You’re a master of your field and decided it’s time to make it official by opening your own consulting firm. Being a consultant comes with a lot of perks. You can make your own hours, choose your clients and work from anywhere in the world. But despite all of these positives, there are other aspects you need to consider. To make the transition into consultancy owner, you should ask yourself five important questions prior to opening for business.
The most successful consultants are experts in their field. They have years of experience in their field and a proven track record to back it up. Before opening, you need to have defined niche. You should also be able to easily pinpoint your top-selling points and how your level of expertise sets you apart from your competition. Within your consultancy’s sector, you need to zero in on what your ideal customer needs and wants. For many startups, there is a disconnect between the entrepreneur’s vision and the ability for others to see what they see. Some reasons people don’t understand your company vision are easily avoidable though so just be advised.
Even if you consider yourself an expert, continued education is a must. As a consultant, you’re expected to stay current with the latest trends and developments in your chosen field. In addition, you might need to improve in certain areas as well. For example, if you shy away from public speaking, you might want to learn ways to make the process less stressful. Regardless of niche, how you carry yourself and perform when meeting with prospective clients is important. If you come across as unsure of yourself, you could lose a lot of business.
When you think about your goals, what’s the first one that comes to mind? While most consultants say that being financially free is their main goal, you still need to dig deeper. You need to think about both immediate and long-term goals. This all begins with your business plan. A business plan is far more than saying what your consultancy is and what types of clients you want. It encompasses everything from finances and marketing to what you’ll do if things don’t go as planned. To get started, outline the services you offer and core objectives. You also need to detail your marketing strategy. Unless you specifically work in marketing, you have to find ways to get your business noticed.
In addition to using social media to build credibility, you need to make the most out of SEO. This means creating a website that utilizes the right words and phrases to get you noticed in online searches. You also need to know how to write blog posts that use the right number of keywords to avoid coming off as spam. If this isn’t your forte, you could hire a SEO consultant. SEO consultants know how to amplify content using SEO strategies that get your website noticed. If you’re not familiar with how the process works, there are guides that outline what these specialists do and how it can help get your business off the ground.
Having a full-time job in your chosen field doesn’t always mean that it’s in demand. In fact, if the market is too saturated, you might want to reconsider going it alone. To determine whether it’s worth becoming a freelance consultant, research your area of expertise. Pay close attention to its growth, or lack thereof, before quitting your job. Look for areas of consistent growth and identify possible targets that could benefit from your services. It’s also a good idea to start your consultancy as a side hustle. You’ll still have job security while building your own business.
This is one question every new consultant should ask. The dilemma always seems to lie somewhere in between not wanting to charge too much early on and not earning enough to make it worthwhile. Nothing is set in stone, so when it comes to setting your rates, take another look at your competition. Do they charge by the hour, project or have a flat rate? Do they offer a free initial consultation to entice clients to contact them? Is a retainer necessary? Weigh the pros and cons of each and see how they align with your financial goals.
Similar to structuring your pay scale, you also need to package your services. You need to be fair with pricing but also make a profit. If you offer a variety of services, you can offer them as à la carte and bundled into packages. Clients should have options, not feel forced to pay for something they really don’t need.
You can start your business as either a sole proprietor or an LLC, a Limited Liability Company. As a sole proprietor, you don’t need to register with the federal or local government. You are obligated to claim anything you make at tax time. As an LLC, you do register for an EIN. You can then do business under your employment identification number and file taxes as a business, not on your personal income tax return. Being an LLC also offers an extra layer of financial protection, just in case someone files suit against you.