How to Start a Consulting Business

You know, in business, timing is everything, right? 

Well, if you’re thinking about starting a consulting business, congratulations. 

Because yours is perfect. 

A recent Forbes report showed the consultancy industry was worth $100 billion in 2020 and expected to increase by 80% yearly for the next few years.

But timing is one thing; being ready to take advantage of it is another.

You must be like a Heron, ready to strike without delay when an opportunity presents itself. 

To ensure you are, continue reading and learn how to start a consulting business before it’s too late!

1) Identify Your Area of Expertise

Okay, the timing is perfect, and the demand is there, but neither is worth a dime if you don’t know your area of expertise.

Traditionally, consultants are experienced experts in their chosen field. If that description fits your profile, then you’re ready to find your niche and audience. However, if it doesn’t, don’t worry, because we no longer live in a traditional world – now there’s an alternative approach. 

As a consultant, your job is to take someone from a current state to their desired state through your advice. As long as you can do that, you’re in business. 


Start by evaluating your skills, knowledge, strengths, and passions to find a sweet spot – an area where you can provide value.

What industries do you know?

List any industries you’ve worked or have an interest in. Are there areas that you’re exceptionally skilled at, or niches that fascinate you? 

You’re looking for anything you could advise on. It might be a solution to a problem you’ve had to overcome; odds are if you experienced it, so will someone else.   

What skills do you have?

Consider your skill set and talents. Do any of them relate to the industries you know? Are you talented at something that you could master in a short period? Are there any subjects you’ve always wanted to try? If so, could you use them as a consultant? 


Your goal is to become an expert and in an area that causes people a specific problem so that you can help them overcome it. As long as there’s a demand, and you can provide value by solving the problem, people will pay you for your consulting services. 

Once you’ve chosen an area of consulting, for example, fitness training, you have to find your niche.

Let me explain:

2) Define Your Niche and Audience

To become a successful consultant you have to identify and target a specific niche.

Information is easily accessible and often consumed for free by the general public. Your aim is to become an absolute authority in your niche. Only then people will happily pay top dollar for your advice. And it’s not about knowing everything; it’s about solving one specific problem for a particular demographic of society. 

Using our fitness training example, your niche could be fitness for people over the age of 60, or a specific fitness goal, such as losing 50 pounds in six months, or training for individuals with physical disabilities.

A useful strategy is to consider your markets’ needs and desires and what advice those people need. 

Assess your target audience’s age, pain points, likes, and dislikes. What are their main challenges? What are questions regularly asked by these people in online forums or Facebook groups? 

It’s only by getting to know your audience that you can define your niche.

Next, make yourself unique:

3) Nail Down Your UVP (Unique Value Proposition)

A UVP is more than a product or service you offer to a customer; it’s a promise you agree to deliver on, a unique ingredient that only you can provide.

Your value proposition is the primary reason a client will trust you and will ensure that they won’t seek out other advice. Your UVP can come from personal experience or from specific training you’ve taken.

How you find your UVP isn’t crucially important. The main focus is that it helps your clients overcome a specific challenge they’re facing and that you’re the only consultant offering it.

Once you’ve identified your UVP, you need to tell prospective clients all about it. 

How to write a UVP: 

  • Relevancy: Identify and explain how your service will help clients transition from a current state to the desired state.
  • Quantify your value: Describe any specific benefits your service will provide.
  • Identification: Identify your client’s main pain points.
  • Connection: Then connect your value to your client’s problem.

So, what are you worth? Let’s find out:

4) Define Your Packages and Prices

One of the bonuses of being a self-employed consultant is setting your own rates. While this sounds great, it often leaves those new to consulting scratching their heads regarding what to charge. 

If you’re too expensive compared to your competitors, it will be hard to land clients. Too cheap, and you’ll undermine your perceived value and leave potential clients questioning your professionalism and legitimacy.

You can solve this by auditing your competitors’ services and rates – also called competitive analysis. The results will provide a price range you can work from and an insight into precisely what the competition is offering. Once you establish prices that meet your requirements, you can incorporate them into any packages you’ll be offering, and focus on applying your UVP to differentiate yourself from the competition.  

Traditionally, consultants charge for their services in three ways:

  • Hourly rate: A flat rate based on your service and expertise, where clients pay for the hours you work. A popular early approach, however, make sure you don’t undersell yourself by charging too little. Also, expect clients to question your hours if you run over the pre-agreed time.
  • Project rate: A project rate is a pre-agreed fixed price for a specific project. While clients generally prefer the transparency a project rate provides, it can limit your flexibility when issues arise and projects take longer to complete than estimated. However, judge it correctly, and you can earn a considerably higher hourly rate than clients might otherwise agree to.
  • Retainer: An agreement between you and a client for an ongoing service, where you’re paid a recurring rate, usually monthly, for an agreed amount of work. It’s always good to have one or two retainers as it provides security – especially when first starting out. 

Now you’re ready to get legal:

5) Set Up Your Business

Before you receive official payment as a consultant, you’re required to register your business as a legal entity. You will need a business name or a DBA (doing business as) to start.

You’ll also need to obtain any required licenses and permits, prepare policy statements and contracts (more on those later), get adequate insurance, and, if needed, deal with hiring employees.

Registering your business name:

Start by checking your chosen name’s available by conducting a “Business entity name search” on your Secretary of State website, followed by a federal trademark search on the  United States Patent & Trademark Office website. And to secure your name for your website, run a free domain name search.

Registering as a legal entity:

Your options are a sole proprietorship, partnership, LLC (limited liability company), or corporation.

  • Sole proprietorship: The most basic business entity, and the easiest to set up. As a sole proprietorship, you’ll be entirely responsible for business profits and losses.
  • Partnership: Similar to a sole proprietorship, but with responsibility and liability shared between two or more people. 
  • Limited liability company (LLC):  A business structure that removes all personal liabilities from the owners, partners, or shareholders, but provides tax advantages and flexibility benefits.
  • Corporation: A separate legal entity to the shareholders. A corporation can own property, be held liable, pay taxes, and enter contracts. The shareholders can take wages in dividends and shares while avoiding any personal liabilities. 

Obtain any licenses that you might need: 

The excellent news is consultants are not required by law to have a license or a certificate to trade. However, depending upon your niche, clients will expect you to have the necessary qualifications before they’ll do business with you. 

For example, an accountancy consultant would need an accountancy certification within their state. And a business consultant might need a Bachelor’s degree or an MBA.


The easiest way for you to start trading is as a sole proprietorship. All you do is register your business name or a DBA (doing business as) if trading under a separate name to your own. However, it’s advisable to obtain an EIN (employer identification number – can be done online at the IRS website).

Once legal, you’re ready to start marketing:

6) Develop Your Marketing Funnel

As a consultant, you’re continuously trying to attract new clients. An excellent way of doing that is by using a repeatable system – in other words, a marketing funnel.

A marketing funnel is a breakdown of your client’s journey, from first becoming aware of your business (for example, Facebook ads), to the point at which they hire you as their consultant. An effective funnel will also include post-purchase cross and up-sells, all serving to increase client retention.

As it’s a rinse and repeat system, you can scale up as your advertising budget increases. 

Always promote word of mouth marketing (WOMM)

Perfect sales funnels and ad budgets are excellent, but the best advertising is when clients recommend you to friends, family, and groups on social media. A recent Review 42 survey showed that 74% of consumers said word of mouth was a key influencer in their purchasing decisions. 

There are two types of WOMM:

  • Organic: Organic WOM happens naturally when people refer you because they are happy with your service.
  • Amplified: Amplified WOM happens when you launch campaigns designed to encourage WOM in your existing or new communities.

Some proven ways of encouraging word-of-mouth marketing are:

    • Customer loyalty program:
      Provide clients with a reward for using your business, such as a second consultancy project discount. When clients feel valued, they’re far more inclined to recommend your service. 
  • Create a buzz on social media:
    Social media provides you with a vast opportunity concerning WOMM. Ensure you’re active on as many platforms as possible and engage with communities related to your niche. People use the “Facebook feature” to look for recommendations from fellow users – position yourself so that they’ll recommend you.
    Influencers also contribute powerfully to WOM; consider providing one with a free consultation. In return, they’ll share you with their community. 
  • Provide an excellent first experience:
    Clients will refer you if they enjoyed working with you and are happy to share their experiences with friends and family. 

To market successfully, you need a digital hub, and that’s your website:

7) Create your Website

There are numerous reasons why you need a website; here’s what Bill Gates had to say about it:

“If your business is not on the internet, then your business will be out of business.”

Of course, he’s right; however, this is quite a general statement. Let’s dig a little deeper:

  • Credibility: It’s unlikely you’ll be the only consultant within your niche, but having a professional-looking website filled with positive testimonials will create trust and credibility. 
  • Traffic: Over 92% of web traffic is search engine driven, and 80% of consumers say they review companies online before making a buying decision.   
  • A digital hub: Your website can drive leads from numerous marketing platforms, such as social media and email campaigns, which you can then run through your funnel and convert into clients.

But websites need certain design elements to convert visitors into clients.

Such as:

  • A clean UX: UX stands for user experience and directly affects your SEO (search engine optimization) rankings and conversion rates. Its purpose is to provide users with a seamless journey from landing page to check out.
  • CTAs: Your call to action should be well designed so that visitors can see what you want them to do upon arriving on your website, such as leaving an email address.
  • Opt-ins: Opt-ins are an inbound marketing approach where you solicit a potential customer’s email address and permission to send them promotional material. 
  • Testimonials: Qualtrics XM blog statistics tell us that 93% of consumers read online reviews before purchasing. By placing testimonials on your homepage, you’ll show prospective clients that they can trust you to solve their problems.

OK, you’re almost ready, but before you begin, you need the right systems:

8) Get Your Systems In Place

Having the correct systems in place will help you run an efficient consulting business. This will enable you to make decisions based on proven statistics and present yourself as a true professional within your niche. 

But unlike other sectors, consultancy firms require a varied range of software systems to ensure they provide optimal results 100% of the time.

Essential software: 

CRM Software: 

CRM stands for customer relationship management, and as the name suggests, it’s a system for managing your relationships with your customers. 

It’s essential for consultants as you have a wide range of different clients. A CRM will enable you to keep records of their information so they’re always at hand. It will also allow you to perform an in-depth analysis of your clients and interactions.

Proposal Software:

Proposal software enables you to streamline your proposal process. This makes engaging clients by using templates for increased speed, automation for ease of use, and visibility in the way of knowing when a proposal has been accepted and signed more straightforward.

Project Management Software:

Project management software helps you collaborate in real-time with teams on multiple projects and stay informed on performance and progress using customizable reports.

Billing and Invoicing Software:

Billing and invoice software can help you keep your accounting up-to-date, such as collecting client payments when they’re due, using numerous payment methods (such as Venmo and PayPal), and converting fees into international currencies.

Your final step is creating business for yourself. Let’s find out how to do it:

9) Land Your First Client

With systems in place, you’re ready to land your first clients, so what next?

Unfortunately, clients don’t suddenly appear. 

In the beginning, the most crucial step is knowing how to promote and grow your business. Now you have to become a marketer and market your skills and services, be a confident professional, and articulate your value and credibility to potential clients.

To gain confidence and test your system, you can generate your first client through your professional and social networks. After all, clients regularly use networks and word of mouth to select consultants. 

But of course, you’re going to need more than your address book to flourish. 

Your focus should be on attaining your 4th, 5th, and 6th clients.

Follow these steps to make that happen: 

  1. Create and memorize your elevator pitch: For a client to invest in your service, you must fully understand how to sell yourself and believe in what you’re selling. 
  2. Offer value and results over price: Be there to serve your clients. If you want people to gravitate toward your business, put people before profit.
  3. Research your industry: Research your competition, join forums and professional sites like LinkedIn. Study what is being said and start contributing. Share your knowledge and expertise. Get in the flow of your industry and become it even if you haven’t landed your first client yet. 
  4. Understand precisely how to sell your service: Every sales market requires a tailored approach, and your niche has a particular type of client with a unique need. To sell to them you must first know where to find, attract, and engage them. 

Create and implement your marketing strategy: By actively marketing yourself in places where prospective clients can see you, you’ll create familiarity, which builds trust. But more importantly, you’ll add urgency and positivity to your mindset.

Time to Take Action

Now you know the steps you must take for turning your dream of becoming a consultant into a thriving reality.

Take each step one at a time, perfecting them as you go.

By doing so, you’ll position yourself to take full advantage of the opportunity at hand.

You’ll be ready to strike without thought.

Good luck!

About the author

Terry O' Toole
+ posts
Terry O'Toole is a freelance writer, scuba instructor, and serial entrepreneur who spends most of his life sailing from one country to another, starting businesses as he goes. He has no plans to stop and believes we're here to live our dreams and fulfill our potential and tries to inspire and help others to believe it too. When not doing that, you'll find him kicking back on his boat, perfecting the art of Wu Wei.
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