This is the ultimate guide to starting a successful consulting business.
Here, you’ll learn:
- How to find a consulting business idea
- What qualifications you need
- How to find clients fast
- What is consulting?
- How to start a consulting business
- What you don’t need to start your consulting business
- Popular consulting business ideas
- How much it costs to start a consulting business
What is consulting?
As a consultant, you offer your expertise to businesses (B2B) or individuals (B2C) for a fee. Your service involves identifying problems, giving advice, and, occasionally, implementing solutions.
For example, I started out consulting small business owners on how to use Facebook ads.
That’s just one possible consulting niche. The global consulting market is huge at over $860 billion in revenue with a growth rate of 1% every year.
But what exactly do consultants do?
Well, each consultant is different, but typically they use their expert knowledge to determine the best strategy for clients to achieve their goals.
Take my student Mara Freilich from Top Law School Consulting. As a former lawyer, she helps aspiring law students get into top law schools with her bespoke consulting service.
As a consultant, Mara’s role is to strategize with her clients and provide them with a roadmap to fix problems in their own applications.
Notice how this is different from contractors (like freelancers or agencies) who provide a done-for-you service.
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Freelancers do the work, while consultants guide and support.
Ready to help clients transform with your own unique consulting service? Keep reading.
How to start a successful consulting business from scratch
You might be wondering:
“I’d love to start a consulting business, but I still have a day job. How can I start a consulting business when I have so much to do?”
I used to feel the same way.
But here’s the key: Focus on the steps that matter and ignore the rest.
By that I mean, only take action on things that will set up your consulting business and bring in clients as soon as possible.
In this section, I’ll share what those crucial steps are. And in the next section, you’ll learn what to ignore.
Sounds good? Read on.
Choose a niche
There are thousands of consulting niches out there, but what type of consultant are YOU?
See, a profitable niche combines your expertise with market demand.
In short, what skills do you already have? And are there people willing to pay you to learn those skills?
So to figure out your consulting niche, the first step is to do a skills audit.
Brainstorm skills that you learned from:
- Working at your 9-5 (for example, cybersecurity, SEO, HR, or law).
- Overcoming a big challenge (for example, getting into a top university, or building a marketing strategy).
- Engaging in hobbies (for example, fashion styling, wellness, or design).
Tip: Knowledge from your corporate job is especially useful as many consultants work B2B.
For example, two of my first online businesses were in Excel consulting and digital advertising consulting businesses. I learned both of these skills in my corporate job.
The digital advertising consulting business grew to six-figures in just four months and allowed me to quit my 9-5.
But the Excel consulting business never took off. All because I didn’t research my market enough to make sure it was a business idea worth spending time on.
Read on to learn how to avoid that mistake.
Research your market
Question: Is there a demand for your consulting services?
Well, market research will help you figure that out.
But before we get to that, how do you even choose the right ideal market for your services?
As a consultant, you can work with a wide range of clients. However, there will be one type of client that gives you the best chance for success.
Who needs my services?
Brainstorm the types of individuals or businesses who value your expertise. For example, if you’re an HR consultant, both large established businesses and small startups could be interested in working with you.
Who can pay for my services?
Look, you won’t get far if you invest your time creating a business around an audience that can’t afford you. So choose a market that is able and willing to pay you.
Let’s revisit our HR consultant example. It might be safer to work with funded startups that are interested in growing their teams. New businesses without income might not be ready to invest in your services yet.
Finally, who relates to you?
Even if you’re working B2B, people buy from people. Your unique background and experience will resonate with your future clients.
For example, if you work as an HR manager for a law firm, you’re in the best position to become an HR consultant for legal businesses. You already know how they operate and can tailor your services to their unique needs.
Now that you have a market in mind, let’s learn more about them with market research.
The first step is to look at what’s already out there.
Are there other consultants in your niche doing well? Are your ideal clients looking for your services on sites like LinkedIn, Facebook groups, and Reddit?
You can also reach out to potential clients directly or ask around in your network.
This is how you validate the existing demand.
If you find that there aren’t any consultants doing similar work or your ideal market isn’t interested in a service like yours, you might need to rethink your niche.
Still stuck on choosing a niche? Check out this video:
Create and price your consulting offer
Now that you’ve chosen your niche and researched your market, let’s move on to creating and pricing your consulting offer.
Here are a few different ways you can price your consulting services:
- Hourly: Hourly pricing means offering your time for a fixed fee, so your value is in your hourly rate rather than the outcome. This pricing model can work well if you have a done-for-you element (like creating a bespoke AI tool if you’re an AI consultant). However, it’s easy to end up doing more than initially agreed when you charge per hour.
- Packages: Consulting packages allow you to charge a fee for a singular project. You can define the project by time (like three months) or by project completion (like a launch package to help new businesses launch.)
- Retainer: A retainer is like package pricing, but it’s for ongoing projects. For example, as a marketing consultant, your project might not have a definite end date. Instead, you charge a monthly fee for your services.
Which is the right choice for you? Well, every consultant works differently. But the most successful pricing model is package pricing.
This is because your package can focus on the results your client can expect after working with you, not just your time.
So how much should your consulting package cost?
Great question. I started by charging $5,000 for a 6-month package as a new consultant.
And you know what? It worked for getting my first client! But then I struggled to book future clients.
That’s because I hadn’t established my reputation yet.
So for a limited time, I created a smaller offer:
$1,500 for a 3-month consulting package.
With this package, I was able to book more clients and increase my rate as I got more client testimonials.
This is also the pricing model I recommend to my new students.
If you want to learn more about how build your reputation, take a look at this video:
Next up: Registering your business.
Set up and register your consulting business
Do you need to register your consulting business?
It depends on the regulations in your state and your industry.
However, most consultants choose between two legal structures: sole proprietorship and LLC.
A sole proprietorship works for many consultants because it’s simple to start. Taxes are relatively simple to manage too. But as a sole proprietor, you’re personally liable for all aspects of your business.
Alternatively, you can start an LLC (limited liability company). With this structure, the business is a separate entity from you so you’re protected from any liability. However, it’s a more complicated business type to start and manage.
Take a look at this guide by SBA to learn more about them.
Establish your brand
The next step is to build a brand. Let’s start with the name. Fortunately, choosing a name for your consulting business is easier than you might think.
My advice is to keep it simple. Use your own name (like I do, LuisaZhou.com) or add “consulting” if your name is common (for example, LuisaZhouConsulting.com).
Using your own name works because your consultancy is your personal brand. You can always change your name later so don’t spend too long on this. (Instead, focus on getting your first paying clients.)
But your brand is more than your business name.
Your brand includes things like your story and values.
So, how do you create your consulting brand? Think about these five questions:
What is your story?
This is not your life story, but the story of why you started your business. For example, I was inspired to start my business when my mother was diagnosed with cancer, my father collapsed due to heart problems, and my sister had an accident that almost led her to lose her eye sight. I wanted the flexibility and income to be there for them when they needed me.
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With some trial and error, I created a six-figure business that gave me that freedom and now I help others do the same.
What are your values?
This is so important because people trust and connect with people through their values. For example, my top three values are integrity, family, and value. I live by those values with everything I do, and it helps clients resonate with me.
What is your “secret sauce”?
I’ve worked with several consultants. And you know what? They all have their own special way of working with clients to reach their goals.
Think about how your approach makes you unique.
How is your service different?
Your secret sauce is about how you work. This question is about what your package includes.
Is your package more comprehensive? More efficient? What makes your package stand out?
How is your audience different?
Serving a specific audience will make designing your brand so much easier. You can then laser-focus your content to speak to that audience.
Still stuck on building a brand? Here’s a video that will help:
Find your first clients
You might be thinking:
“Okay Luisa, you told me to focus on getting my first clients. But where do I find these clients?”
Don’t worry! By the end of this section, you’ll know exactly what you need to do to bring in clients.
First, here’s a quick list of marketing strategies that work for consultants:
- Advertising at events
- Running social media ads
- Building organic traffic to your website using search engine optimization (SEO)
- Posting consistently on social media
- Speaking at events and conferences
- Cold calling or emailing potential clients
- Writing guest posts for industry blogs
- Guest hosting on industry podcasts
- Growing an email list
- Networking online and offline
Now all of these strategies have a time and place. But one mistake I see so many new consultants make is trying too many methods at once.
I recommend focusing on one or two strategies in the beginning. Why? Well, doing too many things will just leave you feeling overwhelmed and burnt out – especially if you’re still working a 9-5 job.
Which methods should you choose? Simple, the ones that will help you get clients the fastest.
In other words, the lowest hanging fruit.
Strategies that are low-hanging fruit for your consulting business will depend on your niche. But some things are universally effective.
For example, networking. If you have an existing network, let them know you’re offering consulting services. You could even add in an incentive for referrals.
That’s a relatively simple way of getting your name out there.
You can also post high-quality content to LinkedIn to attract potential clients from your industry. Or pitch yourself as an expert guest host for podcasts in your niche.
Ultimately, the one or two strategies you choose to focus on should be easy to fit around your work schedule and have low upfront costs.
Once you’ve booked your first clients, it’s time to wow them with your service.
Let’s talk about that next.
Now that you have your first consulting clients, you need to deliver on the promise of your offer. If you used the package formula we talked about earlier, your client should have a clear result after three months of working with you.
So work backward to design your program. Divide your overall result into milestones for each month and support your client through each milestone.
For example, as a career consultant, your process might look like this:
Month 1 – Defining the dream career
In month one, you use a range of tools to help your client discover their strengths, weaknesses, needs, and wants.
Month 2 – Research and networking
In month two, you help your client reach out to people in their potential new field to build connections.
Month 3 – Nailing the interview
In the final month, you help your client nail their interviews.
As you help your clients succeed, ask them for testimonials and referrals. Both are incredibly powerful when it comes to marketing your services.
So by delivering an excellent service to your clients, you’re likely to get more clients through word of mouth.
Now, let’s talk about scaling.
Grow and scale your business
So you’re getting consulting clients and helping them achieve their goals. How do you take your business to the next level?
First things first – what can you outsource?
By outsourcing tasks, you can free up your time for tasks only YOU can do (for example, working with clients).
Common things to outsource include accounting, marketing tasks, admin, and so on.
Then, think through how you can scale your offer.
Once you’ve reached the capacity of how many clients you can work with on your own, you can scale in several ways.
You could expand your team by hiring other top-quality consultants to work for you.
Another way of scaling is to create online courses or group programs. That way you expand beyond one-on-one work, so you use less time to sell to more clients.
Top tip: When you want to scale, stay organized.
If you want to grow your business to six-figures or more, systems are key. Systematize, automate, and streamline as much as possible in your business. This will make it easier to grow and scale in the future.
And there you have it! That’s how to start a consulting business.
In the next section, we’ll talk about what NOT to do. Stay tuned.
What you don’t need if you’re starting a consulting business on the side
When you start a business, you need to be focused on one thing:
Bringing in new clients.
It’s easy to get distracted by all of the other things that more established business owners focus on. Like growing social media followers, building sales funnels, and other more advanced strategies.
In the beginning, I say keep things simple – especially if you have a 9-5.
With that in mind, here are some things you don’t need to spend time on right now:
The first thing you don’t need right now is a business plan.
You’ve probably heard that you need a business plan to set yourself up for success.
And that’s true – you do need a plan to grow your business.
But you don’t need a novel-size document to get started.
The business plan I wrote for my first tech startup was HUGE… and it still failed. Compare that to LuisaZhou.com which made $1 million in its first year where I didn’t create any business plan.
The truth is, you don’t even need a full business plan document unless you’re applying for funding. And as a consulting business, you don’t really need funding to get started, since costs are so low.
So the less time you spend on this, the better.
If you want to create one, write a clear statement of your business objectives and strategies for achieving them.
How do you do that? Answer these questions:
- Who will you sell to?
- What will you sell?
- What else can you sell to your repeat customers?
- How will you find new clients?
You can learn more about how to write a one-page business plan in this post.
The second thing you don’t need right now is a website.
The mistake I see so many new consultants make is getting hung up on launching a website.
To be honest, even the most beautiful website won’t help you grow your business that much.
It’s only a distraction from the real activities that will bring in clients.
When I started my business, I didn’t have a website. And I made close to $20,000 in my
business before I built one.
As a consultant, you can get by with an active, branded LinkedIn profile. When you have a few clients, you can build a website and an email list to start expanding your brand.
Finally, you don’t need an elevator pitch right now.
An elevator pitch is a summary of who you are, who you serve, and how you serve them.
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But – again – it’s not going to sell your services.
As a new consultant, your services and even your niche might change slightly as you figure out who you work best with.
So don’t waste time on the perfect elevator pitch that will probably change later.
Instead, focus on building relationships in your niche and helping your clients get great results.
Next up: Consulting niches.
Different types of consulting
Hopefully after reading this article, you’re already full of ideas on what type of consulting business you can start.
But if you still need a little help, don’t worry.
Here are 11 profitable, fulfilling consulting niches you can start today:
Strategy consultants help businesses create a big-picture plan for growth and support them as they implement it. They can work for any type of business. So you can niche even more by becoming a strategy consultant for a specific industry or sector (for example, financial strategy consultant).
As a marketing consultant, you help businesses create and implement marketing strategies that would work for them. You can specialize in things like copywriting, video marketing, SEO, paid ads, or digital advertising.
I personally got started in this niche when I launched my digital advertising consulting business.
Being a sales consultant means working with businesses to improve their sales processes. You’ll work with individual entrepreneurs who want to improve their sales skills. Or you could work with sales teams to help them reach their targets.
FOr example, my student Sanae is a successful sales consultant. She worked as a sales consultant in her corporate day job and decided she wanted more flexibility in her life.
So she started her own business and – by following my process – she made $30,000 in three months.
Business consulting is a broad term – you essentially help people improve their businesses. But you can niche down by focusing on a specific industry (like a consultant for real estate businesses) or a specific audience (like business consulting for startup entrepreneurs).
Management consultants help businesses run smoothly by advising on better management practices. This is a good fit if you have operations and management experience. This is the space where companies like McKinsey or Bain are active.
Human resource consulting
HR is one of the biggest pain points for businesses. Human resource consultants help businesses improve hiring, training, and employee satisfaction strategies. And if you have experience with diversity initiatives, healthcare management, or another specialist aspect of HR, you could stand out in the industry.
Got a background in IT? IT consulting is a varied role worth exploring. You could be helping businesses manage software, improve data collection, set up new applications, or advise on systems to streamline operations.
Career consulting is one of the most inspiring and versatile niches. You could work with teams to help people identify their skills and thrive in their corporate roles. Or you could work with individuals.
That’s what my student Emily Liou does. She started her business Cultivitae to help career women find and land their dream jobs.
If developing a strong brand story is one of your skills, you would be a great brand consultant. Businesses from all industries need help defining their audience, creating a consistent brand message, and designing a marketing strategy to reach that target audience.
Brand consultants usually have a background in marketing and advertising. You could also have hands-on experience in web design.
Many businesses struggle with their accounting – especially as they scale from small businesses to medium or large businesses. That’s where accounting consultants come in.
You would advise businesses on how they can create streamlined accounting systems to manage their bookkeeping. Some financial consultants specialize in helping businesses define their financial strategy or get out of tough financial situations.
AI consulting is a new consulting niche, but the demand for it is on the rise. In fact, more than 80% of businesses use AI in their day-to-day operations in some way.
If you have experience with using AI to improve business operations, you could stand a lot in today’s consulting industry. You could help businesses implement AI into their processes or even develop their own AI tools.
Now you have a niche in mind, how much does it cost to get started? We’ll talk about that next.
How much does it cost to start a consulting business?
Creating a consulting business doesn’t cost much. You don’t need an expensive certification, a physical office, or even a website.
Instead, you can get started with the knowledge you have and work with clients right away.
You might spend a little on business insurance, registration, and travel to in-person clients and networking events. But you can keep costs low in your first couple of years of business – especially if you build your business online.
Ultimately, your costs to start a consulting business depend on things like what support you hire. I personally spent six figures on learning sales, marketing, and other skills – because I couldn’t find the right support.
That’s not something most people need to do, though.
I’ll explain more in the next section.
When I started my business, I couldn’t find a single program that talked about how to start a business if you wanted to quit your day job as fast as possible.
All the programs out there talked about strategies that would take years, like building an email audience. (And I certainly didn’t want to hustle a full-time job and a side business for that long.)
That’s when I started developing my own system and started a service business that was highly profitable and scalable.
Want to learn what that strategy looks like?
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