How to Start a Consulting Business

The dictionary defines a consultant as "an expert in a particular field who works as an advisor either to a company or to another individual." Sounds pretty vague, doesn't it? But unless you've been in a coma for the past decade, you probably have a good idea what a consultant is.
Are you an expert in the fund-raising field? Maybe you have worked for nonprofit agencies in the field of fund-raising, marketing, public relations or sales, and over the years you have discovered how to raise money. As someone who has turned a decade of fund-raising successes into a lucrative consulting business, I can tell you that fund-raising consulting is indeed a growing industry.

Things to Consider Before You Become a Consultant

• What certifications and special licensing will I need? Depending upon your profession, you may need special certification or a special license before you can begin operating as a consultant. For example, fund-raising consultants don't need special certification, although you can become certified through the National Society of Fund Raising Executives. And in some states, you may need to register as a professional fund-raising consultant before starting your business.
• Am I qualified to become a consultant? Before you hang out your shingle and hope that clients begin beating your door down to hire you, make sure you have the qualifications necessary to get the job done. If you want to be a computer consultant, for example, make sure you are up to date in the knowledge department with all the trends and changes in the computer industry.
• Am I organized enough to become a consultant? Do I like to plan my day? Am I an expert when it comes to time management? You should have answered "yes" to all three of those questions!
• Do I like to network? Networking is critical to the success of any type of consultant today. Begin building your network of contacts immediately.
• Have I set long-term and short-term goals? And do they allow for me to become a consultant? If your goals do not match up with the time and energy it takes to open and successfully build a consulting business, then reconsider before making any move in this direction!

Although you can be a consultant in just about any field these days, the current top 20 consulting businesses include:
1. Accounting: Accounting is something that every business needs, no matter how large or small. Accounting consultants can help a business with all of its financial needs.
2. Advertising: This type of consultant is normally hired by a business to develop a good strategic advertising campaign.
3. Auditing: From consultants who audit utility bills for small businesses to consultants who handle major work for telecommunications firms, auditing consultants are enjoying the fruits of their labor.
4. Business: Know how to help a business turn a profit? If you have a good business sense, then you'll do well as a business consultant. After computer consulting, people in this field are the next most sought after.
5. Business writing: Everyone knows that most businesspeople have trouble when it comes to writing a report--or even a simple memo. Enter the business writing consultant, and everyone is happy!
6. Career counseling: With more and more people finding themselves victims of a corporate downsizing, career counselors will always be in demand. Career counselors guide their clients into a profession or job that will help them be both happy and productive as an employee.
7. Communications: Communications consultants specialize in helping employees in both large and small businesses better communicate with each other, which ultimately makes the business more efficient and operate smoothly.
8. Computer consulting: From software to hardware, and everything in between, if you know computers, your biggest problem will be not having enough hours in the day to meet your clients' demands!
9. Editorial services: From producing newsletters to corporate annual reports, consultants who are experts in the editorial field will always be appreciated.

10. Human resources: As long as businesses have people problems (and they always will), consultants in this field will enjoy a never-ending supply of corporate clients, both large and small. (People-problem prevention programs could include teaching employees to get along with others, respect and even violence prevention in the workplace.)
11. Insurance: Everyone needs insurance, and everyone needs an insurance consultant to help them find the best plan and pricing for them.
12. Marketing: Can you help a business write a marketing plan? Or do you have ideas that you feel will help promote a business? If so, why not try your hand as a marketing consultant?

Target Market:Your idea may be the best one you have ever thought of, but there needs to be a market for your ideas. Someone must be willing and able to pay you for your expert advice.In other words, who are your potential clients? Will you be marketing your consulting services to large corporations? Or will you offer a specialty that would only be of interest to smaller businesses? Perhaps your services will be sought after by nonprofit organizations. Whatever the case, before you go forward, make sure you spend time preparing both a business plan and a marketing plan. You won't be disappointed with the results--especially when clients begin paying you!

Location and Employees:

Your consulting business will probably not require a large capital investment at first. In fact, if you are able to, you should consider operating out of your home. (Certain deed restrictions and local laws may prohibit you from doing this; check with an attorney before you proceed.)

There are many advantages to having a home office. Among them are:

• Low overhead expenses. You don't have to worry about paying rent or utilities for an office; you will appreciate this feature until you establish a regular client base.
• Flexibility. There is little doubt that operating as a consultant at home gives you a great deal of flexibility. You can set your own hours and take time off as you need it.

Employees:

When you first open the doors to your consulting practice, you may be able to handle all the operations by yourself. But as your consulting business begins to grow, you may need help handling administrative details or help completing the actual consulting assignments.

Income and Billing

Now that you have made the decision to open your consulting business, you need to get serious about how much money you will charge your clients. If you charge too little, you won't succeed in business. If you charge too much, you won't get any clients. So how do you find that middle ground that seems fair to everyone involved? One way to help you decide how much to charge is to find out what the competition's rates are. A simple telephone call, asking for their brochure and rates, should do the trick. Then set your rates so that you are competitive with everyone else in the community.

Project Rates

When working on a project rate basis, a consultant normally gets a fixed amount of money for a predetermined period of time. A few of my fund-raising clients actually preferred to be charged this way, so it wasn't unusual for me to charge $36,000 for a one-year project in which I consulted them on how they could raise money. Because of the amount of money involved, most agencies preferred to be billed on a monthly basis. This worked out fine until I realized that many agencies were late paying their monthly bills.

Marketing

If your consulting business has no clients, then you have no consulting business. But you must remember that selling your consulting services is not the same as selling a car or a house. In the case of the car or the house, the customer is probably already in the market for one or both of those products. Your job, then, becomes harder, because you are marketing your services to people who may not even be aware that they need those services.
There are a variety of methods you need to become both familiar and comfortable with in order to begin attracting and keeping clients. Let's look at some of the more conventional ones that are being used by many consultants today.

Advertising

The limits you place on advertising your consulting services will be directly tied to your advertising budget. If you are lucky enough to have a very healthy advertising budget, remember that you don't have to spend the money on ads just because you have it to spend. Advertising can be very expensive. Jeffery B., a Harrisburg, Pennsylvania, consultant, advertises in his association's publication. "They publish what is called the Green Book, which is a directory of research and marketing consulting businesses around the country. It has helped me generate new business," he says.

Public Speaking

Public speaking is another excellent way to recruit new clients and to earn a reputation for excellence in your community. Unless you live in a town so small it doesn't have a chamber of commerce or a Lion's Club, Rotary Club or other similar service organization, you can begin offering your services as a speaker for luncheons, dinners or any other special occasion.

Source: www.entrepreneur.com