How to Start a Financial Consultant Business

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With cash flow a problem for most new entrepreneurs, starting a service business is an affordable alternative to traditional retail establishments. With low start-up costs and no need to purchase expensive inventory, service-based businesses are a great way to share your skills and make a living. If you have experience in the finance or accounting industries, one great option to consider is financial consulting. Consultants help individuals and businesses with services ranging from investment to filing taxes, and enjoy more flexibility than employees who are working directly for a firm.

Get familiar with your area's tax codes. This includes income, payroll, sales and other applicable taxes. Tax rates and filing practices are one of the main subjects that people seek help with, and your knowledge of this subject, will help you with all areas of financial consulting.

Learn basic accounting principles. Knowing how GAAP -- Generally Accepted Accounting Principles -- works will help you with a large variety of financial decisions, especially when directing investments or helping companies develop financial tracking systems.

Consider becoming certified in some area of finance. This could include getting an investor's or trader's license, an MBA or becoming certified as an accountant. Any of these types of credentials will help boost your reputation and draw clients to your business.

Contact former colleagues and area businesses. Financial consultants often find their first clients through people they know and secure later clients via word-of mouth advertising. In the financial world, traditional marketing techniques won't work, as people need to feel like they can trust their consultant with their money and private information.

Obtain a business license from your state department or local chamber of commerce. Some financial firms may also require additional permits depending on the state they are operating in.

Decide if you will need a business loan. If you do, you'll need to draft a business plan and present it to your bank for review. Even if you won't need a loan, a business plan can help you see what areas you may need to put more work in to make your company a success.

Tips & Warnings

  • In the finance industry, your reputation is your most important asset. Follow standard industry practices and operate your business with a strong sense of ethics or you will lose your customers and have trouble finding new ones.

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