Starting a Consulting LLC: Everything You Need to Know
Starting a consulting LLC might be the best choice for you and your business. Consultants are not permanent employees, they're independent contractors.3 min read
Starting a consulting LLC might be the best choice for you and your business. Consultants are not permanent employees of the businesses they consult for but are rather independent contractors. A consultant might be able to assist in problem areas of a company, whether these issues pertain to legal, compliance, staffing, etc.
There are many reasons to start your own consulting business. You might want to use the skills and background that you earned in your prior career to form your own company and assist businesses that are struggling in certain areas. You may also wish to become self-employed and have greater flexibility over your own career.
How to Start a Consulting Business
Below are the steps required to start a consulting business:
- Identify your own skills.
- Decide what type of specialty you want to have.
- Conduct research in that field of specialty.
- Pinpoint your audience.
- Determine how you will sell yourself and your company.
First, you will need to assess your own skills. What did you do in your prior career? What are you best at? For example, if you worked in the recruiting realm, you might want to start a consulting company that will assist businesses in the recruitment process of new hires.
Next, you’ll need to decide your specialty. To further the example above, if you worked in the recruiting field for another business, you might want to work in this same area. However, you might be leaving your prior career altogether because you were unhappy with the work. In this case, you can choose a different specialty that you might have greater interest in.
You’ll need to do some research into the specialized field that you choose. Even if you choose a specialty that you have several years of experience in, you might need some new skills when forming your own consulting company. In fact, forming your own company will require you to have additional skills required of any business owner.
Next, think about your audience. Are you hoping to conduct services for larger businesses? If so, you will need to market yourself properly, as selling yourself to large corporations can be difficult. Consider the contacts you made in your prior career. Can you utilize them to introduce you to others?
Put your sales hat on. Now that you own a consulting business, you have to learn how to sell yourself. Build your reputation and use your contacts to obtain new business.
Find a Client Prior to Forming Your Consulting Business
Before even starting your consulting business, it is a good idea to find some clients first. Creating the business is the easy part; it’s finding the companies to do business with that is harder. Therefore, before even creating your own consulting LLC, try to speak to your friends, family, and business networks to ensure that you will have contractual agreements in place almost immediately after forming your business. Think about the relationship you can build with those clients and determine how much money you will charge, how long the engagement will take, and if additional business can be done after that initial engagement ends.
Basic Business Knowledge
When forming your business, you will need to think about the requirements for ongoing maintenance and upkeep. This includes business structure. You can choose a sole proprietorship, partnership, LLC, or corporation. Keep in mind that, even if you form a consulting LLC, you can eventually become a corporation if you expand and become large enough.
Other basic business facts that you should be mindful of include the following:
- You will need to obtain a business phone and cell phone, as this can make communicating with you much easier, particularly since consultants might be traveling to other client engagements throughout the week.
- Obtain required business licensing and permits.
- Obtain proper insurance for your business.
- Obtain proper business letterhead, email address, and a potential website, as this can add to your credibility as a consulting business.
If you need help forming a consulting LLC, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.