How to start a consultancy business
Could you make a living helping other entrepreneurs start and grow their businesses? Read our guide to launching a consultancy firm here...
- What type of entrepreneur is consultancy suited to?
- Market research
- Getting your business started
- Tips for business success
- Test your business idea (opens in a new tab)
- Register a company (opens in a new tab)
- Apply for a business loan (opens in a new tab)
Whether you come to the decision yourself or you’re forced into it by circumstances, starting your own business involves a lot of complex preparations and a great deal of strategic thought. For many, finding the right business idea or opportunity is the first and biggest challenge.
Action point: Could a loan help you to start a business? See how we may be able to help here and here
But often you needn’t look further than your CV. Your professional experience, knowledge and specialist understanding can constitute a business opportunity with significant potential in its own right.
Not only can becoming a ‘knowledge worker’ – that’s a consultant, to you and me – mean the chance to earn a far better living than being someone else’s employee, it can enable you to establish a thriving business with real capital value.
And the great thing about becoming a consultant is the low entry cost. It needn’t involve an outlay of precious savings or expensive borrowings, which makes the risk much more manageable.
What type of entrepreneur is consultancy suited to?
There are three simple steps to understanding what’s involved and deciding whether consultancy is the right start-up opportunity for you. They are: know your product; know your market; and know your skills.
Know your product
First of all, you need to audit your knowledge, skills, experience and expertise. What have you learned in your career that you can sell to others? Do you really have a wealth of knowledge, accumulated over decades working in ever more demanding environments, or do you simply have the same couple of years’ experience repeated many times over?
The simplest way to find out is to review your CV and list all the projects you’ve undertaken over the years: what you did, the outcome, and what you learned. Summarise this into a set of areas where you can provide useful and powerful insights to others. That is the product you have to offer.
Consultancy requires a wide variety of personal attributes that will make a real difference to your success. These are self-motivation, good inter-personal skills and confidence.
In start-up mode, you must be able to work alone and motivate yourself. Even getting up in the morning will be a challenge if your only incentive is your self-will! For many, the fact it’s your own business you’re getting up for is motivation enough.
But working alone demands more than just the skill to self-start. It also requires the ability to be comfortable in your own company and not feel isolated or lonely. Many projects offer little human contact for days on end. If co-workers’ banter is vital to your happiness, consultancy may not be the right choice.
Good inter-personal skills
You will also need strong inter-personal skills. Some consultants’ skills are so specialist, and in such demand, that they can get away with behaving like operatic divas. Under certain circumstances, these characters can achieve significant success. But in most cases their consultancies flounder.
The fact is, clients expect to be treated with respect. They know they are the paymasters, and they like you to acknowledge this fact in your dealings with them, just as they do with their clients. They may ask you to provide them with powerful insights, innovations or other interventions in relation to business help and advice, but they also expect you to do so with sensitivity.
“What have you learned in your career that you can sell to others?”
Saving their face while at the same time telling them they need to change is a skill requiring empathy and finesse. Clients rarely want this delivered via the sledgehammer of the unvarnished truth, even if they say they do.
You will need to balance these inter-personal skills with bucketloads of self-confidence. Your clients are buying your expertise. If you come over as unsure of the value of your experience, they won’t buy from you. At the same time, you need to contain this self-confidence on the right side of the boundaries of arrogance, otherwise you’ll end up back in the land of the divas.
In the early stages, you may have to fake some of this confidence. After all, if this is the first time you’ve encountered a particular combination of circumstances as a consultant, you’re likely to be a little uncertain of your skills. Just convince yourself that if you’re unsure, the client is even more unsure. Keep reassuring them (and yourself) it’ll all be fine, even if you can see how easily it could all fall apart. Chances are, it’ll be fine anyway.
Know your market
It’s one thing having a long list of knowledge areas you’re confident you can provide to others. The real question is, are they valued by the marketplace? Are you offering skills in the next big thing, or the last big flop? To successfully make this assessment you need to understand what’s going on in the world around you. Ideally you want the skills you’re offering to match a growing area of demand, where they will be in short supply and the competitive environment is at least manageable.
Ready to get started? Find out everything you need to know about how to start your own business here.