Are you about starting a consulting business from home? If YES, here is a complete checklist for starting a consulting business from scratch with little money and no experience.
Okay, so we have provided you an in-depth sample consulting business plan template. We also took it further by analyzing and drafting a sample consulting service marketing plan backed up by actionable guerrilla marketing ideas for consulting firms. In this article, we will be considering all the requirements for starting a consulting business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Consulting Industry Overview
- Market Research and Feasibility
- Consulting Business Plan
- Consulting Firm Marketing Plan
- Consulting Firm Name ideas
- Cost of Starting a Consulting Firm
- Consulting Business Licenses and Permits
- Consulting Firm Marketing ideas
There are times when you may not know much about a field; and what you may consider resorting to do, might be to consult an expert. When we talk about consulting services, we are perhaps talking about getting practical advice from expects. These experts have become so vast that they render their services for a fee.
The consulting industry is indeed a broad industry that covers a wide range of services such as ;management consulting, strategy consulting technological consulting, marketing consulting, human resource consulting, training consulting, tax consulting, and any other business activities that involves giving advice et al.
In essence, consulting firms are hired to proffer solutions to the challenges that organizations face. All over the globe, organizations don’t just hire consultants for the sake of hiring consultants, but they do so simply because they expect them to help tackle their business challenges and deliver solutions as required.
As a consulting firm, if you are good at developing coaching skills, process analysis, technology implementation, strategy development, or operational improvement services, then with just a little push, you will have more jobs than you can handle.
Why Start a Consulting Firm?
The consulting industry is a high-paying industry especially if you have been able to cut your teeth in a particular area of specialization. In cutting your teeth in a niche, you will be required to be vast in it. This means that you may have to give yourself to learning a skill in that area, sit for some certification exams in that field, amongst other special activities that you have got to carry out.
Overall, being a consultant gives you the opportunity to work with high and low profile clients and if you are able to proffer solutions to business challenges you will be greatly rewarded. In most cases, if you are lucky to be among the few experts in the industry, you will have the privilege of choosing who to work for and the amount you want to charge.
What Does It Take to Start a Consulting Business?
Generally, consultants are skilled at conducting research and of course analyzing the results they have got from the research. Consultants go as far as gathering many related data that will help them come up with workable solutions for the organization they are working for; they ensure that they identify behavioral patterns, production bottle – necks, the market trends and of course customers preference.
With that and other factors, they will be able to create standard operating processes that can help the organization achieve its goals and objectives.
As a consulting firm, your core responsibility is to improve your client’s business by effecting changes in response to your analysis; you should be able to change the fortune of the business within an agreed time – line. Corporations are willing to pay expensive fees as long as they are going to get results.
No business person will be willing to pay you for a consulting service if you don’t have a track record that shows that you know what you are doing. It is one thing to convince a client to patronize your consulting services and it another thing for you to deliver solutions as agreed.
Lastly, one good thing about the consulting industry is that there are readily available market for their services simply because organizations naturally would want to improve their performance annually; corporations always seem to want more success. So, if you are well positioned and you know how to deliver results, you will always smile to the bank.
Starting a Consulting Business from Home – A Complete Guide
- Consulting Industry Overview
From a recently released statistics, the United States market for management consulting grew 8.5% last year; it translates to about $39.3 billion. Management consulting is growing at a steady rate and the growth rate of the industry far exceeds previous years’ growth.
Although, the consulting industry struggled during the 2001–2003 period, but of course it is evident that the industry grew steadily after then except for the period (2009) when we experienced economic downturn. Of course the industry is stable and enjoying steady growth. The United States companies are spending much less on strategy consulting but the sector is expected to grow just 3.7 percent in the coming year.
- Interesting Statistics About the Consulting Industry
The consulting industry will continue to blossom because more and more organizations are beginning to realize that somehow they would need the services of consulting firms to help them grow their business, it could be training their employees, creating standing operating process, and it could be designing a new product or re – branding the organization et al.
From all available statistics, it is safer to say the consulting industry is growing steadily despite the competitive nature of the industry. One thing is certain if you are good in your area of specialization as consultant; you can be called upon from any part of the world to come proffer solutions for a corporation.
For instance; if your consulting firm is based in the United States of America and you are able to design a solution for a lingering problem in a particular industry, you can travel round the globe helping organizations solve the particular challenges.
In the United States, a large chunk of MBA students surveyed prefer to work for a consulting firm; it is easier to grow through the corporate ladder and become one of the respected people in your industry, if you work in the consulting industry and perhaps with a reputable international consulting firm. These are some of the reasons why people try as much as lies within their powers to build a career in the consulting industry.
Another reason why people prefer to start a consulting business is that, consultants has the monopoly to charge a fee as it suits them – especially if they are regarded as some of the best brains in the industry. The truth is that larger corporations are willing to travel to any part of the world to source for a consultant that can help them create business solutions. In most cases, they are willing to break the bank as long as they are going to get what they are looking for.
Other factors could be that the business is easy to set up and the start – capital is indeed affordable; you can actually start your consulting business from the comfort of your house. All you need to do is to create an office somewhere in your house. People usually pay you for the solutions you can bring to the table not where your office is located.
Starting a Consulting Business from Home – Market Research and Feasibility Studies
- Demographics and Psychographics
If you are mapping out strategies for your consulting business, it is important to categorically define the demography you intend offering your services to. When it comes to consulting business, the kind of services you offer will determine the groups of people or industry that you are expected to market your services to.
For example; if you are consultant cardiologist, you are expected to source for business within the health sector, so also if you are a technology consultant, you are expected to source for business within the IT world, or any other industry that may need your services.
- List of Niche ideas Within the Consulting Industry
There are diverse areas that you may consider specializing in. You may even choose to be vast in more than one area. Here are some of the areas that you may look to specializing in. These are some of the area of specialization in the consulting industry;
- Management Consulting
- Strategy Consulting
- Technological Consulting
- Marketing and Sales Consulting
- Human Resource and Capital Development Consulting
- Training Consulting
- Brand Consulting
- Accounting and Financial Services Consulting
- Tax Consulting
- Insurance Consulting
- Health Consulting
- Security Consulting
- Relationship Consulting (Marriage counseling et al)
- Nutrition Consulting
- T Consulting
The level of competition in the Consulting Industry
The level of competition in the consulting industry depends on the location of the business and of course the niche of your consulting business. If you can successfully create a niche for your consulting firm, you are likely going to experience little or no competition.
However, over and above, there are several consulting firms scattered all around the United States. If you choose to start your own consulting firm in the United States, you will definitely meet a stiffer competition; there are larger consulting firms that determine the trends in the industry and you will compete with them for clients.
- List Of Well – Known Brands in the Consulting Industry
Just like any other industry that you can find around the world, there are bigger brands that have been around for years, and that are doing pretty well. Whilst some have been around your decades, yet other may have even been in existence for centuries. These are some of the top global consulting firms;
- McKinsey & Company
- Greater New York City Area Management Consulting
- The Boston Consulting Group, Inc.
- Greater Boston Area Management Consulting
- Bain & Company
- Greater Boston Area Management Consulting
- Booz & Company
- Washington DC Metro Area Management Consulting
- Deloitte Consulting LLP
- Greater New York City Area Financial Services
- Monitor Group
- PricewaterhouseCoopers LLP
- Greater New York City Area Accounting
- Mercer LLC
- Greater New York City Area Human Resources
- Ernst & Young LLP
- Oliver Wyman
- Hewitt Associates
- Greater New York City Area Management Consulting
- Greater Chicago Area Management Consulting
- IBM Global Business Services
- KPMG LLP
If you are looking for a business that requires less stress and perhaps minimal start – up capital to start, you can consider starting a consulting business. The cost of running a consulting firm when compared to the turnover you get can be poles apart (this is applicable when you have been able to establish your feet in the industry).
No doubt before you will be able to establish your feet in the consulting industry, you would have spent loads of cash acquiring education; trainings and certifications et al. which is why organizations ensures that they screen the qualifications of consultants before awarding them contracts.
- Starting a Consulting Firm from Scratch Vs Buying a Consulting Franchise
When it comes to starting a business of this nature, it will pay you to start from the scratch as against buying a franchise. Why is this so, you just might wonder? Well, first and foremost, because you can win any consulting job, your profile will be scrutinized even if you are operating the franchise of a successful consulting brand. In essence the brand name of a consulting firm is as important as the qualifications and expertise of the person who is going to carry out the job.
Please note that most of the big and successful consulting firms around started from the scratch and they were able to build a solid business brand. It takes dedications, hard work and determination to achieve business success and of course you can build your own consulting brand to become a successful brand in your area of specialization.
- Possible Threats and Challenges you Will Face When Starting a Consulting Business
There isn’t any business whatsoever that isn’t faced with threats and challenges. The ideal thing however to take note of, is the fact that your ability to manage the challenges and threats that you are being faced with go a long way. As such, if you decide to start a consulting business today, one of the major challenges you are going to face is the presence of well – established consulting firms who are offering same services that you intend offering.
The only way to avoid this challenge is to create your own market; concentrate on start – ups who can’t afford the high end fees charge by big consulting firms. Another challenge that you are likely going to face is economic downturn; if the economy is in bad shape, history has it that the consulting industry usually struggles to maintain their old clients or even win new clients.
Writing a Business Plan for your Consulting Firm
As a consultant, nothing but the best will be expected from you when it comes to writing a business plan. The truth is that, if you can successfully pen down your business concept and the strategies you intend working with to achieve your business aims, goals and objectives, then you would successfully create your business blue – print.
It is not only when you want to set up a conglomerate or multi – million dollars corporations that you are required to write a business plan; ideally if you call what you want to do business, then you would need a business plan to work with.
A Business plan is the blue print of your business; it is a business document that can aid you to successfully set up a business and also administer / manage the business. It is not enough to just write a business plan for the sake of writing one, your business plan should be able to pass reality check; you must put relevant facts, figures and statistics into consideration when writing your business plan.
The truth is that, the main aim of writing a business plan is not just for the sake of having a business document in place; but to have a detail guide on how to effectively set – up, run and manage your business. Your business plan should outline and cover strategies on how you intend to operate your consulting business.
When writing your business plan, ensure that you are moderate when it comes to setting projections on income generation et al. It is better to be on the safer side which is why when you are calculating your future income. These are some key factors that you should also consider when drafting your business plan;
- Executive summary and Company’s descriptions: you are expected to write about the concept of your business, descriptions of your company, your company’s vision statement, and mission statement, where your company will be located, the problem you intend solving and perhaps why people should patronize your services.
- Other key components that should not be missing in your consulting business plan are your service offering, SWOT analysis, marketing and sales analysis / strategies, pricing, costing and financial projection, management techniques, expansion strategies, publicity and advertising strategy, budget and start – up capital generation et al.
If you asked those who have followed the things they have penned down in their business models, why it is needful to have a business plan, chances are that they will tell you it helps them to chart a course for the business. Hence, you have got to draw up a plan for you too.
Choosing a Location for your Consulting Firm
The fact that you can operate your consulting firm from your home does not mean that a location has little influence on the success of a consulting firm. If you have taken your time to study the consulting industry, you will realize that consulting firms are willing to pay expensive rents in order to stay in a busy business district; a place where business activities is at its peak.
So, if you are looking for a location for your consulting firm, ensure that it is a place that is located in the hub of business in your city, a place that is visible and easily accessible. Of course you would not want to locate this type of business in the outskirt of town. Your clients should be able to drive down and locate your office with little or no difficulty.
Starting a Consulting Business from Home – Technical & Manpower Details
On the average, there is no special technology or equipment needed to run this type of business except for customized software et al. In the bid of working out solutions for your clients, you might be required to design a customized software.
When it comes to choosing between renting and leasing an office space, the size of the consulting firm you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard consulting firm, then you should consider the option of leasing a facility for your office; when you lease, you will be able to work with long – term planning.
Regarding the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Consultants and Associates (Different areas of specializations as it applies to your business), Business Development Executive / marketing Executive, Customer Service Officer or Front Desk Officer, and Accountant.
Over and above, you would need a minimum of 10 key employees to effectively run a medium scale consulting firm. Please not that there will be times when you are expected to go out of your way to hire experts to help you handle some jobs. If you are just starting out you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you.
Starting a Consulting Business from Home – The Marketing Plan
- Marketing ideas and strategies for a Consulting Business
As a consultant, you would have to prove your worth over and over again before you can be awarded any consulting contract. So, if you have plans to start your own consulting firm, it will pay you to build your career in the consulting industry. As a consultant it is easier to get consulting contracts via referrals as against going out there to market your services.
People and organizations will pay you for what they perceive and know you can do as against what you told them you can do without any proof; you should come into the market with a good track record. Results that can speak for you.
So when you are drafting your marketing ideas and strategies for your consulting firm, make sure that you create a compelling personal and company’s profile. Aside from you qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past and the kind of problems you want to solve for organizations.
Please note that you will be called upon to defend your proposal, so you must be pretty good with presentations. Here are some of the platforms you can utilize to market your consulting services;
- Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations and businesses in the United States ( if you are just starting out, you may want to concentrate on start – ups and smaller businesses)
- Promptness in bidding for consulting contracts
- Advertise your business in relevant business magazines, radio stations and TV stations (make yourself available for talk shows and interactive sessions on TV and Radios)
- List our business on yellow pages
- Attend expos, seminars, and business fairs et al
- Create different packages for different category of clients in order to work with their budgets
- Leverage on the internet to promote our business (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
- Join local chambers of commerce around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing
- Once in a while, offer pro – bono services as a way of giving back to the society and giving organizations the opportunity to know about your service offerings
Possible Competitive Strategies for Winning your Competitors in the Consulting Industry
The consulting industry is a competitive industry, and you must come up with a unique strategy to be able to outsmart your competitors in the industry. Part of what you need in order to stay competitive in the industry is to continue to create easier and cheaper ways of tackling challenges in the industry you service. Organizations and people will always run to you if they know that you have a better option.
Another strategy that you can adopt is to ensure that your organization is well positioned; key members of your team are qualified and certified consultants.
- Possible Ways to Increase Customer Retention for your Consulting Business
When it comes to business, no matter the industry that you choose to pitch your tent at, one of the easiest ways to increase customers’ retention and perhaps to attract new customers is to satisfy your customers always. If your customers are satisfied with your service delivery, they can hardly source for alternative service provider or products.
Statistics has it that one of the major reasons why client’s source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service. If you can continue to improve on the quality or your products (services) and your customer service delivery, then you won’t struggle to maintain loyal customers.
Part of what you need to do to achieve this is to track the progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system you can easily stay in touch with your clients (you can carry out quick survey, you can introduce new products and prices to them without any hitch, you can facilitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all you can easily receive compliant and feedback from them).
- Strategies to Boost Your Consulting Brand Awareness and Create a Corporate Identity
If you are in business and you are deliberate about boosting your brand and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secret of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity.
If you intentions of starting a consulting firm is to grow the business beyond the city where you operate from, then you must be ready to spend money on promotion and advertisement of your brand. In promoting your brand and corporate identity, you should leverage on print and electronic media.
As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and wide reaching. Another strategy is to sponsor relevant TV and radio programs, advertise your business in magazines and newspapers.
Tips for Running a Consulting Business Successfully
No matter the kind of business you run, your ability to get all the members of your team on same page at all times is one of the keys you need to successfully run the organization. As the chief executive officer or president of the consulting firm, it is you responsibility to give direction to the business.
Part of what you need to do is to ensure that you create time for office meetings; a time where challenges, feed backs, projections and relevant issues as discussed. The meetings could be once in a week or once in a month.
Carrying out appraisals on a regular basis and training your employees will help you run your organization effectively. Encourage your employees to pursue certifications in their various areas of specializations; it will help your organization’s profile and of course it will help the individuals.
You can choose to sponsor some of the certifications. Also, you should keep your doors open for suggestions from members of your team and be willing to reward excellent performance as at when due.
Over and above, the consulting business industry is such a profitable one, as if you know your onions; you will be able to become a millionaire overnight. However, it is not ideal that you have your eyes only on the profit you plan to make without having your eyes on how to give your clients the best of services.
This is where constant research and analysis of the industry come to play. When you spend time doing this, you will find that you will improve and soon enough you will attract all and sundry to your business.