Start a consulting business

Start a consulting business

Companies want consultants for a host of reasons.  Maybe there's a problem nobody inside the organisation knows how to fix.  Maybe they're so pushed for resource they need some temporary help from outside.  Or maybe they just need a new perspective on a situation. 

As companies downsize their workforces, the market for project based consulting services is growing rapidly, and that makes for a attractive proposition for people with a skill who want to start a business.

If you’ve got a skill that’s in demand, it’s an easy business to enter. No one will stop you from calling yourself a consultant and getting started can cost as little as printing some business cards.  Just remember, to build a lasting business you have to deliver true value to your clients.

On the flip side of the coin, consulting is fiercely competitive. Clients have instant access to legions of experts at the click of a mouse, and they have found low-cost, offshore alternatives for many consulting projects.

Despite this, there’s a wealth of opportunity for smaller firms and individual consultants who know how to capture their share of profitable business.

Where do you start?

As a new consultant, you can probably generate a project - or maybe several - through your networks of friends, past employers, and colleagues. Research shows clients use their networks to select consultants more than any other method, and they, no doubt, know someone who knows you.

Unfortunately, your address book alone won’t sustain your consulting business long term. If your goal is to build a sustainable consulting practice, the real question isn’t how to get your first client, but how to create a business that will attract the second, third, and fourth clients.

Before you ask your contacts - or anyone else - to hire you as a consultant for that first project, ensure your success by taking a longer view of your business. Work hard to land that first client, but also put the marketing and consulting fundamentals in place that will secure your future as a consultant.

  • Here’s four simple actions to get you started:
  • Have an elevator pitch - know exactly what to say in one minute or less to prove you’re the best consultant a client can find
  • Have a marketing strategy with clear actions
  • Become a master of the consulting process, not just a subject-matter expert
  • Win with value and results, not price

Have something to say…

Prospective clients rarely look for consultants until they have a pressing need. In other words, there’s a problem that needs fixing (and often it needs fixing fast).

A recent client admitted his team had been trying to resolve a complex problem for three years before they hired consultants. They then gave them just four weeks to come up with a solution. They did.

The point is, when most clients are in the market for help, they want it yesterday. And they want the best consultants they can find, at an affordable price. This is what makes it so important you take the time to define what makes you the best consultant a client can find.

Many consultants mistakenly believe by defining their expertise broadly, they’ll appeal to a wider audience and land more clients. The less specific you are, the less likely it is clients will think of you when they need help. The tighter the niche you can define as your own, the more work you’ll win and the more you can charge for your consulting services.

Be very clear why clients should turn to you for their most important projects.  Be prepared to answer these questions during your first conversation with them:

  • What, exactly, are you offering? Is it strategy development, financial management, operations improvement, sales and marketing advice, technology development, change management assistance, or something else?
  • Why is it needed? What specific business problem or opportunity will your services address?
  • How will the client be better off after having worked with you?
  • What’s really different about your firm, its services, results or approach?
  • What quantifiable benefits and results can your client expect?

If you can’t articulate the answers in a minute or less, keep working at it. You’ve probably only got one chance to make a great first impression on a client, so make it count.

…and someone to say it to

There’s no shortage of prospective clients, but truly profitable projects can be few and far between. If you want to work for the most profitable clients, you’ll have to compete for and grab their attention. And for that you need a marketing plan. A real one.

Without a real marketing plan, there’s a big danger you’ll drift from project to project, getting by on meagre profit margins. The real skill in consulting is to leave the low-profit projects for others and focus on attracting and keeping the clients that give the best opportunity for financial and professional growth.

You begin the marketing planning process by creating a one-page marketing plan laying out how to get and hold onto profitable clients. There’s no need for reams of fancy charts, detailed analyses and bullet-proof competitive intelligence. You can draft your first marketing plan by answering these seven questions:

  • What do you want your marketing plan to achieve?
  • What problems can you solve for your clients?
  • What benefits do your clients realise from your services?
  • Who has these problems?
  • How can they be identified?
  • What marketing tactics or tools will you use?
  • What budget do you have available?

As you create your marketing plan, remember you’re building a platform from which to consistently communicate your ideas to prospective clients. It’s the fastest way to launch a new practice because prospective clients equate the success of a firm with consistent visibility.

Over time, keep your business networks healthy with constant attention:

  • Build your LinkedIn profile and network
  • Have a credible web site and blog
  • Speak for industry and trade groups
  • Participate in studies and surveys
  • Publish articles
  • Make contributions to your targeted industry association and local business community

Most importantly, once you begin your marketing program, never stop. You’ll reap the benefits for the long haul if you stick to your marketing guns.

Always deliver what you say you’ll deliver

Perhaps the most serious challenge facing consultants is client scepticism.

A recent study highlighted only 35% of clients are satisfied with the work done by their consultants. Part of the problem is that many consultants are deep subject-matter experts, but less familiar with the consulting process.

Before you get too far into the business, get a firm grasp of the fundamentals of consulting, including how to:

  • Qualify each project to determine your ability to win the work and earn a profit. These two don’t always go hand-in-hand
  • Scope projects so you and the client know precisely what work will be done and the anticipated results. Your profit can evaporate if you have an ambiguous statement of the project scope
  • Find the pricing strategy that’s fair to clients and protects your bottom line. Pricing services is as much an art as a science. It’s usually helpful to look at the financial benefits the client will receive from your work as a basis for project pricing
  • Prepare proposals for people who can buy. Make sure you’re talking to the decision-maker and that the project has funding
  • Deliver perfect work and communicate effectively with your client throughout the engagement

Do those five things well and you’ll have more client work than you can handle.

If you’re new to consulting, interview consultants on how they handle these aspects of the business; read books, articles and reports by leading thinkers in the field; and consider joining one of the many professional associations for consultants. You can save years of learning things the hard way.

Deliver value through your network

Your clearest path to a new client is your network of former employers and others who can make introductions to get that first project kicked off.

Never, ever forget consulting begins and ends with results. To succeed, you must offer and deliver undisputed value to your clients and everyone else in your network.

Value is also the foundation on which you must build your marketing. Your network of colleagues won’t support you, or your business, if your value is questioned anywhere along the way.

Can we help you?

If you're thinking abut starting a consulting business, maybe we can help you.  Give us a call on +357 99 860 725 or contact us.