It is essential to create a detailed budget tailored to your specific business needs.

Researching industry benchmarks and seeking advice from professionals in your
field can help provide a more accurate estimate of the total startup cost for your
consulting business.

Do you need any certifications to be a

consultant?
Yes, you need at least a certification to be a consultant. The consulting field
encompasses diverse areas, each with its own requirements for licensing and
certifications.

Depending on the specialization, consultants may need to acquire specific

credentials or professional licenses before offering their services.

While certain areas may not legally mandate licenses, obtaining relevant
certifications can still be advantageous in distinguishing oneself from competitors.

For instance, an individual seeking financial guidance might feel more reassured
hiring a consultant with a Certified Financial Planner ﴾CFP﴿ designation, which
signifies their expertise and commitment to ethical practices.

Similarly, to fitness consulting, a personal trainer that is certified by the National

Academy of Sports Medicine ﴾NASM﴿ can easily earn a higher level of trust from
clients compared to someone without such accreditation.

Key Resources:

How to Start a Business with No Money

How to Start a Business Online
How to Start a Small Business
The Ultimate Guide: How to Start a Business in 11 Simple Steps

Conclusion

I believe you now have the knowledge on “How to Start a Consulting Business”,
with this knowledge launch your consulting business and be the best in your
industry.

If you have any questions or contributions, please leave them in the comment
section below.
 Remember to turn on the Bell Notification so you can get notified directly on
your device when new business‐related articles are published.

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