Business consulting – how to start a consulting business
4-minute read
Do you have a natural talent for business? Do you love solving problems and helping others reach their goals? If yes, you should consider a career in business consulting.
From communication aficionados to market research experts, becoming a business consultant is a natural next step for entrepreneurially-minded people who want an exciting, varied, and flexible job.
Sound interesting? Keep reading to learn how to start a consulting business of your own.
What is business consulting?
Business consultants are professional problem solvers. Business experts who come into a struggling business to offer advice and guidance to those looking to improve their performance.
Business consultants bring an outside perspective to the businesses that need them – as well as a diverse skill set and industry knowledge which can help to identify challenges and develop solutions that may not be obvious to those on the inside.
A business consultant will likely be hired on a project-by-project basis to help solve a specific problem. As a consultant’s career advances, they’ll gain more experience and may even develop a speciality or passion.
What does a business consultant do?
As a freelancer, your business consultant jobs will never be the same. Each business that hires you will have a different problem which needs solving. Your career history will also shape your day-to-day life and the type of work you accept – perhaps you specialise in marketing or in a specific industry such as IT.
No matter where you are in your career, here are just a few of the responsibilities you could enjoy as a freelance business consultant:
- market research
- analysing internal and external data
- technology training
- financial analysis
- project management
- presenting findings and research in clear ways
- developing and implementing business plans
Business consultant project example
A company in need of marketing support reaches out to you because of your previous success in the area. After meeting with them, you learn this business is facing challenges with declining sales and market share. You decide to take on the project because you believe you can help them.
To start with, you’d review their marketing strategies, sales processes, and overall business operations. You might discover that your client’s marketing efforts aren’t targeting the right audience, meaning that their product offerings aren’t meeting customer needs.
Using the data you gather, you’d then offer recommendations of things the business could do to improve. This could be in the form of a continuous improvement plan or training sessions.
Consulting business plan
One of the key skills you’ll need as a business consultant is how to create a clear business plan for your clients. Some things you may include in a business plan include:
- mission and vision statements
- target demographics
- competitors
- industry trends
- financial projections and budgeting tips
- revenue forecasts
- marketing strategy
- distribution strategy
- organisational structuring
To help you get started, you can find out more about how to write a business plan here.
How to set up a consulting business
Alongside proven business expertise, there are other things you’ll need to do to find success as a freelance business consultant. Here are five key things you’ll need to consider:
1. Identify your niche
Identifying a specific area of expertise within the consulting sector can help you to stand out from other business consultants and better attract clients who require a particular set of skills.
2. Build your network
As with any freelance trade, it’s important to leverage your existing professional network to secure your initial clients.
If you don’t have a huge network to start with, you can attend industry events or join online communities to help get your name out there.
3. Officially register your business
You’ll need to decide whether you want to register as a sole trader or a limited company. This will affect your tax rates, how you pay tax, and even what kind of insurance you need. Make sure you research both options and choose which route is best for you.
4. Set your prices
Do thorough research in order to set accurate prices. These will be based on your experience and existing market rates. When you’re first starting out as a business consultant, expect your prices to be lower than when you have more experience and contacts.
You should also make sure that your client contracts outline your prices, the scope of your work, any deliverables, and your payment terms. This will help avoid problems in the future.
5. Manage your finances
While you’ll be helping to improve the businesses of others, it’s also important to take care of your own business needs. Setting up a system for financial management (including invoicing, tracking expenses, and tax records) will help you out in the long run.
Types of business consultants
One of the great things about becoming a business consultant is how you can shape your career to your unique interests and experience. Here are just a few of the types of business consulting you can consider:
- communications consultant: helping businesses manage their external and internal communications, reputation, and addressing any PR concerns
- IT consultant: use your IT skills to help implement new IT systems and identify new technological opportunities
- legal consultant: those with a background in business law can help companies with legal issues or help implement processes that can avoid them
- management consultant: management consultants help advise on a whole range of organisational issues – we have a separate guide on becoming a management consultant here
- research consultant: help companies do market research and compile reports on a range of issues
- marketing consultant: some businesses don’t have their own marketing teams, so you’ll be able to advise on marketing strategy and operations
Consulting business insurance
As with the nature of any advisory role, it’s important to make sure both you and your clients are protected. Building an insurance policy designed for consultants can help.
You should add the necessary insurance options to your cover that matches the work you do. For example, public liability insurance can help you if you accidentally cause injury or property damage when working in your client’s premises.
And professional indemnity insurance is a great choice for business consultants as it covers you if you make a mistake in your work or your client claims for financial loss.
Do you have experience as a business consultant? Share your best tips for getting started in the comments below.
More guides for self-employed management consultants
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Written by
Rosanna Parrish
Rosanna Parrish is a Copywriter at Simply Business, specialising in legal and HR content. Trained at London College of Communication, she has been creating content professionally for eight years at publications across the UK and Spain. Starting her career in health insurance, she also worked in education marketing before returning to the insurance world. Rosanna also writes about wellbeing in the workplace. She lives by the sea and does her best writing in coffee shops.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
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