How to Start and Build a Successful Consulting Business
The recession has spawned a slew of layoffs, leading to a job market flooded with out-of-work professionals competing for the same slim pickings. And if you’ve been looking for work for months and your unemployment benefits are about to run out, you might be considering downgrading to literally any job just to earn some income. But before you put on a paper hat and start offering to biggie-size the fries, consider that there may be a better option that still allows you to trade on your expertise within an industry. By starting a consulting business you may be able to stave off servitude in the minimum-wage working world, and possibly even earn more than you did as a full-time employee. So here are just a few tips to help you get started with building up a clientele and earning some cash as a consultant.
The place to start is with a business plan. Although most people use this basic document as a way to convince lenders to give them startup funds (and you may need to do so), it also serves as a roadmap to success in your business endeavors. Without a solid business plan that lays out your strategies for growth, short- and long-term goals, and contingencies to deal with both setbacks and successes, you’re really just winging it, which is only a plan for failure in most cases. So before you make any plans to launch your consulting business take the time to do research and figure out how you’re going to make a success of it and whether or not it’s something you’re really interested in.
The next thing you should concern yourself with is contracts. A consultant is really just a contractor for hire, which implies that you will have a contract in place for work. Before you even start seeking out clients you need to have a firm idea of the services you’ll offer, what you’re going to charge, and the method that you prefer for payment. Many consultants require at least a portion of their fee up front (usually half) with the remainder to be paid on a schedule (in milestones) or at the conclusion of the contract (depending on duration). Without a contract in place you could find yourself working for free or chasing down clients for payment through the arduous process of filing in small claims court.
So now that you’ve got your startup ducks in a row, it’s time to start bringing home the bacon. But while you probably have a few possibilities lined up, you’re really going to need to hustle to secure new clients and repeat customers. You may have to cold call and chase down leads to ensure a steady stream of work, but there are ways to get people to come to you. One is through marketing efforts, and although you should probably opt for low-cost methods of advertising until you’re making some real money, at some point you’ll definitely want to put more cash into marketing efforts.
Of course, there’s a lot more to managing your own business, and if you realize rapid growth you may even have to bring on additional employees. But whether you’re consulting in the field of accounting, engineering, or mining contractors are probably a dime a dozen at the moment. And although they may complicate your business plan somewhat, they can also enhance your operation and help you to expand by providing for services that you may not be able to offer on your own.
In fact, consulting is one of the hottest trends in the market today, as more and more people appreciate the independence and flexibility it brings and the range of potential income that this business can generate. To add, it is also best to formalize your business structure right from the start, both for legal and tax considerations.