How to Start a Small Consulting Business

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Opening a small consultation business allows you to help others who may be struggling, not to mention helps you earn money in the process. Many advantages exist for starting a consultation practice: you get to set your own working hours and service fees to earn a decent income. In addition, you can offer your consulting services primarily from home should you choose to do so.

Things You'll Need

  • Consulting business plan
  • Business license
  • Consulting office space
  • Website

Decide what type of consulting business you want to start. Think about your qualifications. Define your areas of expertise, experience in a field and educational degrees or qualifications you have earned. Identify knowledge gaps and the topics about which you should learn and stay updated in your field.

Earn a certification in your consulting area, if any exist. The specific certification you earn depends on your industry, how competitive you want to be and your qualifications for earning a certificate. For example, the Certified Public Accountant (CPA) exam for tax and accounting consultants typically requires a bachelor's degree. Some fund-raising consultants earn a certification through the National Society of Fund Raising Executives. IT and networking consultants can earn numerous hardware and software certifications, such as Microsoft Certified Systems Engineer (MCSE).

Identify a niche market for your consulting services. Think about the type of client for which you want to provide services. Make a criterion list of characteristics and attributes you want your clients to meet. For example, small IT consultants might only want to consult with businesses and organizations with less than 100 employees. A professional business consultant might focus only on small business clients or large corporate ones. Choosing a niche target market helps you narrow down a list of possible clients and allows you to specialize your services.

Decide on the services you want to offer in your consulting business. Ask yourself whether you want to primarily offer advice and one-on-one consultations for clients or whether you'll actually perform services after you determine the client's needs. In other words, will you actively troubleshoot, fix problems and implement solutions or will you simply provide expert advice to clients on how to solve them? Make a list of each service you plan to offer.

Set fees for consultation services. Research fees for similar consultants and service providers in your local or regional area. Think about how much time you'll spend with your average client providing advice, solving problems and helping implement solutions. Set your rates and fees based on this factor, the competition in your area and your professional qualifications to consult.

Write a comprehensive business plan. Business plans guide you through the setup of your business and provide a map for success. Write sections in your business plan for each of the services you plan to provide, descriptions of each service, your competition and how your business will be different. Devote a section to start-up costs and how much you'll need for marketing and advertising, as well as what equipment, if any, you'll need to get started.

Obtain business licenses. Call state and local authorities to determine the exact business and tax licenses you'll need. Register the name of your business and its structure (e.g., sole proprietorship or limited liability company) with your state. Fill out all paperwork and pay any fees, as required.

Set up your office space. Many small consulting businesses can be set up from a home office, especially since consultants often meet clients on-site at the clients' own place of business or residence. Seek out retail office space if you need additional room or a larger atmosphere in which to meet clients.

Begin marketing your consulting business. Purchase targeted mailing lists and begin a direct-mail campaign that includes sending postcards or even brochures to potential clients. Purchase advertisements in newspapers and other local advertising programs. Create a website that outlines who you are, your qualifications and a list of consulting services you offer. Set up a lead-capture page on your website to gather email addresses of potential clients and offer a free newsletter. Start a blog, writing about topic areas of importance to clients. Take advantage of social networking sites like Facebook or Twitter to connect with clients and capture their attention.

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