Getting Started in Consulting

"Consultants don't sell services by calling potential clients; they get called because their expertise is sought after." Are you ready to start your journey toward a thriving consulting career?

1. Save Money and Strategize Before You Start

Starting a consulting business requires significant preparation, especially in terms of financial and time management. Many consultants fail because they launch their business without adequate resources or a clear plan. The first year of consulting typically brings in limited income, necessitating strong financial reserves.

Planning is vital to ensure success during the initial phase. Consultants should calculate how much they need to cover personal and business expenses for an entire year. This can include savings, home equity, or even loans if necessary. Reducing monthly pre-business expenses also helps ease financial strain in the beginning.

Proper allocation of time is equally important. With a long to-do list, prioritizing tasks ensures efficiency. Tackling tasks in alignment with personal productivity cycles and delegating work when needed can make a substantial difference in staying on track.

Examples

• A consultant set aside funds equivalent to a year's rent and utilities before launching her business, stopping her from financial strain.
• Reducing non-essential expenses, such as dining out, allowed another entrepreneur to stretch their savings further.
• Delegating website creation to a professional saved weeks for a consultant who lacked technical skills.

2. Create an Effective Workspace

Your work environment directly impacts your productivity. A well-equipped and conducive workspace is a necessity for any consulting business. Whether operating from home, a shared workspace, or a formal office, the focus should be on creating an efficient and distraction-free zone.

A home office can be cost-effective, but only if space is available. Shared workspaces can provide professional amenities but require fees and compliance with operating hours. Formal offices enhance productivity but are a steep investment, more viable after establishing a steady income.

Equally important is equipping the space with essential tools like a computer, reliable internet, a two-line phone system, and a copier. The total initial investment for a fully functioning office can range from $1,250 to $2,000, depending on specific needs.

Examples

• A consultant transformed a small room in her home into an office, keeping expenses low while ensuring a quiet work zone.
• Another professional chose a $300-per-month shared workspace, allowing him to network while controlling costs.
• Investing $2,000 in equipment helped an entrepreneur efficiently manage client demands from day one.

3. Understand Tax Requirements and Build Professional Relationships

Taxes can be complex, but choosing the right business structure simplifies financial management. Defining the company as an S corporation minimizes tax obligations since earnings are taxed once as personal income rather than corporate profits.

Writing off legitimate costs as business expenses further reduces the tax burden. For instance, home-office costs and medical fees can often be deducted. Seeking advice from a tax consultant early on saves time and prevents future issues.

Professional relationships with banks and service providers are equally important. Personal connections with bank officers can expedite financial processes or resolve issues quickly. Additionally, building ties with graphic designers, insurance agents, or other professionals strengthens business logistics.

Examples

• Switching to an S corporation saved one consultant thousands of dollars in taxes annually.
• A business owner reduced taxable income by deducting equipment costs.
• Strong rapport with a bank officer helped another consultant easily secure a line of credit.

4. Market Aggressively to Attract Clients

Consultants don't find clients by cold-calling; clients must seek them out. This requires extensive marketing and networking to make your services known. Promotional materials like a professional press kit set the foundation for outreach.

Networking is essential to meet people who can introduce or recommend your expertise to others. Conferences, media events, and industry gatherings offer platforms for direct interaction and referrals. Pro bono work boosts visibility while fostering connections with influential organizations.

Examples

• One consultant landed her first client after distributing a press kit featuring her services and past achievements.
• Networking at an industry event resulted in a partnership with a prominent client.
• Completing a nonprofit project pro bono earned another consultant glowing testimonials.

5. Build a Strong Online and Media Presence

In a competitive market, standing out is key. A professional credibility website showcasing your services and achievements establishes trust. The website should explain your expertise clearly without flashy gimmicks or excessive promotions.

Social media is useful but should be approached cautiously to avoid wasting time. Effective branding also extends to traditional media like print and radio. Publishing articles or appearing in interviews highlights expertise, while giving talks at local forums creates connections.

Examples

• A consultant’s sleek website with testimonials and success stories doubled her client inquiries.
• Publishing an article on a major industry site raised another professional’s visibility significantly.
• Speaking at a local Chamber of Commerce earned one consultant three key referrals.

6. Offer Flexible yet Clear Proposals

When pitching services, include multiple payment and service options. Clients appreciate flexibility, and presenting options can increase earning opportunities. However, standing firm on appropriate pricing ensures fair compensation.

Responsive communication also plays a role in winning contracts. Following up thoughtfully after meetings shows dedication and persistence. If a client delays or rejects a proposal, staying professional opens the door for potential future collaboration.

Examples

• A consultant gained a major client by offering tiered service packages during a proposal meeting.
• Another professional earned a contract after consistently following up via email and phone.
• A declined contract turned into a long-term client when the consultant stayed in touch.

7. Value Expertise Over Hours Worked

Set fees based on value provided rather than hours worked. Clients are paying for your knowledge, not time alone, and pricing accordingly communicates professionalism. Upfront fees also prevent issues related to fluctuating project costs or misunderstandings about hourly rates.

Avoid payment models tied to project success, as outcomes often depend on factors beyond your control. Maintaining positive relationships with clients reinforces trust and encourages recommendations.

Examples

• An upfront fee allowed one consultant to avoid disputes over billing hours.
• Another professional secured higher pay by emphasizing her expertise in the proposal phase.
• Strong client relationships brought consistent referrals to a budding consultant.

8. Assess Success Before Scaling Up

After three years in business, assess your consulting practice's health. Long-term success includes sustaining business through word-of-mouth, retaining most clients, and balancing work with personal time.

Scaling up involves hiring selectively to maintain profits without unnecessary overhead. Choosing clients thoughtfully allows consultants to focus on rewarding projects instead of chasing income alone.

Examples

• A consultant knew her business succeeded when 75% of contracts came from repeat clients.
• Hiring part-time support helped another entrepreneur boost efficiency without overspending.
• Prioritizing enjoyable projects rejuvenated a consultant’s passion for work.

9. Pursue Personal Growth While Growing the Business

Once stabilized, your consulting career can also foster personal satisfaction. Mentoring the next generation of professionals gives back to the community while reinforcing your legacy. Selecting projects aligned with your values enhances fulfillment.

Don’t forget to maintain a work-life balance. Regular vacations and a manageable workload ensure sustained enthusiasm for your practice.

Examples

• Mentoring a budding entrepreneur helped one consultant find renewed purpose in her career.
• Choosing to work with a cause-based organization brought another consultant great satisfaction.
• Scheduled vacation time kept one professional from burning out while running her business.

Takeaways

1. Set aside at least one year's expenses and create a thorough financial plan before starting a consulting business.
2. Maintain a professional online presence and use networking to let clients find you rather than chasing leads.
3. Price services based on your expertise, not hours, and include flexible options that demonstrate value while protecting your interests.