Do you want to know exactly how much it cost to start a consulting business? If YES, here is a detailed cost analysis for starting a consulting firm and raising finance.
Having provided you with a:
- Consulting Industry Overview
- Market Research and Feasibility
- Consulting Business Plan
- Consulting Firm Marketing Plan
- Consulting Firm Name ideas
- Consulting Business Licenses and Permits
- Consulting Firm Marketing ideas
We will consider how much it cost to start a consulting business from scratch including the operating costs.
How Much Does It Cost to Start a Consulting Business?
Starting a consulting firm can be cost effective; this is so because on the average, you are not expected to acquire expensive machines and equipment.
Basically what you should be concerned about is the amount needed to secure a standard office facility in a good and busy business district, the amount needed to furniture and equip the office, the amount needed to pay bills, promote the business and obtain the appropriate business license and certifications. When it comes to starting a small scale consulting firm, the following expenditure should guide you;
- The Total Fee for incorporating the Business: $750.
- The budget for Liability insurance, permits and license: $2,500
- The Amount needed to acquire a suitable Office facility in a business district 6 months (Re – Construction of the facility inclusive): $40,000.
- The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al): $2,000
- The Cost of Launching your official Website: $600
- Budget for paying at least two employees for 3 months and utility bills : $10,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al): $2,500
- Miscellaneous: $1,000
Going by the report from the research and feasibility studies, you will need about $60,000 to set up a small scale consulting firm in the United States of America. You will need over a hundred thousand U.S. dollars to successfully set – up a medium scale consulting firm.
If you are considering starting a large scale consulting firm with several professionals under your payroll and offices in key cities in the United States of America and other parts of the world, then you should look towards budgeting from 1 million United States dollars and above.
Financing Your Consulting Business
Starting a consulting firm can be cost effective especially if you choose to run the business from your home, share an office space with a friend or make use of virtual office. Securing a standard office if part of what will consume a large chunk of your start – up capital, but if you choose to start the business on a small scale, you may not have the need to go source for fund to finance the business.
No doubt when it comes to financing a business, one of the first thing and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for start – up capital for your consulting firm:
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank / banks
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.