Solving problems for other people isn’t always rewarding. In fact, unsolicited advice can be downright annoying! But what if you could offer advice to other people or companies and get paid for it? That’s exactly what a consulting business does.
If you’re the type of person who loves to solve problems and help others succeed, starting a consulting business might be the ideal business plan for you.
Starting any business can be challenging, but our consulting business guide has all the information you need to get started.
What is a consulting business?
When businesses need to solve a problem, they want to reach out to experts in the field. A consulting business provides this type of expertise, and companies can leverage the consulting business’s expertise on a short-term basis and solve their problems.
Consulting businesses help other businesses make more sales, become more efficient in some areas, or solve other problems. Consulting businesses bring their expertise and experience to the table, and ultimately add value to the company they’re working for.
What does a consulting business do?
Business consultants bring their expertise and a unique outside perspective to any problems a company has. This allows companies to hire experts to solve problems without adding directly to their payroll. Instead of hiring a group of high-cost long-term employees, companies can hire consulting businesses to provide solutions to their problems.
Once the company solves the problem, the company can continue implementing the advice the consulting business provided without the cost of the added payroll that hiring more employees would bring. These solutions can increase revenue by improving sales, creating more efficient processes, or providing any number of solutions depending on the problem the company was facing to begin with.
Different niches in consulting business
If starting a consulting business sounds like something you’d be interested in, you may not be sure where to start. Here are a few of the most common types of business consulting companies.
Environment, Social, Governance, and Sustainability Consulting
Office Design and Efficiency
Despite our best efforts to ignore it, the design of our workplaces affects the efficiency of employees. Companies who recognize this may want to hire consultants to design entire buildings or rearrange existing space to maximize workplace efficiency.
The world is becoming more aware of the environmental and social impacts of corporations, and many companies are working to create more sustainable ethical business practices. Companies may want to hire a business consultant to help them fast-track their movement into this space.
Diversity, Equity, and Inclusion Consulting
More companies are recognizing the value of multiple viewpoints, cultures, and perspectives within their company. And even though they may see the value of more perspectives, they may need to hire a consultant to help them bring their vision to life.
Brand Consulting
Increased advertising from all corners of the internet are making companies recognize the value of having a recognizable brand. Companies hire consultants to help them refine and solidify their brand identity to help grow their sales.
Business Growth Strategizing
Whether a business is just beginning or is decades old, companies may need help envisioning and strategizing their future growth. This is where a business growth strategy consultant can come in and guide companies to a more profitable future.
Marketing Consulting
Growth is the goal of nearly every marketing business, and a marketing consultant can help make that happen. Marketing consultants can tweak an existing marketing plan or create a plan from the ground up.
Financial Consulting
Financial consultants help businesses manage their cash flow, find investment opportunities, help raise funds, and provide other financial advice to businesses of all sizes.
Management Consulting
This type of consultant can help managers and CEOs learn to build more effective teams, select leaders, and handle other employee challenges.
Remember, you should have deep knowledge and expertise in an area before you begin your consulting business. These aren’t the only business consulting niches, so don’t feel limited by this list. If a company has a problem that you can solve with your area of expertise, there may be a market for your consulting business.
Competitors in each type of consulting business
Before you get started in any type of business, you need to do market research to find out who your competitors are. This helps you learn if there’s a market for your ideal consulting business and begin to discover how you can differentiate your business from your competitors. After all, if another consulting company has already been in business for years, why should a potential client choose you over a more experienced competitor?
Here are a few competitors in the niches listed above.
Environment, Social, Governance, and Sustainability – FTI Consulting
Office design and efficiency – Herman Miller
Diversity, Equity, and Inclusion Consulting – Collective
Brand Consulting – Creative Brand Consulting
Business Growth Strategizing – Ma Foi
Marketing Consulting – Redpoint Marketing Consultants
Financial Consulting – Vistance Capital Advisory
Management Consulting – ghSMART
If looking at this list makes you feel intimidated, don’t! There’s room for the unique perspective your business consulting practice brings to the table.
Guide to starting a consulting business
Think business consulting is right for you? Here are the first steps to get your consulting business started.
Choose your niche
This is the most important part of starting your business. You can always change or refine your niche later, but you need to make sure you have expertise and experience in your planned niche before you begin.
Know your target market
Who are your ideal customers? Are they small, medium, or large companies? What type of work do they do? Are they located in your city, or are you willing to travel? Can you offer your services remotely? Narrowing down your target market helps you refine your niche and make sure you’re targeting customers that might use your services.
Analyze marketing needs
Photo by Scott Graham on Unsplash
Next, you need to find your prospective customer’s pain points. What are the problems they’re facing? How can you help them solve them? You can lean on your network to help answer some of these questions by asking friends and acquaintances in your niche what problems they want to solve.
Create your consulting business
Next, you’ll need to decide on your business structure and your business name. You may need to register with the Secretary of State in your state. If you will operate as an LLC or a corporation, you’ll need to file that paperwork as well.
Build a website
Your website is one of the most important parts of your business, especially when you’re starting out. You’ll use it to sell your services to prospective customers. Once you get up and running, you can add content like blogs and case studies to help you win prospective customers.
Build your offer and set your rates
Next, you’ll need to decide how to offer your services. Do you want to create a package that customers can buy for a flat rate? Do you want to bill hourly for your services? What types of projects are you willing to take on? These are questions you should answer before you start reaching out to potential clients.
Market your business
You won’t get any business if companies don’t know you exist, so marketing is the next step. Marketing your business can look like a lot of different things. You can start reaching out to existing contacts you have and let them know about your new business. Spread the word on LinkedIn and any other platforms you use for your business, and don’t be afraid to share helpful tips with the world through blog posts or other methods.
Deliver results
The last step is following through with the promises you’ve made. Show up, do the work, and add value to your customers by solving their problems and resolving their pain points!
Tools you need to start a consulting business
Like any business, you need tools to help you work more effectively and save time. Here are a few of the tools you may want to add to your arsenal as you begin your consulting business.
Project management software
As a business consultant, you’ll need to communicate with both your client and your own team members to make sure plans are made and implemented effectively. Emails can get lost, and it’s easy to miss steps in a large project. Project management software like Trello can help manage the chaos and ensure everyone is on the same page.
Conferencing software
When meetings need to happen between people at different locations, video conferencing software is a must-have. Software like Zoom makes sure you can collaborate in real-time without worrying about time limits or travel costs.
Email marketing
Your email list is one of your most valuable resources, which makes email marketing one of the most important ways to grow your business. Use a service like Mailchimp to help you automate your emails and maximize your email open rates.
Recruiting software
You don’t need to worry about this if you plan to be a one-man (or woman) show. But if you hope to scale your business or bring on talent to support you, recruiting software is a must-have. Rather than sifting through hundreds of resumes (or worse, not getting any applicants at all!), recruiting software like Workable allows you to get the word out about your open position and supports you in finding the right person for the job.
Social media management
Social media isn’t for every business, but if you rely on it for marketing, it needs to be managed well. If you can’t hire a marketer to manage it for you, social media management software like Hootsuite is the next best thing.
How to grow your consulting business?
Once your business consulting practice is up and running, the next question is how to grow it. You may want to grow your business to increase your profit, work fewer hours, or even to sell it to someone else. Whatever your motivations for growing your business, here are a few ways you can take the next steps.
Hire employees
If you’re operating as an individual, it might be time to branch out and hire employees. They could be support employees who handle scheduling, marketing, finances, billing, or some other aspect of your business. It also might be time to bring on additional consulting talent, either to support you in your role or to handle smaller projects while you tackle larger ones.
Create a productized service
Business consulting can be very hands-on. You’re creating a specific solution to specific problems, which can be time-consuming. You only have so much time in the week, so you’re limited in what you can do. But if you can simplify your services, or part of your services, by creating a course, selling an ebook, or using some other repeatable method that doesn’t require ongoing input from you.
Increase your rates
Is it time for a rate increase? Your experience in your field is growing, and you have a proven track record of adding value to your clients. You can probably work more efficiently, and you’ve developed tools to make your clients even more successful. If all this is true, it may be time to increase your rates to match the value you add to the companies you work for.
You can learn more about how your business is performing by measuring your Key Performance Indicators (KPIs). These indicators show you where your company is especially successful and can help you decide which service(s) or clients should have a rate increase. [Please include a sentence or two about understanding your firm’s Key Performance Indicators (KPIs) to know when to raise rates on which services and clients because we will have a separate article on how to identify and calculate KPIs.]
Refine your ideal customer
The ideal customer you created when you started your business may have worked well, but now that your business is growing it may be time to look at your ideal customer again. You may want to target larger companies and their larger problems, since they may require more work and be willing to pay a larger bill.
Network and ask for referrals
A happy client is one of your best resources for referrals, so don’t be afraid to ask for them. While it may feel awkward if your client is pleased with your services they’ll be more than willing to pass the word along to others who may also benefit from your services.
Next Steps
Starting a consulting business can feel like a big jump, especially if it’s your first time creating a business of your own. Success starts with an idea and a plan. Once you have those, you can dive into your dream consulting business.
This consulting business guide is jam-packed with information, but you may still have questions. We’re here to answer them! What would you like to know more about? Reach out in the comment section and let us know how we can help.