Are you sick of working for someone else? Do you feel you’re destined for something bigger?
Perhaps recently completing an MBA online course or similar has inspired you to see consulting as a potential future pathway? If you answered yes to any of these questions, you should consider starting your own consulting business.
Consultants are in very high demand, particularly as they can advise businesses on strategy, assist in cutting costs and maximizing profits, and give long-term roadmaps. This is one of the reasons why many professionals are keen to launch their own independent consulting practice.
Let’s learn about what consultants do and discuss how to jumpstart your own consulting business in more detail below.
What Does Consulting Look Like In Practice?
The consultancy field revolves around giving expert advice to businesses and other professionals. But success as a consultant is dependent not just on having expertise in the field, but also on a range of consulting skills, such as:
Identifying Problems
Often, this will involve data collection and analysis to identify and diagnose potential issues within a specific business model.
Teaching Expertise
Many businesses lack expertise in certain fields of knowledge, requiring a consultant to facilitate growth. Consultants use research-based and tailored strategies to give industry-standard recommendations for process improvements, like recommending organizational changes.
Implementation Support
Consultants will often take a direct role in implementing organizational changes, such as training staff or restructuring. These services are also referred to as management support, which ensures a smooth transition from the old to the new.
Executing New Methods
A degree of innovation is needed when consultants are engaging with clients. This often includes driving and fostering innovations within the client’s organization.
What Types of Consultants Are There?
The consulting field is quite diverse as consultants work in different fields and positions. There are six core types of consultants in the industry:
Strategy Consultant
These types of consultants focus on ensuring their clients are beating competitors and increasing their profits. When businesses are failing to compete or suffering a crisis in direction, strategy consultants are hired to provide suggestions on how to navigate and effectively surmount these challenges.
Management Consultant
Also known as business consultants or organizational advisors, management consultants advise on all things related to structural or organizational concerns, especially when it comes to streamlining them. More than half of all advisors are defined as management consultants.
Operations Consultant
From improving the performance of operations to hands-on implementation support for primary (sales, marketing, etc.) and secondary functions (finance, supply chains), operations consultants deal with anything related to the foundational functions of a business.
Financial Advisory Consultant
As per its name, financial advisory consultants work with questions related to the accounting, finances and balances of a business. Those working in forensic research and support disputes are also part of the financial advisory field.
Human Resource (HR) Consultant
‘Human capital’ has been the buzzword in recent years, and HR consultants help address these questions in their clients’ organizations, such as improving the performance of their HR department. Some areas of focus may include terms of employment, talent acquisition and retirement.
IT Consultant
While the majority of businesses today have adapted to the digital world, IT consultants have a responsibility to provide up-to-date advice on the development and application of these systems for businesses. These may include digital transitions, implementation of projects or training IT employees who work and manage day-to-day IT operations.
Starting Your Consultancy Business
You’ve pinpointed your consulting skillset and know what type of consultant you want to be; now it is time to take the necessary steps to start your practice. Let’s look at what stepping stones you need to take to begin:
1. Get Your Certifications and Licenses
Before doing anything, ask yourself – have I got my certifications? Do I have my licenses? If you answered no, it’s important to acquire them as soon as possible, as they not only attract clients but also ensure you are meeting industry standards. For example, in Australia, consultants working in real estate usually need a real estate license. For a legal consultant, you need to have a degree related to law.
2. Research the Market and Identify Your Clients
Besides being an expert in your field, you should also have a comprehensive understanding of the industry you are working in and identify your target audience. Market research is an effective way to gain insights into the behaviours of your future clients and potential competitors.
3. Networking
Networking is a crucial part of any successful business today; various studies have evidenced that networking has had significant positive impacts on business performance. It is, however, particularly important for consultancy, as making allies with potential partners can go a long way in growing your business. Some partners you may consider to network with can include influencers, industry leaders and even competitors.
4. Know Your Finances
Starting a business is almost always costly, and the majority of businesses fail due to financial mismanagement. As such, it is essential to create a budget and financial plan to have an idea of all the costs you may incur. Whether you are taking a business loan or not, have an idea of where you are allocating these funds and how you will spend them. A common problem many consulting firms experience is cash flow challenges, so it is important to have a coherent financial strategy to avoid this.
5. Set Your Prices
There are different consulting fee models available that you may want to consider to give structure when setting your prices. You’ll also want to know how your competitors are setting prices and if your target audience is willing to pay them. Engaging in these pricing strategies is an effective long-term method to ensure fees are consistent. Your price will also play a key role in finding the niche of your consulting endeavours, especially if your services are to be specialized.
6. Register Your Business
The next step is to undergo registration to start consulting. You’ll need to acquire the relevant paperwork work such as applying for an Australian Business Number (ABN), and any other relevant licenses and permits, especially if you want to specialize in areas such as medical or legal consulting.
7. Set a Business Plan
Business plans are great ways to ensure the long-term success of your endeavours in consulting. They serve as a mechanism to make priorities, clarify goals and targets, and crystallize any ideas relating to your operations. They also keep track of your finances, forecast profits and identify potential challenges you may encounter, such as competition.
8. Set a Marketing Plan
Never forget that consulting is a highly competitive industry, so having a strong marketing strategy is foundational to ensuring you are attracting and building a loyal client base. There are multiple marketing plans you could follow and use.
Starting a consulting business from scratch is never easy; it requires time and effort. But at the same time, many business consultants find the professional and personal growth this career path allows for is often just as rewarding.
