In any case, they\u00a0have a lot of responsibility and they provide significant value by helping a business in its operations and processes.<\/p>\n
Typical features of consultants<\/h2>\n
Consultants come in a wide variety of flavor. In fact, there are perhaps too many different types of consultants to list. However, they all have a few things in common.<\/p>\n
Consultants are individuals considered experts in their field who provide professional counseling to clients. Consultants therefore are knowledge-sharers, and they analyze the client\u2019s situation and determine the best ways to move forward.<\/p>\n
The most important part of a consultant\u2019s work is to provide their clients with clearly visible added value.<\/p>\n
\n
The reason for hiring a consultant is usually that the client wouldn\u2019t feasibly be able to find, hire and train in-house experts for a particular problem. Usually consultants work on short- to medium-term goals with the client.<\/p>\n
Furthermore, as it is on a per-month or per-project basis, it is much more efficient. Consultants generally can analyze the individual\u2019s or company\u2019s needs, its resources, and help determine the best strategies.<\/p>\n
Often, consultants are also brought in to provide training or to undertake special change-actions.<\/p>\n
With all that being said, consulting is a fantastic job. Not only do you get to create change in your client\u2019s business, you\u2019ll also stand to make great rates. Average hourly consultant fees range from $80<\/a> to thousands of dollars<\/a>.<\/p>\n While the upper range is quite rare, it\u2019s still possible depending on what type of consulting you do.<\/p>\n As you can see, there\u2019s no reason to believe the consulting business will slow down at all. With that, now would be the best time for you to start your own consulting business.<\/p>\n Today, we\u2019ll look at the most important ways for you to start and grow a successful consulting business. This guide will cover the following topics:<\/p>\n I. The Advantages & Disadvantages of Consulting<\/a><\/p>\n II. Your Business Fundamentals<\/a><\/p>\n III.The Insurance, Licenses and Skills You Need<\/a><\/p>\n IV. Determining Your Price List<\/a><\/p>\n V. Getting Your Consulting Business Clients<\/a><\/p>\n VI. Summary<\/a><\/p>\n <\/div>\n In order to properly prepare yourself for what will come with your new business, let’s look at the most important advantages and disadvantages.<\/p>\n There are many advantages that come with the consulting business. Let\u2019s quickly overview them to get our bearings straight.<\/p>\n This is a truth for all self-employed workers. When you become self-employed, all the power and responsibility for your life goes back to your hands. You have the capabilities to decide who you\u2019ll work with, when, and how often. You are the only boss now, and you are in total control of your schedule.<\/p>\n Although the job can bring in lots of money, there really aren\u2019t high costs associated with it. Of course, what I mean here is any additional <\/em>funds needed for the job. Technically, your education and training were all very valuable, but becoming a consultant doesn\u2019t require a great amount of extra investment. Most of it is word-of-mouth and basic equipment you already have.<\/p>\n As I mentioned above, the earning potential for consultants is huge. There are wildly varying hourly rates for consultants floating around. However, all of them are constantly increasing.<\/p>\n One consultant<\/a> was able to charge $177\/hour after 15 months of becoming self-employed. Another\u00a0charged $3,000\/hr with a four-hour minimum<\/a> on a rush job.<\/p>\n Because consulting is the act of providing knowledge and training to clients that need it, you can focus only on the things you know really well.<\/p>\n And even better, you can focus on those things that you are passionate about. It could be marketing, business, HR, accounting, IT or anything else. You\u2019ll be working for your passion, and in many ways that\u2019s not work at all.<\/p>\n Of course, as for everything in life, there\u2019s a flipside to consulting. In order to be fully prepared for what you\u2019ll be getting into, let\u2019s look at some of the downsides of consulting.<\/p>\n Becoming self-employed is great, and it\u2019s independent, but it\u2019s also quite stressful. You no longer have a steady income, one that is practically promised to you at the beginning or end of the month. Now, you have to work for every single penny that you earn, and this can be quite hard sometimes, especially at the beginning.<\/p>\n Because consulting work is based on experts providing consultations, you\u2019ll have to elbow your way into the field. In order to make yourself visible, you\u2019ll have to hustle a lot and you\u2019ll find there are lots of competitors out there. However, with great services and referrals, you\u2019ll be able to get a piece of the market just for yourself.<\/p>\n One of the major disadvantages of self-employment is that for a good while in the beginning you\u2019ll have unstable income. One month will be great, and the next will be crickets, and you\u2019ll need to hustle harder than ever to find clients. However, this is only a feature of newer consultants, and with time you will stabilize.<\/p>\n Now that we\u2019ve looked at the biggest advantages and disadvantages of starting a consulting business, we need to focus on getting a good business fundamental set up.<\/p>\n This means creating your strategic business plan and deciding on\u00a0the tools you\u2019ll need to succeed.<\/p>\n Starting in any business requires that you have a roadmap of where you hope your business is heading.<\/p>\n Although many small business owners or self-employed people don\u2019t think business plans are necessary, they are wrong. Business plans are plans for your business\u2014it\u2019s as simple as that.<\/p>\n The business plan can serve as a reminder down the line for you as to what your main goals are and what the mission of your business is. What do you hope to accomplish in 1 year? 5 years? 10 years?<\/p>\n It\u2019s also important that you regularly go back to your business plan and update it. Businesses are always in a sort of flux, and it would be impractical for your business goals to be the same on the first day as on the 12th<\/sup> month.<\/p>\n Your business plan should contain the following sections (although the length is up to you):<\/p>\n We\u2019ve written up a comprehensive, full guide on helping you create your perfect business plan. Read our full, 8,000-word guide here<\/a>.<\/p>\n In 2017, it goes without saying that every job on the planet can be helped by the appropriate software or apps. Consultancy is no different.<\/p>\n For your business, you\u2019ll need to be organized with your time. Let\u2019s look at some of the best software and apps for your consultancy business.<\/p>\n This project management and collaboration tool will help you to work on your projects smoothly and easily with your clients. Trello is free and uses a billboard method with lists organized based on whatever workflow you have in place.<\/p>\n You can use it to track your client projects as well as invoice those clients to join your board. This way they can see the progress in action.<\/p>\n Your business is more than your consultancy. It\u2019s also finance and accounting, and for the everyday invoicing and expense tracking needs, you can use InvoiceBerry\u2019s online invoicing software.<\/p>\n The software even allows you to make and send your invoices in under 60 seconds.<\/p>\n This is a very simple, straight-forward to-do list. There are no pictures, no other places to click, no social media\u2014no distractions whatsoever.<\/p>\n Write down your tasks one-by-one, and then each time you finish it, you can click on \u201cDone.\u201d<\/p>\n This is one of the most popular and useful apps for increasing productivity and mange workflows. It\u2019s an app with a simple purpose (take notes wherever you are, easily), but it will help you jot down and communicate your thoughts very well.<\/p>\n These are the most important things you need to know, as they will help you decide what are the insurance and skill requirements for your business.<\/p>\n As a self-employed or independent contractor, you\u2019ve probably already looked at getting your basic insurance coverage, such as health insurance. There are two other types of insurance consultants need to have as well.<\/p>\n Any business, no matter the type, needs to have general liability insurance. This generally deals with bodily injury or death, or any kind of damage to physical property.<\/p>\n General liability covers what\u2019s known as \u201cslip and fall\u201d claims and lawsuits, quite common in the US. This insurance usually apples to others, not the insured person, although general liability insurance<\/a> for small businesses is often packaged with other insurance to cover the insured person\u2019s business property.<\/p>\n However, there is another type of insurance you\u2019ll also need. That is professional liability insurance, which will help protect you in case a client sues you for not fulfilling professional obligations or for doing it badly.<\/p>\n This type of insurance is also known as errors and omissions (E&O) insurance, and it\u2019s necessary in addition to your general liability insurance.<\/p>\n These different types of liability insurance are good for two reasons:<\/p>\n Getting yourself covered in these situations will then be not just good for your work, but actually necessary for its success.<\/p>\n Whether a business requires a business license depends on the county, city or state in which the business operates.<\/p>\n The type of licenses required also depends on the field in which the consultant will work. Fields that generally require licenses are:<\/p>\n and other related fields. These license requirements may be or legal reasons, for competition, or for both.<\/p>\n There is a common myth that, because consultants may be exclusively working on-site at a client\u2019s business site, they can operate their business without a license.<\/p>\n However, the act of exclusively providing on-site service to your clients may be in violation of US federal guidelines on the distinctions between independent contractors and employees. Having a consultant working steadily at a location may murky the distinction between independent contractor and employee.<\/p>\n If it is disputable, there may be fines and other types of problems for the client.<\/p>\n There are benefits to getting a business license than simply taxes. Consultants with business licenses are able to qualify for business credit, open business bank accounts, and have a myriad of other professional benefits.<\/p>\n Many professional, bigger clients will also require consultants to have appropriate country and state licenses in order to do their end-of-year tax reports.<\/p>\n There are many degrees or courses consultants can take in order to excel at their profession. This of course all depends on the type of consulting you\u2019ll be doing.<\/p>\n However it is important to always keep up to date. Continued professional development should be a goal for every specialist. This can be done for consultants by enrolling in courses, attending conferences, getting accreditation, certificates, and in general being on top of the trends and developments in the industry.<\/p>\n As far as skills, it\u2019s important that consultants have the appropriate personality to be good at their work. This includes:<\/p>\n You can find out more by looking at the graphic below:<\/p>\n Because of the many different types of consultants that there are out there, it is difficult to whittle down specific rates you should be setting.<\/p>\n Generally, however, there are three basic ways consultants set their prices.<\/p>\n Perhaps the most popular way for any self-employed person to charge their clients, time-based pricing allows you to invoice your client by the hour. This is perhaps the easiest to manage (although not foresee).<\/p>\n The way to determine how you\u2019ll set your daily rate is by adding a third, doubling, or even tripling what you received in your previous work. The reason you add to your day rate is because now you\u2019ll have to do the sales and marketing, customer service, and all other functions you didn\u2019t need to do previously.<\/p>\n One way is to calculate the working days in a year, about 250. Take away 20 days from that to account for sick days, vacation, etc.<\/p>\n If you made $60,000 at your previous job, and you add a third, it comes to $80,000. Divide that by 220 days, and you\u2019ll get a day rate of $363. This is how much you should charge for 8 hours of working. After that, add in the appropriate taxes (7% for state, etc., or 20% VAT in the UK).<\/p>\n This pricing strategy is based on how accurately you can estimate the time and resources it will take to complete a project.<\/p>\n One of the bigger complaints of hourly or daily pricing strategies is that the client has some doubts whether you are working only for pay. Charging by the project helps alleviate that worry.<\/p>\n Because there is a fixed cost with the project, your client won\u2019t be worried if the scope of the project gets larger than it first was estimated as.<\/p>\n You also have strong motivation to complete the project as best as you can, knowing that any unnecessary delays is money that you are not receiving from your next project.<\/p>\n Another benefit is that you won\u2019t have to worry about tracking your hours. However, it usually takes some time and experience before you can more accurately come up with a good price for projects.<\/p>\n Of course, there is a very important rule to remember here: always under-commit and over-deliver.<\/p>\n This last pricing strategy is a bit less specific, but it is based on how much value the consultant\u2019s help will bring to the client.<\/p>\n In order to properly price this added value, you have to know some things about your client\u2019s business, such as:<\/p>\n For example, imagine a client wants you to create processes that will help them cut costs by $150,000. In that situation, it wouldn\u2019t be outlandish to charge them $15,000 or $20,000 based on the added value of your services.<\/p>\n However, the downside may be just in convincing the client that the fee is justifiable, as the price they are willing to pay may fluctuate based on many factors. Secondly, you also need quite a lot of experience and fantastic reputation in your industry to use this strategy consistently.<\/p>\n Having laid all the groundwork for what you need to start<\/em> your consulting business, we now need to look at how to get your clients and make it grow.<\/p>\n We\u2019ll go over some important ways on how you can not just find your first client, but also secure your second, third and so on.<\/p>\n One of the most important jobs for a consultant when it comes to advertising their services is to convince the potential clients that they even need the service. Most of them won\u2019t realize it, and it\u2019s the job of the consultant to be persuasive.<\/p>\n Let\u2019s look at three ways to get your customers: using traditional marketing, social media, and inbound marketing.<\/p>\n Although traditional marketing has lost favor in the 21st<\/sup> century, there are still many strong points to consider about it. There are a few different traditional marketing methods you can use to get word out about your business.<\/p>\n The success of this depends on how well you target your audience. If you do get a great prospect list, you can send them a brochure, flier, sales letter or many other things.<\/p>\n Make sure that your message is personalized, compelling, and that it emphasizes the benefits of your service. It should also include all the important information, such as your phone number, email, website and social media accounts.<\/p>\n Although this may often be overlooked, it\u2019s important that you get positive referrals from past or present clients. This is a wonderful marketing tool (right next to word-of-mouth) and provides a human connection to your brand.<\/p>\n Instead of asking for a referral face-to-face, send a friendly email or put it in a thank you letter. Then ask for other colleagues, friends, family or associates that may be in need of your consulting services.<\/p>\n Here you\u2019ll have to be careful with your money. Traditional advertising can be more expensive than online.<\/p>\n However, depending on what type of consulting you do, you may consider putting your ads in trade journals, magazines, or other materials that your target audience may use.<\/p>\n Cold calling has a tricky reputation because, well, it is often uncomfortable for both the caller and the receiver, and secondly it\u2019s mostly a failure, depending on how you look at it.<\/p>\n For example, in order to get one yes, you will probably have to face up to 30 or 40 nos. However, this may not be a failure. If you cold call 40 people a day, then that means you could get one prospective client per day on average.<\/p>\n Social media is the new king of the marketing world. It helps spread the word about you and your brand in new ways with often lower costs. Let\u2019s look at some ways to use social media to get and grow your consulting business.<\/p>\n The most important thing to do before you even try any social media marketing is to optimize your social media page.<\/p>\n Your page should have your one-sentence pitch, all your contact information, as well as what your niche and services are. You should also not worry about being too professional\u2014it is social media after all. Add in one or two pictures of the family or friends to humanize yourself.<\/p>\n All in all, within a few minutes of visiting your page, the client should have a good idea of who you are and what you do.<\/p>\n Social media is\u2014you guess it\u2014all about being social. It is important to remember that on social media the aim (at least the first aim) should always be to establish a relationship of some sort. Just as you wouldn\u2019t pitch your business at a party to someone you\u2019ve never met before right off the bat, so you shouldn\u2019t just pitch someone immediately on social media.<\/p>\n Interact with prospective clients on Twitter and Facebook. This takes time, but people are always willing to engage in real conversations online. And, once you\u2019ve established even a light relationship, it will be easier to do your pitch.<\/p>\n On Facebook and LinkedIn, even Google+, there are many groups dedicated to virtually any niche. You should find one related to yours and join in on the discussions going on in those groups.<\/p>\n Of course, as you have experience and knowledge in your field, you will be able to communicate effectively and provide useful advice. Likewise, you\u2019ll receive the same. Even better, you\u2019ll begin to form a digital network of consultants and prospective clients.<\/p>\n With Facebook\u2019s search function, it\u2019s really easy to find niche conferences in your area. If you are a marketer, just type in \u201cmarketing conference\u201d and you\u2019ll be able to see upcoming events in your area.<\/p>\n This a great opportunity to find the best conferences to go to. Even better, you can see who the attendees will be, so you can do some research and jot down the names of some potential clients.<\/p>\n Facebook ads are a really cheap way to get your name out there. It has great targeting tools and it is quite cheap, depending on some factors. There are ways to get clicks on your ads for less than $0.10 and some even for less than a penny.<\/p>\n Facebook ads are also a great way to do research before you go for the bigger and more expensive Google ads. With Facebook, you can run multiple ads simultaneously, and you won\u2019t pay unless someone clicks on it.<\/p>\n For even more in-depth information on how you can use social media to boost your business, get our free ebook\u00a0 The Ultimate Guide to Social Media for Small Businesses & Freelancers<\/a>.<\/p>\n One of the more emerging marketing trends in the last few years is inbound marketing. The methods we discussed above are examples of outbound marketing\u2014sending messages out to your intended audience.<\/p>\n![\"These](\"https:\/\/i0.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/consulting-billing-rates.png?resize=690%2C460&ssl=1\")
I. The Advantages & Disadvantages of Consulting<\/h2>\n
The advantages of consulting<\/h3>\n
![\"There](\"https:\/\/i2.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2016\/07\/the_benefits_of_x-e1467287994863.png?resize=690%2C218&ssl=1\")
<\/p>\nGreater independence<\/h4>\n
Low startup costs<\/h4>\n
High income potential<\/h4>\n
Working with your passion<\/h4>\n
The disadvantages of consulting<\/h3>\n
![\"You](\"https:\/\/i1.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2016\/07\/the_disadvantages_to_x-e1467288048774.png?resize=690%2C218&ssl=1\")
<\/p>\nStress and responsibility<\/h4>\n
High competition<\/h4>\n
Unstable income<\/h4>\n
II. Your Business Fundamentals<\/h2>\n
![\"In](\"https:\/\/i0.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/business-fundamentals.jpg?resize=690%2C345&ssl=1\")
<\/p>\n1. Your strategic business plan<\/h3>\n
\n
2. The tools you need<\/h3>\n
Trello<\/a><\/h4>\n
![\"Trello](\"https:\/\/i1.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/Trello_logo.png?resize=582%2C163&ssl=1\"){kind=logo}
<\/p>\nInvoiceBerry<\/a><\/h4>\n
![\"Use](\"https:\/\/i2.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2016\/07\/invoicing_software-e1480068504983.png?resize=690%2C154&ssl=1\")
<\/p>\nNowDoThis<\/a><\/h4>\n
![\"NowDoThis](\"https:\/\/i0.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/nowdothis_400x400.png?resize=200%2C200&ssl=1\")
<\/p>\nEvernote<\/a><\/h4>\n
![\"Evernote](\"https:\/\/i1.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2016\/11\/evernote-logo.png?resize=690%2C192&ssl=1\"){kind=logo}
<\/p>\nIII. The Insurance, Licenses and Skills You Need<\/h2>\n
![\"These](\"https:\/\/i2.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/licenses-insurance-requirements-consultants.jpg?resize=690%2C345&ssl=1\")
<\/p>\n1. The insurance you need<\/h3>\n
General liability insurance<\/h4>\n
Professional Liability Insurance<\/h4>\n
\n
![\"These](\"https:\/\/i2.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/consulting-insurance.png?resize=690%2C345&ssl=1\")
<\/p>\n2. Licenses<\/h3>\n
\n
The Common Myth<\/h4>\n
3. Knowledge & skills<\/h3>\n
\n
![\"You'll](\"https:\/\/i2.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/consultant-skills-needed2.jpg?resize=690%2C400&ssl=1\")
<\/p>\nIV. Determining Your Price List<\/h2>\n
1. By time<\/h3>\n
2. By project<\/h3>\n
![\"These](\"https:\/\/i0.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/3-types-consulting-pay.jpg?resize=690%2C528&ssl=1\")
<\/p>\n3. By perceived value<\/h3>\n
\n
V. Getting Your Consulting Business Clients<\/h2>\n
![\"We'll](\"https:\/\/i2.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/getting-consulting-clients.jpg?resize=690%2C345&ssl=1\")
<\/p>\n1. Traditional marketing methods<\/h3>\n
Direct mail<\/h4>\n
Referrals<\/h4>\n
Advertising<\/h4>\n
Cold calls<\/h4>\n
2. Social Media<\/h3>\n
![\"These](\"https:\/\/i2.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/social-media-consulting.jpg?resize=690%2C345&ssl=1\")
Set up your Facebook page<\/h4>\n
\u201cCold\u201d socializing<\/h4>\n
Join groups<\/h4>\n
Browse through Facebook events<\/h4>\n
Use Facebook ads<\/h4>\n
3. Inbound marketing<\/h3>\n
![\"Creating](\"https:\/\/i2.wp.com\/www.invoiceberry.com\/blog\/wp-content\/uploads\/2017\/02\/blog-consulting-marketing.jpg?resize=690%2C345&ssl=1\")