How to Start a Business Consulting Business

Starting a business can be a daunting task, but when your objective is to assist others in enhancing their own businesses, the challenge becomes even greater. When contemplating how to establish a consulting business, exploring a specific niche proves to be a beneficial approach. Whether your expertise lies in HR (managing a company's workforce, encompassing tasks such as sourcing, selection, hiring, and compliance), strategy (enhancing performance, potentially through effective workflow management), technology (implementing and delivering innovative software solutions), or any other consulting service aimed at aiding businesses in their improvement and growth, focusing on a particular area can be advantageous.

Within these various categories, clients seek guidance without the need to hire a full-time advisor. This is where your expertise comes into play. If you possess valuable knowledge and skills to offer and relish the idea of being your own boss, you may find yourself on the verge of embarking on your own consulting venture.

Evaluate your strengths to identify where your expertise can be of significant assistance. Additionally, objectively assess any weaknesses or skill gaps you may have and proactively work towards filling those voids. Moreover, be aware that certain areas of specialization might require specific certifications or licenses. For instance, obtaining a certification from the National Society of Fundraising Executives can prove advantageous for fundraising consultants.

By thoughtfully navigating these initial steps, you'll be well-equipped to embark on a successful consulting journey and make your mark within the industry.

Mastering the Art of Establishing a Consulting Business in 9 Steps

In a world where work processes grow increasingly intricate and our economy continues its globalization, the demand for competent consultants has reached unprecedented heights. IBISWorld projects that the consulting industry will generate revenues surpassing $261 billion in 2020, emphasizing the immense opportunities available.

Declaring yourself an independent consultant is quite fashionable nowadays. Once you've identified your niche in the consulting realm, follow these essential steps to establish yourself as an influential voice within the industry.

Step 1: Evaluate Your Strengths and Skill Set 

Consultants are often hired to resolve problems that businesses cannot tackle internally. After all, why would a company pay someone unfamiliar with their operations to come in and provide guidance? Hence, when beginning a consulting business, possessing in-depth knowledge in a specific area is crucial to delivering substantial value to your clients.

Consider the various consulting domains available for your business. For instance, if you possess extensive computer expertise, establishing yourself as a computer or IT consultant could be a wise choice. Alternatively, opportunities abound for PR experts, accountants, digital marketers, and individuals skilled in business strategy.

Step 2: Uncover the Demands of Your Target Market 

Once you have identified your niche, delve into the questions, challenges, and pain points faced by businesses in your chosen area of expertise. Merely possessing a strong skill set and extensive knowledge in your field is not sufficient. If your consulting business cannot address the problems that businesses encounter, you may struggle to make progress.

The most effective way to determine the wants and needs of your market is by seeking input. Start by conducting online research to discover relevant blogs within your niche. What topics are the thought leaders discussing? Where is there significant confusion or heated debate in forums or comment sections?

You can also identify market pain points by leveraging your network. For example, if you aspire to launch a digital marketing consultancy, consider individuals who own businesses, collaborate closely with digital marketers, or are digital marketers themselves. You likely have a network of contacts, so reach out to them and inquire about the challenges they face in achieving their short and long-term goals. Then, determine how your business can provide assistance.

Step 3: Harness the Power of Organic Marketing 

As an independent consultant, the responsibility falls on you to grow your client base and ensure a consistent flow of business. The most effective approach is through marketing, and organic marketing stands out as the optimal strategy.

Business owners possess two significant advantages with organic marketing. Firstly, they often have connections within their industry and can refer clients to you. Similar businesses tend to associate with one another, so if you establish a positive working relationship with someone, it's likely they will recommend you to their peers.

Secondly, organic marketing is cost-effective—it doesn't require a financial investment. I may be biased about the effectiveness of organic marketing because it's free.

Step 4: Invest in Essential Tools for Your Trade 

Hopkins successfully built her business by utilizing technological tools that facilitated and maintained connections with clients, prospective employees, and her assistant. I employ three types of recruitment software, including web-based platforms that simplify job postings. MightyRecruiter, for instance, feeds job listings to prominent sites like Indeed, Monster, and LinkedIn, consolidating applicants in one space and saving time. 

ZipRecruiter, on the other hand, is ideal for low-level positions. LinkedIn offers a two-tiered recruiter service for reaching out to candidates or seeking referrals. The monthly cost for MightyRecruiter is $300, while ZipRecruiter costs $1,000 annually. LinkedIn's RecruiterLite is priced at $150, and the corporate option is $700. Overall, I pay approximately $500 per month for these recruitment tools, which grant her access to a wide range of job seekers, from culinary professionals to data scientists.

Additionally, I recommend investing in video conferencing software, which costs around $200 per year, as it enhances client connections. When clients join the video conference, they get a sense of familiarity with me. They know my physical attributes, such as being 6'2", having a vibrant personality, and expressive blue eyes. Even without a physical office space, they establish a connection with me.

Besides these specialized tools, new consultants should also consider the essential requirements common to most small business owners: developing a well-designed and navigable website (around $2,000, plus $200 for hosting), ordering business cards, establishing an LLC (costs vary by state), opening a business checking account and business credit card, and hiring an accountant for bookkeeping and tax filing (approximately $700 annually for a small business).

Step 5: Make Smart Staffing Decisions 

Determining whether you require or desire staff to assist you depends on the workload you have. Working excessively long hours, even if you're incredibly Zen, is unsustainable. This becomes a possibility if your company experiences success and continues to grow.

At this stage, there is no benefit of taking on more work than you can handle alone. However, hire an on-demand assistant who resides overseas and handles the operational aspects of consulting on a part-time basis.

Collaborate with the client, compile the job description, and let them takes care of finding resumes, candidates' profiles on LinkedIn, and all the arduous uphill tasks. Outsource those hours to them and maintain a B2B relationship. 

Step 6: Master Your Elevator Pitch 

Having an impressive skill set, a solid marketing plan, and the latest tools won't be of much use if you struggle to make a compelling sales pitch. Persuading potential clients to choose your consulting business starts with your elevator pitch.

Your elevator pitch should be concise and impactful. It should provide an explanation of the problem faced by your target audience, the solutions you offer, and what sets you apart from the competition. While you may feel passionate about the services you provide and the industry challenges you observe, it's crucial to keep your pitch brief, preferably limited to three sentences.

Essentially, your elevator pitch represents your value proposition. Once you deliver the concise version of your value proposition and a potential client expresses interest, you can delve into your story and provide more detailed information about your consulting services.

Step 7: Craft Compelling Client Proposals 

Writing client proposals often serves as the final step before onboarding a new client, effectively sealing the deal. Therefore, creating persuasive proposals is a critical aspect of securing business for your consultancy. Client proposals present an opportunity to demonstrate how you can serve and solve the client's problem. It's essential to clearly outline the project, explain why you are the right consultant for the job, and provide a timeline for project completion.

Additionally, be explicit about all the project details, including deliverables, budget, and the metrics you will use to measure results. Be clear, compelling, and close the deal with the client.

Step 8: Establish Your Pricing Strategy 

Determining the right pricing for your consulting services can be challenging when you're starting out. Fortunately, Hopkins offers a straightforward formula to follow. When I initially started freelancing, I converted my HR manager salary into an hourly rate. However, that rate was too low for a consultant. Now, I charge double that hourly rate, and it has been a progression.

As an independent consultant assuming more risks than an in-house option, it's important to progress beyond the initial converted hourly rate. Hopkins suggests showcasing the value you bring to your clients' companies. For existing clients, I created a cost/benefit analysis to demonstrate the amount of money they saved compared to working with a traditional recruiter or a different independent consultant. 

Based on that analysis, I informed them that my rates would increase by 25%, presented the new hourly rate, and every single one of them accepted without hesitation. I showed them the math. Now, I pitch new clients at the new rate, and no one has claimed I'm overpriced. In fact, I'm probably still undercharging. However, I enjoy working with small businesses and startups, and if I want to collaborate with them, I can make it work. If they have a strong mission and vision, if they exhibit ethical practices and treat their new hires well, I'm willing to assist them because I know there are recruiters and consultants who won't.

Step 9: Maintain Organization and Deliver Results 

Once your consulting business is on track, it's crucial to remain organized and consistently deliver results in order to secure repeat clients and generate referrals. Staying organized is important to avoid losing valuable information, missing deadlines, or failing to follow up on client payments. 

Consider automating certain processes, such as receiving electronic payments instead of checks or adopting an online bookkeeping system like QuickBooks. Utilizing software such as Infusionsoft can help you effectively manage your client base. If needed, you may even consider hiring a virtual assistant.

Delivering results is a more nuanced aspect, but it's paramount to the success of your consulting business. Stay updated on industry trends and regularly communicate with your clients to ensure that you're delivering the desired outcomes that help their businesses achieve their objectives. If you successfully assist your clients in reaching their goals, your consulting business will thrive.

Choosing a Consulting Niche: Exploring Specialization Opportunities

Determining which area to specialize in can be challenging if your expertise applies to multiple industries. When starting out, it's advisable to consider focusing on a niche with consistent demand or exploring emerging fields where you can establish yourself as an industry expert. Here are some niche consulting areas worth considering:


Being an independent accountant falls under the realm of consulting. As an accounting consultant, you assist businesses in managing their financial needs and bookkeeping. While being a Certified Public Accountant (CPA) is beneficial, individuals with a background in bookkeeping can also venture into this consulting field.


As a brand consultant, you work with businesses to identify and refine their brand voice and image. By understanding a business's customers, you craft a brand that resonates with the target market. Having a background in marketing is advantageous for becoming a brand consultant.

Web Design 

Many businesses require expertise in web design. As a web design consultant, you collaborate with businesses to create on-brand websites that meet their specific requirements. A background in computer engineering is beneficial in this consulting area.

Human Resources 

You can become an HR consultant, offering assistance to businesses in staffing, employee management and providing guidance on best practices for employee satisfaction. This can include tasks such as writing job descriptions and supporting the onboarding process.

Green Living 

As businesses increasingly commit to environmentally friendly practices, consulting on carbon emissions reduction presents a lucrative opportunity with limited competition. As a green living consultant, you can help businesses implement eco-friendly initiatives, such as developing greener office environments or sustainable manufacturing processes.


Organization consultants advise individuals and businesses on reducing red tape, clutter, and distractions to enhance operational efficiency. This area has gained importance as technology introduces new distractions and blurs the boundaries between work and personal life.

In conclusion, regardless of the size, location, or cost structure of your consulting business, your experience, resources, and confidence in helping other business owners get back on track are crucial. Everything else revolves around managing workflow and meeting client expectations.