How to start a consultancy business

Starting a consulting business is an exciting way to turn your expertise into a thriving business. You get to be your own boss, choose your clients and set your own rates – what’s not to love?

Starting a consultancy isn’t just about having knowledge, it’s about packaging it in a way that people will pay for.

From choosing your niche to setting your prices, every step matters.

This guide breaks down everything you need to know about how to start a business as a consultant, so you can skip the rookie mistakes and get straight to the good part – helping clients and making money!

Should you start a consulting business now?

Starting a consultancy in 2025 comes with both opportunities and challenges.

In the UK, the consulting industry is expected to grow to £15.7 billion in 2025, meaning now could be a great time to start your business.

In particular, businesses are investing more in digital transformation, AI and sustainability, creating a strong demand for consultants who can guide them through these changes.

Of course the path to consultancy success may not be all plain sailing. The industry is competitive and to stand out you’ll need a strong niche and a strong network of potential clients too.

To thrive, you must evolve with the market, embrace new trends, and adjust your strategies as the landscape shifts.

How to start a consulting business: step-by-step

Whether you’re an expert in marketing, finance, HR or another field, businesses are always looking for skilled professionals to help them solve problems.

Follow this step-by-step guide to set up your consulting business the right way.

1. Define your niche and value proposition

Every successful consultant has a clear niche.

Instead of being a generalist, focus on a specific industry or problem you can solve. A niche allows you to position yourself as an expert who deserves to be trusted and paid.

For example, instead of offering general marketing consulting, you might specialise in SEO for ecommerce brands or branding for tech startups.

Tips to define your niche:

• Identify your strengths and past experience – what kind of assistance are you in the strongest position to offer? Based on your background, what will clients trust you with?
• Research gaps in the market – what problems do businesses struggle with?
• Check demand by checking job boards, forums and LinkedIn posts.
• Test your niche by offering free advice to potential clients and gauging interest.

Don’t choose a niche just because it seems profitable. Pick something you genuinely enjoy and have expertise in. Clients can always see through a lack of passion or knowledge.

2. Write a business plan

A business plan is an essential document that will guide your setup process.

A business plan helps you clarify your goals, strategy and financial expectations. It’s also useful if you need funding as it showcases every element of your business to investors and is a useful tool to keep you on track, especially in the early months.

What to include:

• Your services: What will you offer and at what price?
• Target market: Who are your ideal clients? (Check out our guide to target marketing to help you work this out.)
• Marketing strategy: How will you find and attract clients?
• Financial plan: Expected income, expenses and pricing model.

3. Do your admin

When starting a consultancy, sorting out the legal and financial admin is crucial.

First, you’ll need to register your business name with HMRC and choose a business structure (you can either set up as a sole trader or limited company).

Open a separate business bank account to keep your personal and business finances distinct. This makes accounting and tax filing much easier and ensures you’re keeping everything above board.

Speaking of finances, consider setting up small business accounting software like Xero or QuickBooks to track invoices, expenses and taxes. These tools help you stay organised and comply with tax laws.

Finally, don’t overlook insurance. As a consultant, you’ll want to protect yourself against any potential risks. Professional indemnity insurance is essential to safeguard you if a client claims you made a mistake or gave bad advice.

4. Set your prices

Deciding a pricing structure is about more than just how much you want to make.

There are numerous pricing strategies you can choose. Whichever you choose, you must consider your competitors, your niche, your operations, and what you’re trying to achieve (for example, if you need to focus on customer acquistion, it may make sense to price low to start).

Most importantly, you’ll need to decide whether to charge hourly, per project, or on a retainer basis.

Each has pros and cons:

• Hourly: Good for flexibility but can limit earnings.
• Project-based: Provides clear deliverables.
• Retainer: Ensures steady income but requires ongoing commitment.

Consultants can charge an average of £50 to £300 per hour in the UK, depending on expertise and industry. Research what similar consultants charge and then set your price accordingly.

Remember, you can increase your prices as your business grows. The trick when you’re just getting started is to not overprice your services compared to your experience but equally avoid underselling your services too. It’s all about balance!

5. Market your services

Once your consulting business is all set up, it’s time to start marketing your services to attract potential clients.

To help you out, we’ve listed some of the main ways you can market your business:

Leverage your online presence

• Create a professional website using a platform such as WordPress, Wix or Squarespace. Include a portfolio, testimonials and detailed descriptions of your services. Check out our list of the easiest website builders to help you get started with minimal fuss – just bear in mind that you might want to choose a builder that lets you set up an appointment booking system on your site.
• Be active on social media platforms such as LinkedIn (a must for consultants), sharing insights, case studies and engaging with potential clients. Depending on your niche, X or Instagram can also work well.

Content marketing

• Publish helpful articles on LinkedIn or an online blog. Share your expertise on common industry challenges, case studies or solutions you’ve provided.
• Create free downloadable resources like e-books, guides or templates to showcase your expertise while gathering leads at the same time.

Network and build relationships

• Whether virtual or in person, industry events are great for meeting potential clients and establishing yourself as an expert.
• Join and contribute to forums, LinkedIn groups and professional networks relevant to your niche.

Referral program

• Offer clients a discount or bonus for referring new clients to you. Word-of-mouth can be a powerful tool, especially for consultancies.

Paid advertising

• Use targeted ads to reach businesses that need your consultancy services. LinkedIn ads are especially effective for targeting decision-makers in specific industries.

Host webinars or workshops

• These will allow you to demonstrate your knowledge and attract potential clients who value your insights.

6. Retain your clients

Setting up your consulting business and winning clients is just the beginning.

To build a sustainable consultancy business, retaining clients and continuously delivering value is essential.

Happy clients not only bring repeat business but also become your biggest advocates, providing you with referrals and testimonials that help build your reputation.

Best practices for client retention:

• Set clear expectations from day one: From the first meeting, clearly outline your services, timelines, deliverables and costs. Ensure both you and the client understand the scope of work to avoid misunderstandings later.
• Provide progress reports and measurable results: Clients want to see the impact of your work. Regularly update them on your progress, especially if you’re working on a long-term project.
• Ask for testimonials: Testimonials are one of the most powerful marketing tools for your consultancy. They serve as social proof that you deliver results. After completing a successful project, ask your client for a testimonial or a case study you can share on your website and social media, or ask them to post a review on a site like Trustpilot or Google Reviews.

What do you need to set up a consulting business?

Setting up a consulting business in the UK requires more than just expertise – you need the right tools, systems and technology to run efficiently and attract clients.

Here’s everything you’ll need to hit the ground running.

• A  registered business name (you can register as a sole trader or limited company via Companies House).
• Professional Indemnity Insurance – this will protect you against claims of bad advice or mistakes.
• A business bank account and accounting software such as Quickbooks or Xero.
• A professional website, domain and branding.
• A booking system such as Calendly, if you don’t have one built into your website.
• A CRM system to manage leads and clients such as Freshsales, Zoho CRM, or HubSpot.
• Contract and proposal software such as Bonsai or DocuSign.
• A productivity/project tracker tool such as Trello or monday.

Setting up a consultancy is about using the right tools to work smarter, market effectively and manage clients seamlessly.

How much can you expect to pay?

Starting a consultancy business in the UK can cost anywhere from £500 to £5,000.

The essentials are all relatively low-cost:

• Business registration: £50 with Companies House
• A business bank account: often free
• Professional indemnity insurance: £150-£500 per year

The cost of setting up a website can range from free to over £100 per month (if you build it yourself with a platform such as Wix or Squarespace), or over £4,000 upfront (if you hire a designer).

Branding, software subscriptions (CRM, accounting tools etc), and initial marketing efforts can add a few hundred to a few thousand pounds depending on which software you opt for and how much you have to invest.

To save money, start by using free versions of tools like HubSpot CRM, Wave for invoicing and Canva for branding. Set up a simple website yourself rather than hiring a developer.

If you need to set up an office space, why not consider using a co-working space (for example, you can find cheap coworking spaces in London for £65 to £140 per month) to help keep costs low?

The key is to invest gradually as your business grows rather than overspending upfront.

Final Thoughts

Starting a consulting business is an exciting opportunity to turn your expertise into a thriving business.

While the journey comes with challenges, such as finding clients, proving your value and managing the business side, it’s also incredibly rewarding.

With the right mindset, tools and strategy, you can build something successful on your own terms.

Stay adaptable, keep learning and take action. The best consultants don’t wait for opportunities – they create them. Now’s the time to get started!