How to Start a Consultancy Business

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How to Start a Consultancy Business

It is a great idea for a business start up in these economically challenging times to sell your own knowledge and expertise as a consultant. Independent consulting is one of the fastest growing and most profitable business models around. More and more people are enjoying the independence and extra money it brings as well as the change in the quality of life through being in control of what you do and with whom you work.

People who earn their living through what they know or ‘knowledge professionals’ are becoming increasingly dissatisfied with the corporate or employed environment they commonly occupy and find freelance or contract consultancy to be a rewarding change or additional career option. It is possible to continue working on your knowledge and expertise without all the bureaucracy of company or organizational employment and the unpleasantness of climbing the company’s greasy pole of ‘advancement’. Also, those who prefer not to operate full-time find they can grow in their skills, knowledge and ability while employed and can work from their home and in their own time.

The consulting business has grown exponentially for almost three decades now as individuals have become an indispensable part of the economy. As businesses work to change in ever-new commercial environments technologies it is very difficult for them to keep pace so those with specialist knowledge in particular areas of business are finding they are in increasing demand. organizations are relying on consultants.

So, what is a Consultant?
A consultant is someone who offers help to someone or a business trying to solve a problem. Consultants work in a specific field of knowledge and provide expert knowledge to help solve problems. This will be a field that you are most familiar with.

In theory almost anyone can be a consultant – as long as you have what a client wants. This usually means skill and knowledge to solve a problem. It is not necessary to be the world’s leading expert in a particular field. Nor do you need to have been in the same line of business yourself, nor any other kind.

Among other things you will need to be able to ‘sell yourself’, and have a very good appreciation and understanding of how to solve the problem that needs to be solved. This is normally good knowledge combined with experience and good communication skills.

Take a look at what you are knowledgeable about. Look at what particular ‘problems’ other people – particularly employers you’ve had – what problems have they employed you to deal with? You may have worked for years in a particular area of knowledge and you may have special education training in this. So if you’ve worked in recruitment, or in managing events, or in training other people or have knowledge about a very specific aspect of business process or have a particular talent with financial or legal issues, then you certainly will have the kinds of knowledge that would be ‘bought in’ by clients. But there are lots of other areas of knowledge too that require consultants such as gardening and horticulture, education, farming, health and safety, marketing. In fact, it is possible to be a consultant in anything so long as you have the knowledge that a client wants and can solve their problem.

Some consultants require qualifications in their field to be seen as sufficiently skilled by certain trades and industries. For example, Engineers, computer programmers, fund raisers and sports professionals (among many others) are often required to have certain degrees and diplomas recognized by their professions as guaranteeing the necessary minimum standard of skill and expertise.

Select something which you know about and something which you like. Can you communicate the benefits of your skills to a lay person? Can you write about what you know in a way that is easy for a person to understand? Can you explain how your knowledge and skill could solve a problem. These are all essential talents you will need to have in addition to the basic knowledge of the area in which you are offering expertise.

Steps

Here are some steps that you’ll need to take to set up your consultancy

Define your market- Before you do anything else. Who is it you are selling your consultancy and knowledge to and what do they want? Everything else rests on this. There is no point in doing anything until you can answer these questions. Where are the people you will be selling to and how do you know what it is they want. My point is this: however clever or knowledgeable you are about something is no guarantee that someone will pay you for it. So find out what they want first (related to your area of expertise of course) then go from there. This goes whether you are setting up as a sole trader or with others to create accompany. A mistake that many make is that they feel they are good at something and that the world owes them a living. Lots of businesses of all kinds go down the tubes for this reason. They invent or create a product and then look for someone to buy it. No! Look for something that people want then go away and create it!

Plan- Once you have answered the above question, prepare your business plan. A business plan will help you work through your vision and strategy for keeping the business working. What is the rationale that your business can succeed? Provide evidence! What exactly are your products and services (you may have a main one but develop other ‘back end products too) What is it that you want to achieve by when. How much do you want to make be when. Be realistic and bold. What is your evidence that this figure can be reached. How are you going to market? What is your financial plan? Do you need to borrow? How will you convince lenders? There are lots more things that should should be in a plan and each of these needs to be unpacked and detailed. Brainstorm these, then start putting them to a time-line.

Make a space to work- Where are you going to work from? Many sole traders start from home. This is a good idea as it keeps overheads down. But if you do this make sure you inform the insurers of your house as turning your home into a workplace without telling them will render your insurance null and void. Choose a space in your home that is comfortable and warm. Obviously you’ll need phone access, internet access, a place for your computer, files and books (consultants always have lots of books).

You may want to read some more articles at my website.

What about marketing?

If you don’t have clients or customers then you don’t have a business. Usually, it pays to ensure that you have some before you leave your paid employment. The next thing to do is to inform them that you are ready and available for work.

Your marketing should narrow in on you being the expert that people need to solve their problems. A good way to do this is publish a few articles on the internet with links to your site (you must have a site!) which answers a question related to your field (you could go to Answers.Yahoo.com and look for a question to answer. Show your practical value to your potential customers. People need to get the idea that you are an expert, the expert. There are tons of ways you can market yourself and get your name out there. Here are 7 things you need to be thinking about:

1. Networking. Going to events where your target market congregates is one of the most effective. You’ll need business cards if you go to these. Also be prepared to speak to a wide range of people with a wide range of potential issues they may be looking for answers to. Start with the people you already know – your former colleagues and bosses, your friends and existing industry contacts. If there are name badges make sure you have the right information on yours. Talk to as many people as you can and collect business cards. Online networks are also important. These are known as forums. Join the ones that form you target market. But don’t abuse these through blatant marketing or you’ll just get banned. Use these to build relationships

2. Ask for Referrals. If you get work and it’s successful ask your client for a referral or two. Normally people will be happy to recommend you. Ask for a quote you can put on your website. Even if the person to whom you are referred doesn’t have any work for you at the present time ask if they too could refer you to other potential clients.

3. Public presentations. Consultants are usually good at communicating. You need to be able to talk about your area of expertise to all sorts of people. Speaking at events offers a great opportunity to get your message out there. This can terrify some. But fear not. Practice with a friend what you want to say. Use visual aids to detract attention from yourself. Keep what you want to say short and to the point and ask the audience questions frequently to maintain attention and interest and interaction. Volunteer to offer them free information. Contact you chamber of commerce, organizations and forums in your locality. See what possibilities there are at local colleges, universities and libraries.

4. Adds and Articles. Try to get a short article in a publication or trade journal that your target market reads. This is good for your reputation and gets your message out there among potential purchasers. Make it interesting and engaging – not just an in-your-face advert. Approach a journalist or editor to write something for you. They are usually happy to have new information to provide. Put together a short e-book and put it on your website to sell.

5. Direct Mail. You can distribute direct mail as sales letters, ad mailings, or brochures. The thing is to create a document that attracts the attention or your recipient, engages their interest, provokes their curiosity ultimately compels them to take action. It is absolutely imperative that you emphasise the benefits that your client will receive as a result of buying your services. Concentrate less on everything else.

6. Cold Calling. Yes, I know – it sounds a pain and few people like it but don’t neglect it. Practice cold techniques. Learn the first names of the people you want to speak to so that it sounds to the gatekeepers – of which there will be plenty – that you know them. Understand that the person you assume is the decision maker may not be. It could be the person above or below them or even along from them! Make your aim of a call to get an appointment. Keep it short, keep it clear and do it early in the morning – sometimes the person you want to speak to will be in before the secretary and may well answer the phone instead.

7. Your website. It is true that much of your business will be generated from face to face relationships. Some think that this means you don’t really need a website. Think again! Your website is your presence on the web. A place for all those who don’t know a person who can solve their problem personally – so they look online. It’s a place where all those internet articles you are going to write can be stored so that people can see at a glance your expertise. It is a place where you offer back-end products and services, related business products and so on in addition to your consultancy service. Your site has the potential to send your income through the roof. Apart from having your contact details on there you absolutely must have lots of great copy (Yes, ‘salescopy’), and for goodness sake have an opt-in section so that you can collect all the email addresses of people who are interested in what you do.

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