If you want to work for yourself, starting a consulting business is one of the smartest ways to do it. It’s flexible, scalable, and can be incredibly lucrative. In fact, you can charge hundreds of dollars per hour or thousands per project when you’re established.
But because organizations are willing to spend the big bucks hiring a consultant, you need to present yourself as a trusted expert and provide a well-structured service offering. This, of course, requires much thought and preparation, as well as setting up your business for success from the start.
To simplify the formal and legal requirements, we recommend ZenBusiness. We’ll show you how to get set up with this business formation service and guide you through every step of starting a consulting business, from selecting the right niche to winning your first clients.
Crazy Egg’s Favorite Tools for Starting a Consulting Business
Though ZenBusiness is our number one business formation tool to help you start a consulting business, we reviewed a range of the best business formation services. Here are some more of our top picks:
More Top Business Formation Services
If you’re keen to get help with the complex legal stuff involved in starting a consulting business, take a look at our in-depth analysis of the best business formation services on the market. We reviewed a number of service providers and chose the best according to what we believe are vital criteria. We found the services that make the process of registering a business quick, easy, and stress-free.
Step 1 – Get Started with ZenBusiness
Registering your company as an LLC gives it legitimacy and protects you legally. Before registering, decide on a business name and check that it’s available using your local secretary of state website. Obtain an Employer Identification Number (EIN) from the IRS if you intend to hire employees.
Check if you require any particular licenses to operate as a consultant in your field within your state. And create an operating agreement if your state requires it. This legal document names roles, responsibilities, ownership, and the structure of the business. Furthermore, you’ll need to appoint a registered agent, a third party that acts as a point of contact for your business and recipient of any legal documentation.
This is all the prep work needed before you file your documentation and form an LLC. ZenBusiness has a number of paid plans available that include a registered agent service, the creation of your operating agreement, and EIN registration. The service helps you create and file documents to set up the LLC for free – you only have to pay state fees.
The easiest way to figure out what kind of help you’ll need setting up your consulting business is to register with ZenBusiness. The service will ask you a series of simple questions to offer personalized service recommendations.
Step 2 – Choose the Right Niche for Your Consulting Business
A consultant’s job is to offer expert advice, strategy, and guidance to an individual or organization. Thus, you must play to your strengths and draw on your experience when choosing a niche.
Some of the most common types of consulting are:
There are further subsets within each of these categories. It’s a good idea to narrow down your niche. You’re more likely to establish yourself as the go-to person in a smaller niche, for example, becoming the leading TikTok consultant rather than the best in the entire marketing or social media industry.
Or you can come up with a unique service offering entirely, as long as you do your due diligence to ensure there’s a market for your business idea.
Use an SEO tool or Google Trends to see if people are searching for the services you’ll offer. For instance, a search for the term “set design consultant” produces no data which indicates there may be little interest:
Another option is to gauge interest from potential customers. You may reach out to them directly, send out a survey, or run a social media poll. The method you choose depends on whether you have existing contacts in your industry to reach out to.
A social media poll doesn’t necessarily require existing contacts, just access to a group of industry professionals. For instance, find and join appropriate LinkedIn groups. This search would work for our set design consultancy idea:
Step 3 – Research Your Target Market
Carry out market analysis to discover gaps in the market and find a way to position your consulting business in the competitive landscape. Create a competitive analysis report. Here’s an example of how to do it, using a template from HubSpot:
Here, you gather all the important data and information about each competitor and outline your competitive strengths in the “Our Response Strategy (and How We Win)” column.
Also, research your target market to discover your potential client’s pain points and needs, along with how you can help them. This will help you narrow down the services you should be providing. Plus, you’ll be able to work out what kind of messaging to use to appeal to leads and how to provide a better overall service than your competitors.
Reach out to potential clients and ask them to take part in a survey. It may be difficult to get strangers on board, so utilize your network and reach out through contacts wherever possible. If you don’t have an existing network, you may need to warm up contacts first before asking them to take part.
Here are some example questions:
- What is your number one goal for this [quarter]?
- In which areas do you need support to achieve these goals?
- What are the top challenges you’ll face this quarter?
- Have you worked with consultants previously? In which areas could their service have been improved?
Step 4 – Structure Your Services and Set Pricing
Give potential clients a clear understanding of your offering to help them in decision-making. If you choose to offer a bespoke service, precisely what you do will differ on a project-by-project basis. But you must still define and list the general types of services you offer as a consultant.
Here’s an example from a tradeshow marketing consultant:
You and the client can choose exactly what they need from the list after an initial assessment.
Another option is to offer service packages. This makes sense when you have different client segments that require different sets of services, for example, small, medium, and large businesses. Or, here, an HR consultancy offers packages determined by how much infrastructure the client already has in place:
Package your services according to what makes sense for your clients, industry, and/or business structure.
The way you structure your services affects pricing. Offering packages makes pricing straightforward – you can offer a set fee for each package. However, if you’re working on a project-by-project basis, the smartest option is custom pricing based on the services you’ll offer and any expenses involved. Research how other consultants in your industry price their services to be able to offer competitive rates.
Step 5 – Set Up A Website
Set up a website as your communications base. It’s where people will find you online, make contact with you, and register their interest in your consulting services.
Consider your website an opportunity to create your personal brand. Use it to demonstrate your expertise and experience within your industry. Here’s an example from marketing pro Neil Patel:
Here, you can see some mega credentials that act as serious social proof. Similarly, you can mention:
- Publications you’ve been featured in
- Awards you’ve received
- Popular projects you’ve been a part of
- Experts that endorse you
- Results you’ve achieved
- Well-known clients you’ve already worked with
Additionally, be sure to display all the key information a potential client needs on your website. At a minimum, share your services, credentials, and a way to contact you. Even better, explain how your consulting services work to help the lead make an informed decision and to set expectations for what you’ll achieve.
This management consultancy clearly outlines its approach to employee learning and development:
Though some variables depend on the needs of the individual, the potential client gets a clear picture of what they’ll receive if they decide to hire the consulting company. You can go even further by outlining, for example, a more precise step-by-step method or alluding to an exclusive, proven strategy you use.
Step 6 – Market Your Consulting Services
With the foundations in place, it’s time to spread the word about your consulting business. First, be sure to implement a solid SEO strategy, as search remains the main source of website traffic. Consider that most users who need a consulting service are likely to begin their journey with a Google search. SEO will increase your consulting website’s search engine results.
Next, find the right channels through which to attract your audience. For instance, a fitness consultant is more likely to find clients by posting content and interacting with users on Instagram, while LinkedIn will serve an HR consultant better.
However, consulting experts at MBO Partners believe the best marketing strategy for consulting businesses is networking,
“One of the biggest secrets of consulting success is developing a strong network. There are many ways to network, be it attending relevant conferences, local meet-ups, and promotional events to connecting with people online and setting up virtual meetings.”
Depending on your industry, you may also want to advertise on specialist websites or trade magazines. Use a simple Google search of your niche plus “top publications,” “top blogs,” or “top magazines” to find them. Here’s an example:
If you set up stalls at trade shows as part of your marketing strategy, you’ll need to print materials for attendees to take away, such as a pamphlet or brochure. This should summarize the information you have on your website, e.g., services and value proposition, and have clear contact details along with social handles.
Finally, you may want to develop a cold calling or cold email strategy. Remember that somebody is unlikely to hire you after just one interaction. So your first communications goal is to garner interest and encourage potential leads to explore your services further.
Step 7 – Win Consulting Clients
Use a defined sales strategy to consistently bring in new clients. Develop a sales funnel (or multiple sales funnels) to make guiding potential clients through the buying journey easier and more efficient. Here’s a template from Pipedrive:
In step one, define the ways you’ll bring potential clients to your value offer. For instance, you may use SEO and social media content to bring leads to your sales page. Your value offer may be a lead magnet where you encourage users to sign up for your email newsletter in return for a freebie, e.g., an industry whitepaper.
In step two, you figure out if the user is a good lead or not. Are they worth nurturing further? For instance, they may not have the budget to hire you, or they may not fit your ideal customer profile. Achieve this by setting up an opt-in email form and adding a couple of simple qualifying questions, such as “How many employees do you have?” This ensures you don’t waste your time or resources on leads that don’t make sense for your business.
Step three comprises how you’ll turn leads into clients. For example, you may set up phone call appointments. Or perhaps you’ll use an email drip campaign in which you send a sequence of emails slowly building up to a call to action.
Continue to monitor and tweak your sales funnel based on success metrics such as the rate of conversion.