Starting a consultancy is popular among entrepreneurs; low start up costs, significant independence and the potential for high growth means that more and more people are taking the plunge.
Why start a consultancy?
Consultants provide professional advice or services within a specific niche or area that they have relevant experience in. B2B consultancy is a fast-growing market with the number of businesses seeking professional advice increasing rapidly. The market has grown enormously online: the increase in online commercial activity, specifically marketing, means companies often work with search engine and social media consultants in order to maximise their online presence. This means there is plenty of money to be made in consulting. For many people, years of experience in a particular career lends itself well to consultancy. Workload flexibility, creative freedom and low start-up costs are also very attractive.
What skills will I need?
The most important skill is expert knowledge of your chosen niche; this must not only be theoretical knowledge but also experience in applying this knowledge commercially. You’ll be working with a diverse range of clients with very different needs and must be confident enough to advise them strategically. As a consultant, the ability to communicate effectively via a variety of mediums, and to a variety of audiences, is absolutely essential. You’ll also need to be professional, confident and – if you choose not to hire an accountant – good with figures.
Training is generally not necessary to become a consultant; you need long-standing experience in your field and on-the-job experience gained within a marketplace. This makes consultants a very diverse group of people with very different backgrounds. However, for some industries you will need qualifications begin you can practice as a consultant. This typically occurs in more tightly-regulated fields; network administrators must pass the Microsoft Certified Systems Engineer (MCSE) to work as a consultant.
Starting a consultancy can be done relatively cheaply; there are no significant assets to buy. The major costs will be marketing, as you’ll need to start finding potential clients. This is best done by networking, so print some business cards and start phoning local businesses to see who might need work done. Professionalism is essential when running a consultancy, so you also might wish to buy some new clothes, develop a good-looking logo or brand your vehicle.
Compliance and insurance
Public liability insurance and public indemnity insurance should be taken out as soon as you start consulting; you’ll be providing a lot of advice that businesses will no doubt act upon. Poor results could potentially cause bitterness. If you take on staff you’ll need employer’s liability insurance in case any action is taken against you by a current or ex-employee. There may be specialist tax issues if you provide your consultancy services through an intermediary, like a personal service company. Seek professional advice from an accountant before you start your business.
Your first step
If you’re ready to start your consultancy business, the first step is to contextualise your niche. Look at current markets and establish where you’d fit in; take a look at your professional background, qualifications, life experiences and see where these may set you up as an authority figure. If operating in a specific geographic area, ensure there is a market large enough to provide you with plenty of work. If you’re going to be working in a regulated industry, talk to a lawyer about any compliance issues that need considering.