Starting a Consulting Business

Consulting can be a lucrative enterprise if you do your homework before setting up shop

By Judy Artunian, Freelance Writer

If you’re an expert in a field and have a passion for sharing that expertise, you’ve aced two of the most important qualities of a successful consultant. It’s also critical to have a knack for working with a wide variety of personalities, and an unflagging drive to market your services. Whether your specialty is helping corporations recruit chief executives or developing ad campaigns for the automotive industry, there are certain steps that nearly every consultant needs to take before launching his or her own business.

Those business-building steps include:
1. Define the services you have to offer.
2. Identify your target markets.
3. Establish your consulting fees.
4. Create a marketing plan.

Develop a business plan

There is no one-size-fits-all business plan. Get the best fit for your consulting firm.
Try: Business Plan Pro is designed for start-ups. It includes more than 500 sample business plans and a step-by-step guide to creating your own plan. You can also download award-winning business plans at BusinessPlans.com.

Prospect for clients

You’ve pinpointed your target markets in your business plan. Now it’s time to connect with those markets.
Try: Trade association conferences provide a great opportunity to meet and mingle with people who might be interested in your services. Identify the associations that serve the industries you’re targeting. Check the associations’ Web sites for a schedule of events. If you are willing to pay a setup fee and commission, you can find consulting projects through eWork Markets. Consulting firms that qualify get access to consulting-project listings that are posted by a wide range of organizations, including Fortune 500 companies.

Polish your networking skills

Learn how to leave a positive impression with the people you meet at industry and social events. Nail down your “elevator pitch.” It should be a quick and memorable overview of your business plan that introduces listeners to what you have to offer.
Try: Sign up for networking events held nationwide from organizers like Networking for Professionals and NetParty (geared to young professionals who want to mix business and socializing). Bone up on your networking skills with the American Marketing Association's detailed guide to networking. To develop your elevator pitch, start with a brainstorming session, then check out these elevator pitch tips.

Stay in touch with your contacts

Keep in touch with people who have expressed interest in your services. Send an e-newsletter or other electronic direct mail pieces that provide tips to help your contacts deal with their business challenges.
Try: Create your own e-newsletter with Constant Contact's templates, then distribute the newsletter using Constant Contact’s e-mail delivery and management services. Another way to stay visible is to share your business knowledge and observations on a blog. Send highlights from your blog to your contact list (always use permission-based, opt-in e-mail lists). Two of the most popular business-blog platforms are Typepad and WordPress.

Take the podium

Look for opportunities to deliver speeches to groups that might include prospective clients. Organizations ranging from the local chamber of commerce to international associations are always looking for professionals who can deliver an engaging talk related to their field of expertise.
Try: Contact conference planners at trade associations that serve your target markets. To find business groups close to home, conduct a search for “business organizations” on Local.com. If you’re an experienced speaker, sign on with a speaker’s bureau that will find speaking gigs for you. The International Association of Speakers Bureaus provides a list of bureaus with contact information. Need some guidance in how to deliver a great speech? Join a local Toastmasters International club.

Stay up-to-date

Be a news hound on behalf of your clients. You can’t serve them well if you don’t know what’s going on in their field.
Try: Google News and Yahoo Finance make it easy to get the latest news on developments in the industries of your choice.

Decide on a business structure

When deciding on your business structure, consider how vulnerable you might be to legal liabilities. A sole proprietorship is simple and inexpensive to set up, but it won’t protect your personal assets in the event that your company is sued. Protect your assets by incorporating as a Limited Liability Company (LLC).
Try: Go to The Company Corporation for affordable incorporation packages.

It’s tough for new consultants to find out what other consultants in their field are charging. In general, the more specific your area of expertise, the more you can charge. It can also help if you have worked with a company that is highly respected in your field, authored a book, or have earned an advanced degree or special certifications.
Consider charging an hourly or daily rate when first starting out. Once you’re established, you can charge a per-project fee or ask for a retainer.
Working out of a high-rise office space might lend an air of sophistication to your image, but when you tally the rent, parking fees and commuting costs, a home office might be sophisticated enough for your needs.