In this post, I’ll help you learn the ins and outs of starting your own profitable consulting business and we’ll go into how to start a consulting business and how you can become a consultant.
- What is involved in setting up a consulting business and becoming a consultant?
- Simple steps that will help you become a consultant
- Why you should consider offering your business consulting for free!
- Things that you should know about running a consulting business.
- How to keep your consulting business sustainable and profitable for years to come.
- 6 Pitfalls of Becoming a Business Consulltant and How to Avoid Them
What is involved in setting up a consulting business and becoming a consultant?
Let’s talk a little about what is involved in setting up a consulting business and how to know what type of consultant you should be.
Become a consultant because Consulting is currently one of the best business models you can follow and it has many rewards including a nice profit margin and plenty of flexibility.
Fact #1: Through consulting, the performance of a business may be substantially improved.
Fact #2: Companies/ small businesses/owners trust the ideas and suggestions of their project team and staff; but most of the time, the expertise needed to achieve growth is limited.
Result: This leads to the hiring of private consultants to help the business achieve its goals. Consulting is a talent. If you have the skills and expertise to help people take their business where they want it to go, then consulting can be a great option with excellent financial returns.
Establishing a consulting business is not always easy, it involves a lot of self-marketing along with a solid reputation and expertise to back it up.
To gain success in consulting, you need to focus on selling one product – YOU!
But, before you begin marketing yourself you should first determine what your consultant potential is. You can do this by asking yourself a few basic questions.
- What is the thing you are most passionate about?
- What is that thing that you do best?
Once you have determined what that is, ask whether there are people who might need some assistance in that area.
Now, can you help them?
Of course, you can! You are an expert on it! So why not do it as a business? Earn money helping others with something you know and do best and that is business consulting.
You can start small. Do it in the comfort of your home as a freelance consultant. There are a lot of organizations and executives out there who are in need of expert consultants and with a little fine-tuning, you can become a high-paid advisor.
So what do you need to do next?
Well, as I have said earlier, you have to determine your area of expertise first.
Ares of Expertise for your consulting business
When you become a consultant find out if you have the required certifications to claim that you are an expert in that field? If you don’t, you must secure that first or have enough social proof that you can help with the problem at hand. An expert or consultant without credentials is just another person next-door, who is ambitious to be an expert. People believe in the written word and social proof, so you have to have that. However, there are also professions or areas of expertise that doesn’t require certificates like fund-raising consultants. Expertise in the likes of this area only needs experience. However, you have to have vast experience in the field you are planning to advise on.
Your office/working space
Since you are starting small, your first office can be your bedroom, or your study room, if you have one. All you need is a table and chair, an internet connection and a telephone line, and presto! You are almost ready to start your consulting business.
Almost, because you have to understand that though you are starting small, of course, you are also looking to become big someday.
So you have to be organised. Consultants are advising on management and that includes time and things management. You have to practice what you are advising.
Set your goals and limitations.
Why limitations? You are only starting your business, so don’t shoot stars. Set your goals to a realisable scale or level. Do not target too many clients and end up failing with your commitments. Be realistic. Do not bite off more than you can chew. Maintain your clientele to a manageable number.
Develop and make a record of your plan.
You need to have a tangible reminder of the path you are taking so you would not go astray. It’s easy to get distracted and side-tracked from your goals. So it’s best to have it formally written down and give it a professional feel. This way, you can also have something to show possible clients, proving that you are serious in your business.
Create your lesson plans.
Of course, before you can advise, train, or teach, you have to have a lesson plan. You have to know what you are going to tell your clients. Write it on your own. Think of all the possible weaknesses people might have in your chosen field. Focus and write about that. If you don’t know how to start it, begin with the definition of your profession and everything else would follow. The field you are going to write about is your forte, so things should flow easily once you have begun.
Simple steps that will help you become a consultant
Offering consultation services is one of the best business models that you can follow and can provide you with both profits and flexibility.
The typical way to start any type of business is to be as informed as possible about the way it functions. This is also true when running a consulting business.
A good place to start is to purchase informative books, video and other manuals to learn everything you can about the business. You can also seek advice from other consultants who had been successful in their fields. Most of all, don’t be shy when it comes to asking for help.
Next, develop a harmonious working relationship with your clients. Building good relationships with the clients is the mantra of all businesses since relationships can go beyond the initial sale and can also forge repeat buys. Clarify clientís expectations versus what you can do.
Specify your expertise and the benefits they can get from having you as their consultant.
More often than not, clients especially those big organizations have high expectations of the consultants. By being realistic of your capabilities, the good relationship can be developed from then on.
Then, make a good proposal with a clear statement of your strategies and objectives. Since you are the consultant, you are expected to solve the majority of the organisationís problems. Clearly state on your proposal the services you will provide and the price you will be asking. Strongly emphasize the advantages that your client will enjoy once they deal with you. You can only do this by presenting the benefits they can reap after getting your services.
Now, create a marketing plan to grab the most profitable clientís attention. You can briefly present your marketing plan; actually, you can devise a seven sentence marketing plan.
- The first sentence explains the purpose of your project.
- Second sentence explains the ways on how to achieve the purpose
and the benefits that the clients can get.
- Third sentence describes the target market.
- Fourth sentence describes the niche.
- Fifth sentence is about the weapons you will utilize.
- Sixth sentence is about your business identity.
- And the seventh is all about the budget.
Present a refined, professional image. Being in the image business, your clients will perceive you as the ultimate maker of sales. One sure way to draw new clients is to be categorized as an expert in the consulting industry.
Project yourself as an expert having marketable skills produced from a combination of education and knowledge you gained from years of experience. Since your skills are rare, many companies will be willing to pay your premium. But they also need to see you as in-demand, successful and one of the top quality consultants of all time. Make sure that you have all the necessary materials such as sample videos and business cards. Convey an image of an expert who have all the knowledge clients can benefit from.
Consider offering a free introductory session when needed.
Often, consultants are conscious of the bills and are hesitant to give their services. Being a consultant does not always mean charging per hour of your precious service. If you are just starting with your business, you must first build clientís awareness about your services so free short consultation will not hurt you. Ensure that your client will be interested on your services by conducting free information seminar once in a while. This can give you exposure and referrals.
Be keen with results. The clearest path to have new clients is a promotion from those who saw your first successful project. Keep your network of contacts and other persons that you know. Always keep in mind that in consulting business, results are the viable tool to acquire clients. To be successful, you must deliver and offer undisputed value to your clients and all other members of your network.
Gather testimonials where you can so you can show social proof of your results. As these can be used to build upon when attracting new prospects.
These are just some simple steps that can be followed when starting a new consulting business. This might not be enough though since a great effort must be exerted when running any chosen business. With all these ingredients, your consulting business will surely give you huge money.
Why you should consider offering your business consulting for free!
I know, I know You must be thinking that I’m crazy, suggesting that you offer your business consulting for free. It is important that you understand the benefits of offering your services for free.
The big question you may be asking yourself is; “How can I make money by providing my consulting services for free?” You may be thinking that will turn your business into a charity, right?
What I’m talking about here is giving out free consultancy as a teaser, a free taste or free sample, so to speak. (Or even doing the first few projects for free so you get to test out your process or methodology. Document what did to get the results and then use the testimonials for paying clients once you know you have something that works). People don’t just buy new products from a stranger without testing the product first. When you are just getting started chances are that you aren’t very well-known, so it will be more difficult to get new clients to invest in you.
Nobody invests in something that is not reliable to generate good results. Unless you are backed by someone very famous and reliable, you are not going to get clients for your business.
By providing free consultancies, you are giving them a taste of what it is like to have you as a consultant. You are not going to hand them everything you have got in a silver platter. No, that’s not what I am saying. It’s just about giving them a free sample-a small sachet of your service. It is a very good way of enticing and luring them to your business. Once you have proven that you can help them and you made them happy with the result of your sample service, they are left with little choice but to hire your services. They wouldn’t be able to deny a good tangible result!
Steps you can take to in your Consulting Business to provide free services
So, what you have to do is advertise on your website that you are offering free business consulting. Nothing lures customer more effectively than the screaming word ‘FREE’. People’s weaknesses always include freebies.
Create a downloadable request for consulting form on your website so that they can send you their contact information and initial details of their consulting needs. This would also give you chance to build your list of possible clients as they would be leaving their companyís contact information and their own contact information as well.
Once you have gained enough names on your list, try to become friends with them. In every business, a good relationship and rapport is the key. So don’t just build mountains of contacts, but build networks of relationships.
Establish a good working relationship with everyone you meet in your free consulting services, and you are sure to get referrals. This way, you are slowly building a network that would work for you and your business.
When you have lots of friends in the business world who believe in your talent, they would surely tap you in every endeavor related to your expertise.
Soon afterwards, you will find yourself speaking at their conferences, seminars or workshops. And that is another opportunity for you to market yourself and your business consulting services. You can do the public speeches for free, too! This way, you are establishing goodwill and gaining their trust. And in a way, they become indebted to you and would doubtlessly return the favor in the future.
Offering free business consulting services and free public speeches are even better and cheaper than advertisements using professional advertising agencies. You can also consider it as a practice in honing your consulting skills. But of course, you still do your own advertising from your own website, publishing newsletters and distributing brochures and leaflets.
Things that you should know about running a consulting business.
Remember, you don’t have to reinvent the wheel. You just have to have the right mindset and the proper information to get on the right track.
According to the Harvard Business School research, about 100 billion dollars are generated by the business consulting industry. This is from the annual revenues gained by consultants solely in the United States. Consultants are really needed by companies in a slow economy to assist them in cutting their costs and increasing their revenues.
As a business consultant, you will be relied on and respected in every industry and in every country. Being a business consultant, you will be admired for both your independence and expertise.
The bottom line of business consulting is to help organisation leverage their business performances to produce viable results. Among the services that can be offered by business consulting are:
Improving productivity as a consultant.
You can assist your clients to work more efficiently or redesign the work processes. You can also institutionalize and design metrics for process enhancements.
Optimizing workload and applications.
You can help clients align applications for business strategy, plan internal resources and prioritize critical work requests.
Ensuring effective outsourcing.
You can also ensure the outsourcing suitability of the organisation’s infrastructure and applications. You can also help them design a governance structure that will lead to better management of relationship issues and busniess change.
You can also choose to specialise in other different areas such as:
- Marketing consulting
- Small business consulting
- Communications consulting
- Organizational development consulting
- IT consulting
- Strategic planning consulting
- HR consulting and any other areas that need professional advice.
With all the expertise gained by a business consultant, it’s no wonder that they are one of the most highly paid professionals. On a survey conducted by the Association of Management Consulting Firms, it was found out that entry-level consultants earn an average annual income of $65,000 or more.
When it comes to being a highly sought after consultant just remember that hard work and perseverance equates the profit and fame that you may acquire from this business. There are also some good rules of thumb that you should always keep in mind:
You and the client should have a good working relationship. Establish a relationship that will go beyond your first sale. Clarify the expectations from your first assignment. Describe the things that you do and identify the benefits a client will achieve. Clients hire you because of your skills and expertise so you should be able to produce a quality work for them.
You are hired as a consultant to help the client’s problem; clearly state your proposal that is beneficial enough for the client, that way the price that you are asking them is worth the pay. From your proposal, let them feel that they really need your expertise. Always emphasize the benefits that they will obtain from your services.
Always present a professional image. The client’s perception of what you are is really important. Always show them that you have the expertise and skills that are highly based on the combination of your education and knowledge from your chosen field. Because of this, client would willingly pay you because your skills will help them improve their firms. Always keep in mind that clients expect to see an in demand and successful business consultant.
You are just establishing a consulting business, so offer free sessions. This will be the chance for you to expose yourself and gain referrals. Always keep in mind that as a starting consultant you need not bill them right away. First, think of ways you can help them, not monetize every hour you talk to them.
You can charge your clients by your hourly rate and not just by the whole job. But it’s a better strategy to have recurring incoming service or package deals based on the type of consulting you are doing. A consultant is being paid for the time that will be used for the project or the impact they make. Make sure that your rate is equivalent to your expertise and experience, type of field and your contracting firm’s size. Also, include in your fees the overhead expenses, the time spent in marketing and other administrative endeavours.
Make an update of your client’s portfolio. It’s not bad to remove clients that generate small income. After all, you are talking about your own business here. You can get referrals from good clients and even fish for some new industries to widen your horizon. But remember; take on the assignments that you think you will enjoy and never forget to follow up for your clients.
These are just a few simple guidelines that will help you establish a successful consulting business. Entering the business consulting arena can be a daunting task, but if you have the needed skills and expertise, you’ll have no problem becoming successful in this field.
Just remember that, business consulting is a win-win situation if you are a good consultant. You can help improve other firms and also improve your consulting business. So start your consulting business and move your way for a higher income.
How to keep your consulting business sustainable and profitable for years to come.
Like every other business endeavour, business consulting has its own risks. There will always be doubts and second thoughts and lots and lots of afterthoughts. Nothing in this life is sure to last forever.
In fact, nothing really will last forever. So if what you want is to have a business that would last forever, you are trying to hit the moon. However, there is always hope, to keep your business afloat and thriving in the jungle world of entrepreneurship for a very long time.
Yes, there is always hope. But you have to work really hard for that hope to materialise. The best thing you can aim at is keeping your business consulting firm sustainable. If you can achieve that, then you can start working on keeping it abreast with other companies in the field.
So how do you keep your consulting business sustainable? You only have a few contacts or connections, so what happens when you have used up your existing resources?
Simple. Create and build new resources. The only way to keep your business going is to have an ample supply of resources. So, here are a few things you could do to keep business going and growing.
Establish your business plan.
The first thing to do is to firmly establish your business plan. You are going to engage in a very serious business so you have to be serious about it.
Your clients should take you as a serious, no-nonsense person that would deliver them good results. So do your homework and be prepared.
Have a comprehensive business kit containing details of your services in a neatly packaged brochure, with hourly rates, project rates, retainer basis rate and whatever package you want to serve your client.
This brochure would be your salesperson in your absence, so make it the best brochure you can ever make. This is the blood of your business, keep it pulsing through your veins.
Second is finding clients. You can find clients through friends referrals but that would not last very long. Even if you have a long list of friends, that is still not enough to last your business a lifetime.
So you have to exert more effort. Try cold calling. It may sound a little to below your level, but hey, this is business! You need to do whatever it takes to get clients and cold calling is not as bad as you may think. You just have to do it right and do it nicely.
You know how irritating it is to be offered things over the phone, so try not to be irritating. Try not to do the things that those telemarketers do to irritate you.
Prepare a nice introductory script before making your first call. Try not to bombard your prospective client with the details of your business consulting. Your goal is to get him interested enough to agree on a meeting with you for further discussion of your services.
It also pays to remember that very person you meet, great or small is a possible connection. So be nice to all people all the time. He may just be a janitor or a food attendant at a restaurant, but for all you know, you may be talking the person who could lead you to your biggest catch ever. So be nice all the time.
6 Pitfalls of Becoming a Business Consulltant and How to Avoid Them
There’s a great deal to learn on your journey to becoming a business consultant. To help you make the learning curve faster, here are the 6 main pitfalls new coaches fall into so you can avoid them.
1 – Not Attracting the Right Clients
The goal of your marketing shouldn’t be to just get more clients. It should be to attract the right kind of clients. Your consulting services aren’t for everyone and you need to focus on those you can help the most.
- What is the type of person who can benefit most from your coaching?
- What are your strengths or areas of expertise?
- What types of clients have you had success with?
If you can focus on a certain type of businessperson who’s the right fit for you, you’ll get more good clients and enjoy better success with them.
2 – Lack of Appropriate Screening
When you first start talking to a potential client, you need to assess whether they will benefit from coaching or not. Some people decide to hire a consultant because they think the consultant will do the work for them. They think you pay the money, and success is assured. In reality, the client themselves need to be ready to face challenges and grow, with the help of a coach.
When talking with a potential client, find out what their expectations are for your coaching/consulting. Explain to them exactly what you will do and what results they can expect to see, emphasizing the roles of each. Make this clear in the beginning to weed out bad-fit clients and set proper expectations.
3 – Not Growing Your Coaching and Consulting Skills
What sells your coaching and keeps clients is the quality of the service you offer. When a client starts seeing results, they’ll want to sign up for more and tell their friends. As a coach, you need to master these vital skills so that you can get these results for your clients.
You also need to continue developing your coaching skills. You need to keep growing and facing challenges just like your clients.
4 – Doing the Work for Your Clients
Many new coaches and consultants make the mistake of doing too much and applying too much pressure. You can easily push your clients too quickly and cause them distress, rather than helping them reach their goals. You can forget that your role is to listen, ask questions, and hold them accountable.
There’s a tricky balance to strike where you’re pushing your clients to leave their comfort zones, but also taking a passive role where they move at the right pace. The last thing you want to do is be too pushy. The best way to prevent this is to keep everything focused on the client and their needs. Listen well and empathize, and you’ll understand where the line is.
5 – Dwelling on the Past
One of the main reasons businesses get stuck is that they dwell on the past. Mistakes and failures are great teachers, but we need to let go and move on. When you’re coaching your clients, you will discuss the past, but you should focus on the future. Your role is to help them break free from the past so they can grow.
6 – Business Coaches Never Stop Learning
Anyone can be a great business coach if they’re ready to learn the essential skills and maintain the right mindset. If you’re willing to put in the work, you can find success with a business consulting service.
If you want to know more about business coaching or grow your coaching business online, then let’s have a conversation as can take you step-by-step through how to help your clients achieve breakthrough success.
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