1. How to Start a Consulting Business
2. Things to Consider Before You Become a Consultant
3. Different Types of Consultants
4. Target Market
5. Why an Organization Wants to Hire You
6. Consultant Benefits
7. Investment
8. Home Office Benefits
9. Employees
10. Income and Billing
11. Marketing Your Consulting Business
12. Facts You Need to Know About Starting Your Own Consulting Business
13. Tips on How to Start a Consulting Business
14. Steps to Take Before You Start a Consulting Business
15. How to Start Consulting on the Side

How to Start a Consulting Business

Learning how to start a consulting business can be tough, but it is a rewarding career where you can give expert advice to another party. American businesses spent over $12 billion in consulting in 1997. More people are interested in the consulting industry, according to Anna flowers of the Association of Professional Consultants of Irvine, California.

Independent consultant Melinda P. of Arlington, Virginia believes technology has made it easier for people to break into the consulting industry. The primary purpose of the consultant is to impart valuable knowledge to the client. There is no simple formula when it comes to consulting success, but passion and determination to excel is paramount. Further, there is no specific requirement to become a consultant, as long as you’re knowledgeable about the field or subject.

Things to Consider Before You Become a Consultant

With that, you may require a certain type of licensure or certification before you can begin consulting. One step is to familiarize yourself with the latest technological trends to stay current in the consulting field. Additionally, organization is key. Moreover, networking is critical as you build a vast network of contacts that could yield potential clients in the future. Finally, establish short and long-term goals to get your business off to a sound start.

Different Types of Consultants

To begin counseling, you must choose a specialty or field:

Accounting: Accounting consultants help a company establish a solid financial base.

Advertising: Companies managers/owners hire advertising consultants to help them craft a solid marketing or advertising campaign.

Auditing: Audit consultants can help companies ranging from small businesses to large telecommunications companies

Business: Business consultants help companies generate profit.

Computer: Computer consultants help clients in the realm of tech and is a very popular area of consulting.

Computer programmer: This area of consulting requires specialty in hardware and software

Business Writing: Business writing consultants help businesses write memos and reports.

Career counseling: Many clients find themselves at the mercy of downsizing and layoffs and need an alternative career path, which is why career counselors are high in demand.

Communications: Communication consultants help employees and/or management communicate with each other on a productive level to foster productivity.

Editorial Services: This type of consultant helps clients produce such documents as corporate annual reports and newsletters.

Executive Search/Headhunters: Consultants in this field help clients find talent for their organizations.

Gardening: Gardening consultants has bloomed into a million dollar per year business. Many people need garden consultants to help them take care of their personal or professional gardens.

Grants: Grant consultants can help clients draft grant proposals.

Human Resources: A popular need in the corporate world, many clients need consultants to help them deal with conflict management in the workplace. Such support could teach workers how to interact with each other while creating a safer workplace environment.

Insurance: Many potential clients need a consultant to help them find the best insurance policies on the market.

Marketing Consultants: This consultant helps businesses establish marketing campaigns for promotion.

Payroll Management: If you have expertise in payroll management, you can help large or small businesses stay organized in the payroll department.

Public Relations: An invaluable service, many businesses and organizations rely on positive press coverage and a good image in front of the public.

Publishing: This is an area where you can help magazines, newspapers or websites break into the publishing world.

Writing Services: You can help clients excel in writing on a personal or business level.

Taxes: You can help clients or businesses with tax burdens or help them find lucrative tax loopholes to help them save money.

Influence: A consultant could be used to exert influence over others on behalf of clients.

Networking: Some businesses hire experts with the best networking connections.

Entertainment: Many studios need consulting within the entertainment industry.

Target Market

When finding a target market, draw up a business and marketing plan. Find a target market where clients need your expert guidance. When researching your target market, imagine yourself as a competitor, and figure out how they became successful in the business.

Why an Organization Wants to Hire You

Organizations hire consultants for advice, expertise, guidance and problem-solving. Consultants with expertise and a positive track record can become very successful. There are times an organization members need an outside perspective to spot underlying issues.

Moreover, consultants could be hired to replace staff members. For instance, a business could save thousands of dollars each week through the hiring of consultants instead of full-time staff members. In addition, employers do not have to pay benefits to consultants. Consultant fees are higher than employee salaries, but the right consultant can help businesses save money and become efficient. Further, consultants can act as a catalyst for change within an organization.

Consultant Benefits

A consultant does not have to conform to corporate culture, allowing them to assess a situation with an unbiased eye. They act as an objective third party and provide a refreshing viewpoint about problems and goals within a business. Consultants can also act as teachers and help employees learn new skills. For this reason, consultants must remain current in their realm of expertise.

With that, consultants may be required to handle tough tasks such as recommending cuts in staff or an entire department. However, the primary goal of a consultant is to enhance an organization with new ideas, regardless of the costs. You would excel in the consulting field if you are good at coming up with new ideas, and your services could fix dysfunctional businesses. A consultant may even be called to create a new business entirely.


Becoming a consultant is not a large investment. Operate your consulting business out of your home to save on costs. However, it is best to check with an attorney to ensure you that you are permitted to operate a consulting company from home.

Home Office Benefits

The benefits of operating a home-based consulting business outweigh the disadvantages:

• Low Overhead: No extra costs in the form of added rent or utility costs from financing a separate facility

• Flexibility: A home-based business gives you more flexibility in managing daily affairs, such as setting your own hours and taking breaks.

• Gas Costs: Avoid heavy traffic and tumultuous commutes.

• Tax Benefits: Your home office may be tax-deductible (check with a tax preparer)


Upon opening your business, determine if you can operate affairs yourself or need outside help. You may need additional help as your business grows and client base expands. You have some options at your disposal when it comes to finding help.

Some companies offer management services, regardless of how large or small your organization may be. Avoid hiring secretarial service companies that offer the cheapest rates because a quality support staff will help you in the long-term. Research the references of a secretarial organizations before accepting services.

Another alternative is to hire someone who will work in your personal office. A personal administrative assistant can benefit you in the following ways:

Time and Money Saved: An assistant can help you with paperwork duties while freeing up your time to cater to client needs or securing more clients.

No Worries: You wouldn’t have to worry about being away from your office. An assistant can also manage your marketing services while you are out with clients or networking.

• Partnership: Managing everything can seem lonely and overwhelming at times.

• Different Perspective: You can benefit from a different perspective as you operate your business.

Income and Billing

You must decide how much to charge to clients before opening your business. Cheap rates mean lower revenue for your business, while excessive rates get you no clients. To find the right balance, research what the competition is charging.

Detail all of your expenses before establishing a fee structure to prevent deductions from eroding your revenue stream. Most clients know additional expenses are an inevitable part of the consulting field. Plan for unforeseen expenses during the consulting process, be sure to add miscellaneous expenses when charging a client. Do not go overboard by excessively charging clients in the miscellaneous category.

Your fee structure can be hourly, retainer-based or project-focused. If choosing an hourly system, be mindful of the following:

  1. A high hourly rate could turn away clients.
  2. You risk not being taken seriously if your hour structure is too low.

Some clients would prefer the hourly system, but others may see it as far too expensive. With a project rate structure, the consultant would get fixed fee for a set amount of time. Most clients prefer a retainer agreement, and consultants could be restricted from working with a client’s competitor in a contract.

Most businesses or clients prefer a monthly fee plan, but the chances of late payments increases with monthly payments.  Additionally, the retainer plan allows you to set up a monthly fee structure that establishes a certain number of hours worked for the client. The retainer options has a number of advantages, most notably a guaranteed income per month, which is crucial for a start-up business.

Further, you can offer a reduction percentage if a client agrees to a monthly retainer plan. However, it is worth noting that a retainer monthly system increases the chances of late payments. A consultant’s average monthly income on the retainer system is $3,500 each month. Regardless of fee structure choice, keep in mind that more money for a service or product means higher return for that client’s money.

Marketing Your Consulting Business

There are many methods you can employee when it comes to marketing and attracting the clients you want. One way is to create a brochure.

Your brochure should convey five notable points:

  • Tell clients why you are the best at what you do
  • Explain why you should be hired
  • Include a brief bio of yourself
  • Mention previous clients

The first step when it comes to accumulating clients is cold-calling, and there are ways to make it work:

  • Draft a prepared script
  • Be creative in your pitch to decision makers
  • Limit cold calling to a few days per month

Limitations in your marketing capacity is correlated to your advertising budget. Advertising your business can be an expensive pursuit. Therefore, recommendations and word-of-mouth advertising are the best types of advertising.

For paid advertising, look into specialized magazines or trade publications. In addition, examine other ads placed by competing consultants, and determine the best course of action for your ad campaign.

Regardless of the ad, include enough information to gain future clients. You can also hire a graphic designer or freelance writer to design your ads. If you design your ad, keep the design simple and avoid expensive, flashy advertisements to save on costs. Content is more important than design.

Public speaking is another route to get more clients, while earning a stellar reputation within your community. Also, an easy marketing tool is asking for referrals current that could lead to paying clients down the road. Impress that client with your skills and expertise before asking for a referral.

Sell Yourself

As a consulting, you are marketing yourself to the public.

In order to sell yourself efficiently, you must:

  • Dress immaculately
  • Have a good reputation
  • Prove your worthiness
  • Turn yourself into a valuable brand
  • Give yourself with a large price tag

However, you are not your own boss in the consulting arena. Your clients are your bosses.

Facts You Need to Know About Starting Your Own Consulting Business

As glamorous as consulting sounds, it comes with drawbacks, and not everyone is suited for it.

  1. Consulting is harder than most people realize
  2. Since consulting is a face-to-face business, you’ll come across people who are hard to deal with. Certain people cannot undertake contentious relationships.
  3. You’ll need to learn how to sift through serious and unserious clients.

If you find yourself struggling to deal with conflict and wish to become a consultant, consider taking a conflict resolution course to enhance your people skills. Regardless of the setbacks, remember that consultants offer knowledge first and foremost. A client hires you because you have knowledge they don’t possess. If a client doesn’t like the knowledge you present, accept it and keep delivering what they asked for.

Dealing with Problem Clients

Be upfront and direct with unhappy or unproductive clientele. Do not let them go, but convey to them multiple times your worth and what you can do for them. Do not fight clients that are not satisfied or are consistently late in paying you.

Struggles of Consulting

As with any business, you will come across personal and professional struggles. Consulting can be an emotionally draining experience. Disappointment and failure are inevitable, but you must press on. The only way to fare through the adversity is to be prepared for it.

Tips on How to Start a Consulting Business

First, the job must be taken seriously. Do the job right, and remember that a consultant is someone between jobs. To combat this perception, upgrade your professional manner with business cards and a website. Social media is also crucial to your business. Further, do not let current or future clients question your abilities. Make no apologies for making your own way.

Set meetings the offices of your clients. Have a consulting contract on hand during meetings. Choose an important, reliable client to become successful. Even if you have a stream of steady clients, remember that late payments come with the territory, and be prepared if it happens. A blank credit line is necessary when large companies are late on payments. A client could take months or weeks to pay you. Acquaint yourself with the billing department, and keep yourself abridged of the company’s payment system.

Remember to over-deliver and under-promise to exceed expectations. Over-delivering is key when it comes to success in this business. Remember, it requires four times as many resources to gain a client than it is to retain existing ones. Always deliver your best work at all times, even during odd hours.

To impress new clients, finish a small task to prove your worth and commitment to a business long-term relationship. Starting with small endeavors gives you additional time to market yourself. Make sure all of your terms and conditions in form of deliverables and schedules are agreed upon in writing and signed.

There are times when a client will ask for more than what you’ve been paid. If this happens, tell them delicately that added work comes with additional fees. Draft a boilerplate proposal, which is a pre-written document summarizing your qualifications and background. This gives a client peace of mind in seeing a formal proposal.

Try to avoid extensive legal contracts. Instead, present an easily digestible commitment letter. You may be faced with a legal contract if dealing with work products or intellectual property, so it would be prudent to sign the contract, try to avoid doing so if you can.

Plan in Advance

Plan at least a year in advance if you wish to become a consultant. Take the time to network and build relationships with competitors, businesses and colleagues.  Networking sites such as LinkedIn are great ways to contact peers and get useful contacts. Remember “if you meet” connect rule. Also, reach past contacts for potential leads in the future.

Steps to Take Before You Start a Consulting Business

Do not try to appease everyone. Delve into a niche market that caters to a specific need. Adjust your services accordingly to enhance your value to a specific group of clients. A sound definition of your services allows clients to refer you to other people.

Include short and precise descriptions of your abilities and how you can help potential clients. The most thing to mention is your value you would bring to clients. Practice by discussing these points aloud, and use family members or friends as a source of constructive criticism.

The Presentation

Always include listening times in your presentations, as it is important for consultants to do more listening instead of talking. Use a specific formula instead of reinventing your presentation for each new project or proposal. Use templates to your advantage, and be sure it your work matches your key talking points. Templates also help you remain consistent and deliver quality service. Draft a one-page summary of your services that can be sent via email to prospective clientele.

Price Structure

Further, include your price structure. Establishing price structure requires some research into the average length of a typical project and any financial resources you’ll need along the way. When mentioning your price in any circumstance, do not under-sell yourself. Remember that your time is valuable. Use a pricing template to help you estimate the time and cost of new projects.

When the Client Says Yes

If someone agrees to your services, be sure to have your contracts available immediately. Unpreparedness can be your worst enemy. Include expectations and timelines during the process. Use an official packet or welcome email for new clients that hire you.

Believe in Yourself

Remember that your knowledge in invaluable to the client, and you may not be charging enough. Remember a key rule: charge more than you believe your worth. Also, ensure that your clients are getting a positive return on their investments. You have additional leeway in charging a good percentage if you can prove a positive ROI. Higher rates look better to current and future clients. Higher rates attract higher-paying clients.

How to Start Consulting on the Side

You can keep your full-time job or your full-time job search. You can event consult while you're in school. In the US you can also use your own social security number to consult. You don't necessarily need to incorporate your business, but you should talk to a lawyer friend or an accountant friend just in case.

You can call your consulting business anything you want, as long as no one else is using that name for the same sort of business. You don't have to pick a business name at all and you can consult under your own name if you like. You'll decide which services you want to offer.

Think about the pain you solve in your work! You can bundle your services into packages, or you can charge a straight hourly rate. You'll go through tremendous learning as you begin consulting.

You'll fret over landing your first client. As soon as you get your first client you'll have new concerns. You'll play with different ideas for products and services.

When you become a consultant, one of the first things you'll notice is how quickly your thought leadership flame will grow. As soon as you realize through experience how much value you bring to your clients, your mojo will grow and your fees will increase.

When you launch a side consulting business, your business muscles will grow, and even more importantly, your flame will grow. You'll speak with more authority. If you work for a company that has a no-moonlighting policy, find the highest-level person you can find and suggest that it might be time to do away with the policy.

You can start a stealth job search if you can't get your employer out of the fear zone far enough to lengthen the leash for you and your fellow employees. You'll probably find your first clients through networking. The first step is to tell everyone you know about your new consulting business. Tell them which services you provide. Businesses love to work with small consulting firms like yours because they tend to be more flexible and less expensive than bigger firms.

To learn more about starting a consulting business, you can post your legal requests or post your job on UpCounsel’s marketplace. UpCounsel is known for its retention of top lawyers from around the country. UpCounsel associates have impressive resumes from such distinguished schools as Harvard and Yale. UpCounsel has a positive reputation in the business community, working with such companies as Google, Airbnb and Menlo Ventures.