Consulting businesses provide valuable guidance to other businesses and individuals to solve their issues and help them achieve personal and professional milestones.
Today, the consulting industry is witnessing rapid momentum in the last few years across the globe.
According to Statista, the global consulting industry was estimated to be US$ 132 billion by 2020. In the US alone, almost 2 million individuals were working within this industry.
There are plenty of startups, small businesses, and even enterprises that find it difficult to manage certain areas like marketing, security, compliance, operations, finance, etc.
Similarly, students and other individuals need someone to guide them in their careers and personal journeys. This is what a consultant can do for you.
So, if you wish to start your own consulting business, give this article a read.
Let me introduce you to the concept of a consulting business, its types, and how you can start a consulting business on your own.
What Is a Consulting Business?
A consulting business is a firm or a professional service provider that provides expert-level guidance, solutions, or advice in a given field to businesses and individuals to help them achieve their personal and professional goals.
This type of business can be a startup (like GrowthGirls and Bain & Company), an SMB (like PixelPlex and Webtronic Labs), or an enterprise (like Deloitte and PwC).
You can start a consulting business in different domains such as marketing, HR, operations, finance, engineering, healthcare, IT, legal, and so on. You can consult brands in product development, operational improvement, HR practices, corporate strategy, and marketing.
Whether a business wants to improve its overall performance, launch a product, manage the team, or more, it may seek the help of a consultant.
This brings us to this question – who is a consultant?
Based on the nature and type of a business, a consultant can help the business by employing various ways. It could be getting an overview of the company, analyzing its departments, finding out issues and the root causes, and creating a strategy to resolve those issues.
From increasing sales numbers to cutting costs and expanding the business to new markets, a consulting business can help you every step of the way. It can provide fresh insights, opinions, and solutions to help companies eliminate hurdles.
Types of Consulting Business
#1. IT Consulting Business
Also known as technology consulting, this business involves helping other companies avoid the nuisance of technology and software that can impact productivity. If a company faces related issues, you can recommend solutions that they can implement to optimize their operations and reduce risks.
Examples: Technology consultants can be software development/maintenance consultants, field technical consultants, ethical hackers, cybersecurity consultants, etc.
Criteria/Experience: IT or technology consultants must have a relevant educational background and knowledge of IT, technologies, emerging threats, software, hardware, etc.
#2. Financial Consulting Business
Financial consulting business is one of the most sought-after and beneficial forms of consulting business. Everyone these days needs to handle their finances effectively but doesn’t know where to start or what’s right. You can help businesses and individuals make better financial choices to improve their profit margins and savings while minimizing unwanted expenses.
Examples: Financial consulting can take the form of economic consulting, fundraising consulting, investment consulting, etc.
Criteria/Experience: Not anyone can become a finance advisor. This field requires a relevant educational background like a Master’s degree in Finance, a CFA or CA license, etc., which can vary from one country to another.
#3. Operations Consulting Business
The aim of this consulting business is to streamline a company’s operational efficiency so it can achieve long-term and short-term goals. To improve the operational performance, you can overview the operations of a company, perform research, and propose strategies.
Examples: HR operations consulting, production consulting, deployment consulting, sales and marketing consulting, etc.
Criteria/Experience: People with relevant educational backgrounds in business, finance, and economics are ideal for this business. You can also have experience managing the operations of multiple companies or establishing companies yourself.
#4. Strategy Consulting Business
Strategy consulting business involves dealing with a company’s directors and senior managers and helping them make better decisions.
Sometimes, business heads need someone’s help in guiding them through different aspects of business that are critical for their growth and sustenance in the market. These areas could be finance, business strategy, legalities, etc. This is where you can help them with your expertise and high-level thinking.
Example: As Strategy consulting is a broad category, you can establish your consulting business in specialties such as finance strategy consulting, business strategy consulting, etc.
Criteria/Experience: This is a high-stakes role, so this type of business requires you to hire professionals having an degree in MBA or a relevant educational background. In addition, you must carry at least 5 years of experience as a strategy consultant.
#5. HR Consulting Business
As a Human Resource (HR) consultant, you can help businesses and individuals deal with their workforce. You can guide them on how to hire good talents, streamline their onboarding, and enhance their skills through training. In addition, you can tell them effective ways to boost employee productivity and satisfaction so they become more loyal.
Examples: In HR consulting, you may narrow down your specialty and take on roles like recruitment consultant, compensation consultant, etc.
Criteria/Experience: In general, HR professionals in many countries obtain a bachelor’s or master’s degree in administration (BBA or MBA). For certain roles, companies also hire HR consultants with no relevant educational background if they have undergone courses and acquired certifications in HR.
#6. Marketing Consulting Business
Marketing consulting business is a popular form of business these days. With the internet accessible in almost every corner of the globe, marketing has become easier whether you are targeting a certain group of individuals or regions.
As a marketing consultancy, you can offer a variety of services in the form of organic or paid marketing. You can help brands grow their sales and reputation with your strategies. You can produce content pieces for them, run ads on different social media channels, and so on.
Criteria/Experience: When hiring candidates for marketing, you may look for people with a Bachelor’s degree in Marketing or relevant experience in this field. So, if you have marketing experience with proven records, you can start this business.
#7. Legal Consulting Business
Small and medium businesses often need a legal consultant to ensure the company abides by the laws prevailing in the region where it operates. You can also help them remain legal when they scale to other regions or make new strategies.
Criteria/Experience: As a legal consultant, you must have a business law degree. Having experience in legal consulting is also desirable to ensure your clients always adhere to applicable laws. For this, you must also possess a deeper knowledge of the legalities of different regions and countries, greater focus, and research capabilities to offer the best solution.
#8. Compliance Consulting Business
This is similar to legal consulting. With increasing data privacy concerns worldwide, every business today must comply with local and federal laws. It will help them avoid penalties and loss of reputation. This is where compliance consultants come in to rescue businesses.
Criteria/Experience: You will require a Bachelor’s degree in law or business administration if you want to do compliance consulting. It also needs to related fields to have the sheer knowledge of laws and regulations of different countries and regions.
#9. Social Media Consulting Business
Social media marketing is a form of marketing that leverages the power of social media to fuel a company’s marketing efforts. It aims to increase a company’s reach by creating a buzz for its products on various social media platforms like Instagram, and Facebook (Meta), etc., that people now use heavily.
We are talking about this consulting business separately because it’s probably one of the most effective and widely used forms of marketing at present.
Criteria/Experience: Having experience in this field is more helpful than just a plain degree. You must know how to use different social media platforms to their full advantage and craft strategies to help the brands grow on them.
#10. Sales Consulting Business
In this type of consulting business, you can use your extraordinary sales skills to enhance the sales numbers and revenue of a company. You can analyze the sales figures, history, and other aspects of business that can influence sales and help optimize their efforts with your strategies.
Apart from customers, you can make strategies for employees. You can advise companies so they can empower their sales team by listening to their issues, resolving them, giving them advanced tools for productivity, and rewarding them for achievements.
Experience: Skills, experience, and the art of communication are way above any degree in the field of sales. You must also have a zeal to achieve targets and be proactive at handling customers.
Apart from the above, there are many other types of consulting businesses – Fitness and wellness consultants, sustainability consultants, growth hacking consultants, career consultants, design consultants, product development consultants, leadership consultants, SEO consultants, PR consultants, and more.
Pros and Cons of Consulting Business
Fewer investments: You can start a consulting business with fewer investments. The best thing is you don’t even need to set up a dedicated infrastructure necessarily.
Flexibility: The consulting offers the flexibility of how you want to run your business in terms of work, location, infrastructure, type of business you want to deal with, expenditure, etc.
Greater profit margins: A consulting business can yield higher profit margins if you invest your time and effort in the right direction.
Easily scalable: A consulting business is easily scalable. You can work as an independent consultant initially and then hire other consultants along the way as you grow.
Authority and experience: A consulting business will give you many opportunities to meet new people and conduct business with them. The more projects you work on, the more experience you will gain.
No benefits: You won’t get benefits like health insurance and other allowances like employees get. You will need to take care of your insurance, pension plans, and other schemes to support your life ahead.
Inconsistent work and income: The number of projects you will work on will fluctuate, and so will your income.
High competition: Consulting businesses have become highly competitive. So, you will need to stand out in the crowd within your industry by offering exceptional work.
Time management: Initially, you will be the one managing everything, finding clients, working for them, managing invoices, taking care of finances, resolving issues, checking performance, etc.
Steps to Launch Your Consulting Business
#1. Self Assessment
To start your own consulting business, you must access your skills, knowledge, strengths, ideas, and more. You can also enhance your knowledge by taking management courses and gaining the required skills and certifications.
For example, if you have experience or knowledge in marketing, starting a marketing consulting business will be good.
In addition, for any consulting business you choose, there are some common skills that you must have – communication skills, client handling skills, team handling skills, brainstorming ideas, SEO skills, and more.
#2. Choose a Business Model
The business model is a crucial part of every business. While choosing a perfect business model, you ensure you have a full understanding of the emerging markets and strategies you need to implement.
Your business model includes a summary of your mission and vision, an overview of your consulting company, a list of industries that you target, a plan for your marketing strategies, the team you need, and more. In addition, you will be required to decide whether you want to start solo, register as a Limited Liability Company (LLC), or go with a Private Limited.
#3. Research Thoroughly
Market changes over time, and therefore, you need to research the current market efficiently to start your consulting business. It also helps you understand how much effort you can give to attract potential clients.
While giving consultation, you need to investigate where the problem lies, perform research, understand the client’s expectations, and make a suitable plan.
#4. Financial Planning
You need to plan your finances wisely, from investing the money to achieving monetary goals. This will help you manage future risks, debt problems, spending, savings, etc. Additionally, it allows you to visualize your current financial status and forecast future finances.
#5. Tax and Legal Compliances
Before starting your consulting business, you must know the current tax rules and regulations in your country. It also depends upon the business types you choose. In addition, you must check the licenses you need for permission to open a business legally in a given region.
#6. Set Up SOPs
Before inviting any client, you need to set up Standard Operating Procedures (SOPs) and a pricing model so that your client knows beforehand what you can offer at what price.
If you set up SOPs correctly, your clients will know you follow the same procedure to deliver consistent results.
#7. Get an Office Setup
You need an office for running your business – it could be a home office to run your business remotely or in a dedicated building. To do this, you need to estimate the required area depending on the size of your company, include some amenities, consider the budget, and your office structure is ready.
#8. Secure Funding
You require a strong business plan, a clear overview of what you do in your business, an analysis of current market competition, and more. If you invest your funds using your personal savings, loans, credit cards, and fixed bonds, you must secure these funds with the right approach toward your goals.
Furthermore, you can raise funds by asking people across the world to donate or take help from investors by showing your clear path to success.
#9. Develop Brand Identity
Developing a brand identity is an essential approach to attracting potential clients. To develop, you need various marketing materials like business accounts on social media, business logos, personal websites, promotions or ads, and more.
A brand identity gives proof of your existence. It leaves a great impression on the clients for a long time. This means your clients save a picture of your brand in their head and will return when they need you again.
#10. Scale Up
Now, everything is set, so you are ready to start your consulting business. Next, work on scaling your business by growing your team, bringing clients from across the world, and learning along the way. Focus on giving the best consultations and consistently develop your skills to keep on attracting prospective clients.
The consulting business is growing rapidly, and businesses, especially SMBs, require expert advice on a particular field to achieve more success. If you have consulting experience or education qualifications like B.Tech, MBA, etc., you can start a consulting business in that niche and follow the points I have made above to grow.
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