How to start a consulting business

You’ve put in the hard work to become an expert in your field and spent years establishing a broad base of knowledge. Maybe you’ve even worked for one of the big three. Now might be the time to take control of your future and start your own business.

Working as a consultant is quite different from working as an employee. You get to set your own hours and rates, and you get to pick the projects that you’re most passionate about. However, you’ll need to do much more work when it comes to finding clients and keeping them happy.

If your experience is in business, you can likely skim through this article and use it as a checklist to remind you of key considerations as you get started. If your experience is in tech or the creative industries, this article will help you establish your own business.

1. Planning your consulting business

Creating a consultancy is a two-fold process. You’ll need to create the business and develop specialized skills that you may not have needed as an employee.

Being able to plan and organize effectively are two skills you’ll need to master to become a successful consultant. Organizations may call on you to help organize teams, plan projects, or restructure entire management systems.

If you don’t have much experience with planning and organizing, now is a great time to learn. Project management is one of the central roles of any consultant. Fortunately, it’s a learnable skill, and there are some excellent books available on the subject, like The Art of Project Management from O’Reilly. It’s a bit dated, but most of the advice is universal and timeless.

Another critical skill to master is change management.

Get a grip on change management

The challenge with planning a business and with project management is that there are generally too many variables. Unlike a trip to the grocery store where you can just check off items as you go, running a successful business involves many moving parts that must work together seamlessly.

No matter how much experience you have, the perfect plan will never exist. Something or someone will inevitably disrupt the process. Client expectations will shift. Your business strategy will evolve. The economy will change.

Change management is a distinct career and business field in its own right. It requires further research and understanding, but here’s some planning advice to help you get started.

It’s usually best to take a top-down approach. Start with the big picture, define your desired outcome, and create a flexible framework to achieve your end goal.

Next, start filling in the big-picture details of that framework. This is a slightly zoomed-in view, kind of like the outline of a book. At this point, you only have a rough understanding of the plot and the characters—but the specifics of the story are still unclear.

Then, zoom in further and start to flesh out the details. Focus mostly on the details of the near future, because the further out the plan extends, the more challenging it becomes to develop the plan. Focus on the here and now and keep a rough idea of where you want things to go in the future.

Start brainstorming

If you have any kind of management experience, you’re undoubtedly familiar with brainstorming.

In the corporate world, brainstorming often involves gathering a group of people in a conference room and telling them to come up with ideas. Unfortunately, this can stifle both creativity and productivity.

But brainstorming itself is still a very effective way to get started with planning something. Before you create your first flowchart or diagram, you need something to populate it with. At the beginning of a new project, you’ll naturally have many ideas bouncing around in your mind.

Instead of trying to organize your entire plan at this point, focus on quickly transferring those ideas from your mind to a secure location. If you’re familiar with Getting Things Done by David Allen, you’re probably already aware of the ideas behind brainstorming.

Brainstorming is a concept, not a methodology. There’s no one best way to do it, and everyone will have their own favorite approach.

You could start by writing down one thought on each card of a stack of 3×5 cards. Or you could open up Airtable and start adding items to each line of the table with the intention of turning it into a database. There are thousands of ways to go between those two. The important thing is to use a method that you’re comfortable with and that won’t get in your way.

One technique that works well in both analog and digital forms is mind mapping. You can do it on a whiteboard, on paper, or with special software. Mind mapping is useful because it lends itself to organization as you plan, but it doesn’t get in your way.

Most people would agree that digital solutions are better than analog solutions. They’re easier to store, share, and collaborate on. One of the top digital solutions for mind mapping is Whimsical.

Whimsical is a comprehensive digital whiteboarding solution. It includes tools for flowcharting, wireframing, and, of course, mind mapping. Whimsical is also a good tool for project management because it’s flexible and easy to learn, and it uses a highly intuitive GUI (graphical user interface) to reduce the friction between thinking and planning.

Develop a professional business plan

Now that you’ve done a fair amount of planning for your business, it’s time to formalize your results.

First, move your rough plans and mind maps to something more permanent. A Kanban board, like Trello, is a great way to formalize and solidify projects.

Next, it’s a good idea to create a business plan. People mostly use business plans to get loans and discuss finances. Now, you probably won’t need any funding to start a consultancy. You don’t need any special equipment, inventory, or staff to get started.

But creating at least a simple business plan can give you some peace of mind. No matter what your venture is, it’s always a good idea to set goals. You don’t need to spend hours calculating financial projections and ROI. But it’s a good idea to think about where you’ll be in three months, one year, five years, and so on.

The Small Business Administration has a great guide to writing a business plan that walks you through the process step by step.

Get advice and mentorship

As a consultant, you’re the advisor. But you can still take advice and benefit from the insight, expertise, and experience of others in your field. You need to be at the top of your game.

Take advantage of any help you can get, especially from fellow professionals. Attend networking events, follow thought leaders on social media, and participate in the groups and communities of people doing work similar to yours.

2. Creating a web and social media presence

As a consultant, your name becomes your brand. If your name is distinctive enough, you may be able to use it as your domain name, social media handles, and business name.

If that’s the case, you’re set. But there still may be a few things you need to consider.

Domain names

If your name is John Smith, you’re out of luck grabbing that as a .com domain. If your name is something like Rudolph Leibovitz, you may think you’re in luck. But then there’s the question of whether people can easily spell that.

Here are a couple of pointers to think about before you grab your default name:

1. Keep it short and easy to type. If your name is Rudolph Leibovitz, it probably won’t work as a domain name. Instead, try shortening it to something like rlconsulting.com. If you’re planning to start a firm, consider coming up with a catchy business name. Basically, your domain should be easy to spell, say, and share.
2. Find a .com domain if you can, but there are alternatives. If you’ve ever spent any time trying to grab a .com domain, you know how incredibly difficult it can be. So many of the obvious ones are already taken that the John Smiths of the world are out of luck. Fortunately, a bunch of new domain extensions have become available, for example, .consulting, .tech and .guide.

The best place to get a domain name is from Google Domains. They have the best prices available, a simple interface, and no ads or upsells.

Social media

Once you’ve secured your domain name out of the way, things get a little bit easier. Social media handles are a lot more flexible.

You can add one or two short words to your social media name, and it will still be close enough. Just avoid combinations that resemble letter and number soup, as they can appear suspicious or spammy.

You may want to use your existing profiles for your business. If your profiles are completely focused on what you’ll be consulting on, then you may want to take advantage of the traction you already have. Otherwise, it’s usually a good idea to keep your business and personal lives separate by creating multiple accounts.

Business name

And now for the easiest step of all, naming your actual business. You should almost definitely incorporate your business. It’s a good idea to come up with a business name that has your name in it, plus a little extra. So instead of John Smith, you might want to consider John Smith Consulting Inc.

3. Tending to legal matters

This is not to be taken as legal advice. All the information here is based on internet research and personal knowledge, not legal expertise. This serves as a guideline to keep you on track.

As a consultant, you’ll be working with established corporations. You’ll need a professional presence in place so they’ll know they can trust the person they’re working with.

So, before you get started, consider the following pointers:

1. Incorporation: You may be able to get by with a DBA (doing business as) initially. After all, companies are hiring you for your expertise. But it looks much more professional if you’re operating using a corporate entity. And if the worst should happen and you give advice that causes the company to lose money, a corporate entity will protect your personal assets if the client pursues legal action.
2. Federal ID: You’ll need an Employer Identification Number (EIN) to open a bank account and pay taxes. Also, some businesses will only work with you if you have an EIN.
3. Intellectual property: As a consultant, you likely won’t create much intellectual property beyond maybe blog posts. If you do, be sure to protect it with a trademark, copyright, or patent.
4. Taxes: If you choose to incorporate (which is recommended), you’ll need to file business taxes and personal taxes separately. Make sure to keep your financial interests separate.
5. Insurance: As a consultant, you face some unique risks. Unless you’re in construction, chances are nobody will get injured as a result of your work. But if you’re working with an enterprise-level corporation, they have a lot to lose. It’s possible someone may blame you for a costly error that was no fault of your own. Many companies hire consultants to handle work where there might be an emotional bias. In those cases, you could have people who are already emotionally compromised and may be more willing to lash out. Fortunately, there’s insurance specifically for consultants.
6. Contracts: Always, always, always work under a contract. It’s essential in this industry, where there’s a lot at stake for both you and your clients. Make sure you have airtight contracts in place that protect you and clearly define the boundaries of your professional relationships.

4. Marketing your business

Marketing your business comes in many forms, but one piece of advice that you’ll hear over and over again is: Pick a niche, dig in hard, and establish yourself as a thought leader.

There are plenty of consultants out there. What sets you apart? Choose an overall niche, then drill down into a more specific one.

For example, let’s say you want to help established web companies create a mobile presence. That’s one niche.

But here’s a tighter niche. You could use front-end web technology, like React Native, to create those mobile apps. If you’re working with a company that already uses React, using React Native will significantly streamline the process, reduce the need to hire new mobile development teams, and even let them reuse a lot of their code.

There’s a vast amount of knowledge you need to acquire to be a successful marketer. Fortunately, as a thought leader, all you really need to do is to keep sharing your knowledge.

Share your knowledge

Every aspect of your web presence should illustrate your expertise.

Blogging is likely your best bet. Write insightful and helpful blog posts that showcase your knowledge without giving everything away. You don’t want to overwhelm people, but you kind of do.

Each blog post should provide complete information and not leave readers wanting more. On the other hand, it should only be a small piece of your knowledge that illustrates that there’s so much more for your readers to learn. That way, they’ll realize there’s a lot to know—and you’re clearly the professional who knows it.

Answering questions on Quora and sharing highly relevant industry news through sites like Twitter, Facebook, and LinkedIn will further cement your web presence.

If you keep at it long enough, your name will pop up wherever your future clients will be looking for information. And when they see your name repeatedly and read the excellent information you’re providing, they’ll learn you’re the person to talk to.

Stay at the top of your game

It doesn’t matter how much you know right now; you need to constantly stay ahead of the curve. Your entire business is based on your expertise.

Never stop learning, researching, or trying to improve your methods.

Stay on top of your industry. Follow blogs, newsletters, and even social media accounts.

If you don’t know what’s going on in your industry, how can you possibly know where you stand in it?

Learn more about marketing

Seth Godin is an excellent source of information. He’s a master at understanding how to position yourself at the center of the crowds you want to attract. So far, he’s written 20 bestsellers, and he publishes valuable advice on his daily blog. The best book to get you started is This Is Marketing. Even if you’ll be hiring marketers, it’s a good book to read to help you understand this critical aspect of your business.

5. Leveraging the right software

As a project manager, you’ll need to find the best tools for your business. And since you’ll be working with people, you’ll want to pick well-known tools and/or ones that are easy to learn and use.

It’s fine to use specialized tools to manage projects and keep things organized. Using in-depth, advanced, and very specific tools may help you stay organized, but they could isolate your clients. You’ll need to work with them collaboratively, so keep that in mind when making your choices.

Here are three software solutions with a wide range of capabilities that just about anybody can use:

1. Google Docs, Gmail, and Meet

This cloud-based suite will let you and your team communicate and work together in real time. As your business grows, Google Workspace scales to support businesses of every size—from small startups to massive enterprises.

2. Jotform

The premier tool for automating communication, Jotform’s versatility means you’ll constantly find places in your business processes where it’s the perfect match for you and your clients. And its dominance in the market means that your clients will be more likely to adopt it.

3. Notion

This powerful knowledge management tool provides a collaborative editing environment that gives you smart tables and lets you embed other software into your pages. You can even embed Google’s and Jotform’s tools into your Notion pages, making it a great center for all your business processes.

6. Getting a handle on business processes

Every client will have their own well-established business processes in place. Depending on what kind of consultant you’re going to be, you may need to help them rearrange or restructure those business processes.

Every single job you take on will require a different approach, but a lot of the underlying systems you use in working with those clients will be the same from client to client. For example, when a new lead reaches out to you, you should have a consistent onboarding process that you use with every client. That includes scheduling an initial sales call, signing contracts, and holding an introductory meeting to discuss the client’s needs.

You should hammer down and streamline the processes that you find yourself using consistently in every project. It should be as simple as ticking off items on a checklist. The smoother you can get your processes to run, the less work you’ll have to do. That’s because you can hire other people to do it for you.

Using the previous example, you can hire somebody to make your sales calls and manage contracts. If you have an established system for addressing client communication, an employee or contractor can handle that as well.

The E-Myth by Michael Gerber is an excellent book that will teach you how to work on your business, not just in your business. The 4-Hour Workweek by Tim Ferris is another outstanding resource that offers you strategies to automate and outsource many aspects of your business.

And of course, there are many systems that need to be in place for any business to work. It doesn’t matter if you’re running a giant tech company or you’re a single freelancer. All businesses have similar needs, like managing finances, managing employees and subcontractors, and trying to secure repeat business.

Here are some common business aspects and some tools for managing them:

1. Accounting: This process involves bookkeeping, payroll, and taxes. QuickBooks is still the most popular choice for small businesses and self-employed individuals.
2. Human resources: This area covers hiring, termination, benefits management, and more. You can take care of most of your HR with Jotform. You can use it to receive resumes, fill out legal documents, manage employee lists and information, and much more.
3. Customer service: Keeping your clients happy is arguably the most crucial aspect of your business. This is another area where Jotform is your friend. You can create forms to collect service requests, handle scheduling, receive feedback, and more.
4. Marketing: As discussed earlier, Google Docs can assist with campaign management. Jotform has many marketing templates you can use to collect email addresses, conduct market research, and much more. Buffer simplifies social media marketing by automating posts, while Mailchimp helps you launch professional email campaigns without getting flagged as spam.
5. Quality assurance: It’s vitally important to make sure your service meets the highest standards. Jotform can help you streamline that as well with feedback forms and client satisfaction interviews, while Jotform Workflows can automate your clients’ policies and procedures for decision-making.
6. Storefront: You’re not running an online shop, but you should have an easy, web-based way to collect money from your clients. For most consultants, setting up a store would be complete overkill. But Jotform has an Online Store Builder tool that can create a simple, elegant, and flexible payment gateway for your clients to use.

Wrapping it all up

There’s a lot involved in starting a business, but the most important thing is to start! Don’t overthink it, overplan it, or spend too much time on it. And don’t psych yourself out. Just roll up your sleeves and get to work.

Okay, we did discuss earlier that you’ll have to do a lot of upfront planning, and that’s true. But that’s mostly to get the ideas out of your head and somewhere safe. Once you’ve done that, just get back to work.

This article covered a lot of territory. You can safely bookmark it and forget most of what you’ve read. But keep it in the back of your mind. When you need more information, come back here to get ideas on what your next steps should be.

Whatever success looks like for you, here’s to you taking the first steps and achieving it!

Photo by AlphaTradeZone