How to Start Your Own Consulting Business
What do you need to start a consulting business? How do you find clients? How do you sell and market yourself?
I spent 15 years in financial services, working my way up from the floor of an options exchange into selling market data and trading systems. I have a unique consulting background. I’ve worked as an employee for 3 of the 5 big consulting firms, and I’ve done project work for many mid-tier firms. I’ve also owned my own firm so I have a 360° view of consulting.
I work a lot on the strategy side, so I ask questions like: what do you want to do? Why would somebody give you money? What pain point can you solve? What I find is that people come out of big brands very confident in their skill set; however, they’re not confident in their market value once they don’t have a big brand behind them. So what I do is help entrepreneurs get out of their own way by helping them to move forward and make progress.
It’s All About Execution
Ideas are worth nothing; it’s all about execution. You might be tempted to keep your ideas private, but when you’re selling consulting services, people are buying you. Why would people pick you out of five other people? They pick you because they like you. You’re selling you, yourself, and your expertise.
What’s Your Fast Path to The Cash?: How to Cut Costs
There’s one question I always ask someone starting a business: what’s your fast path to the cash? Whats a pain point you can solve that’s not too time consuming? How can you get in there, get paid, and build the foundation for a relationship? Think of a taxi cab: the meter is running when you’re starting your business. Most of us don’t have the time or cash, so think fast and think gap analysis. A great way to get into consulting is to deliver quick results and gain insight into the company.
Look at your overhead. You should know how much you’re charging and how much you’ll have to sell in a year. This gets you thinking like a business person. All a solo consultant needs is a short plan that encompasses the product, value proposition, client base, and marketing tactics. The easy part is after you sign the contract for a client. The complicated, overwhelming part is the business development work. Before, you might be selling a product, but now you’re selling you.
There are a lot of resources available. You can find mentors, go to video libraries, hire a coach, sign up for programs. Don’t assume that you know everything. Work with someone who’s done this before. My best referral sources are those that do similar or identical things as me. Collaboration is the new black; don’t go the competition route because you might end up feeding each other.
Don’t overthink the website. You need some kind of online property, but it doesn’t have to be fancy. Do you need social media? Depending on your business, you might need a robust profile on LinkedIn. One thing I want to stress as a solo consultant is that you need to think of yourself as a thought leader.
You need to be a publisher and you need something out there for people to look at. Social proof is more valuable than what you say about yourself. Getting other people — clients, former bosses, etc. — is extremely important. Other social media is nice to have, but not necessary.
Everyone does something at-cost or even free to get the initial testimonials, which they later leverage to build a business. Don’t be afraid to be flexible in order to get traction in the beginning. Think about it as getting paid to learn. We all do it.
Always Be Marketing To Your Next Clients
The biggest problem as a small business owner is, when you have a client, you tend to slack on your marketing efforts. What you have to do is commit to marketing even if you’re busy with a client.
Don’t fall into the trap where you neglect your marketing and, later when you’re done with a project, realize you don’t have a next client. Get into the habit of asking for a referral: you should ask for a testimony and a referral immediately after working with a client.
You might want to embrace the idea of a job portfolio, especially at the beginning. You could register with other resource companies that staff interim people. If you’re worried about money, you’re not making smart business decisions. Having an alternate revenue stream — whether it through partnering up or picking up other business’ fall-off — gives you a bigger runway for you business to take off.
Go Narrow Vs. Wide-Cherry Picking Your Clients
If you can build your business on the side while still getting a full-time paycheck — do that as long as you can. It’ll be exhausting, true. There will be trade-offs, but that can take away some of the pressure. Then you’ll have the ability to cherry pick your clients and fine tune your marketing message. Just be aware that some big companies contractually prohibit you from doing outside work without permission.
Go narrow versus wide. You might think you’re losing clients with a narrow niche, but you’re actually saving your sanity and your time. The most exhausting thing for marketing as a solo professional is to try to be everything to everybody. However, if you get really specific, you’ll know how to market yourself and how to get out there. Jealously guard your time because there are opportunity costs. If you get exhausted by doing everything, your message will be diluted; but if you focus your marketing to one person in one specific situation, that person will feel heard. That’s what will make your business successful.
Helpful Technology for Small Business Owners
There’s a lot of helpful technology for small business owners. Find out what other people using. For example, I use an automated calendar which eliminated problems with time zones and double booking. I recommend being hands on with your calendar by putting constraints and keeping yourself busy.
If you’ve been in business for a while, you might need a fresh perspective. Don’t be afraid to hire an extra set of eyes or call in a favor. In a half hour, they can find solutions that you’ve been struggling to find for 2 months. I’ve both received and given great help to entrepreneurs in different industries.
You need to know yourself: if you’re not the kind of person who can work alone all the time, you should reach out to others. If you’re a natural extrovert, work in a coworking space. Even if you have your own physical space, you can book virtual lunches to keep that touch point. You need support. And don’t be afraid to admit you’re struggling because other people are struggling too.
As entrepreneurs, we tend to be excited and completely engaged with whatever we’re creating. After the launch, when it’s time to market and continue pitching, it can feel like a grind. Beware of distractions. Don’t just embrace the next new thing. Sometimes, we need to refocus and double down with what we’re currently doing. Focus on the intersection of what you want to do and what people need, want, and are willing to pay for.