Everything You Need to Know About Starting a Consulting Business

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A lot of professionals have thought at least once about starting a consulting business. And, at the surface, it may appear to be a great career path to follow: being your own boss, bringing in clients, developing exciting projects, earning a lot of money and so on.

But actually, consulting isn’t all that sparkly, easy and glamorous. As a matter of fact, it’s much harder than some people would want you to believe.

So if you think that starting a consulting business is the next natural step in your professional development you should take into account a couple of things that will spare you some money and headaches and take you one step closer to achieving your lifelong dream.

Here’s what you need to know:

1. You’ll have to deal with your fair share of irritable and grumpy individuals. Some people simply cannot deal with unpleasant persons and maintain relationship with them, especially if these individuals BS or kick them around. If you don’t feel like you’re prepared to face cranky people, then you should probably consider doing something else. Consulting is a face-to-face business where you meet with people, shake hands, step into corporate offices, sit across large tables and talk to people. And whether you like it or not, some of the people you will meet are real jerks that sometimes have unrealistic expectations from their consultants.

It won’t take you a lot of time to figure out who is worth your while and who is pulling your leg. As you figure it you, you will have to endure some relationships that will eat away at you.

2. The most valuable thing you have to offer is knowledge. This is the primary reason why a consultant is hired. You need to assert your knowledge in the niche for which you were hired in the first place. The client that hires you to work for him/her does so because they are aware that you know something they’re not familiar with. And this means that you have to tell them like it is without backing down.

When you are paid to deliver the knowledge you possess, then that’s what you should do. Nobody says that they need to like what you have to say. And if they disagree, so be it. Given the fact that the most valuable thing you deliver to your clients is your expertise, you shouldn’t deliver it partially. Otherwise, you’re bound to lose the quality of your service.

3. You’re probably asking for less money than you deserve. Probably one of the biggest mistakes consultants make is that they ask for less money than they should for their services. Some may do it because they’re inexperienced or because of guild. Still, it might just be that they simply do not know how much they should actually be charging. As in the case of any business, the setting of the fee is not done via a magic formula; it just needs to follow one simple rule: ask for more than you think you should.

Clients find it important to receive a ROI (return on investment), so this should be just as important for you as well. If you are able to back it up and prove your ROI, you can easily ask for a significant percentage of the client’s profit.

Business consultants are aware that the more they charge, the better they look: if you see two purses, one for $50 and the other for $2,000, which one would you think was better? Obviously the more expensive purse is better. And the same logic applies for consultants. Consultants with fees of $100 per hour will always be less valued than consultants who charge $,5000 per hour.

If you are expensive, then it is more likely to get clients who pay top dollar for your knowledge. And that’s what you should always look for. Just keep in mind that the fee needs to be correlated with the value you offer to your clients.

4. You are selling yourself. As distasteful as it sounds, a consultant is selling himself or herself. And there’s nothing bad or nasty about it. It’s just the way business is conducted in the consulting world.

In order to successfully sell yourself, you need to be prepared to do a few things.

  • First of all, you need to invest in your personal brand.
  • The look you got will be just as good as the services you offer, so dress accordingly.
  • Have a big price tag on yourself. People constantly associate higher cost with higher value. The more money you charge, the more people will find you to be valuable.
  • Constantly show people that you’re trustworthy. This is one of the essential things a business consultant must inspire. Without it, no one will be tempted to hire you. Also, if they do hire you, they won’t take into account your advice. Trust is the one thing you have to go on.
  • Prove you are worth the money the client is paying you. While you need to show clients you can look the part, you must also need to be able to play the part. Deliver on your promises.
  • Consider yourself as a valuable brand. The better the brand, the more success you’ll register.

5.You won’t be your own boss. One of the major myths of consulting is that you are your own boss. Actually, that’s not the case. As a matter of fact, the individual that pays your consultancy fee is your boss. As a consultant, that means that your clients are the ones in charge. They paid for your billable hours and they expect a return on their investment.

6. Disappointment is inevitable. Starting up a business, any kind of business, involves moments of chaos and insecurity, not only personally, but also professionally. The challenges that arise from starting a company can take a toll on the founder. It may sound brutal, but it’s just how things are. This also applies in the case of consulting. So regardless of how you respond to challenges, one thing’s for certain: you will eventually have to deal with disappointment and failure. What differentiates successful entrepreneurs from the rest is the way they handle failure.

So if you wish to become a consultant, you need to know that there is nothing easy about it but that the rewards are worth it. Good luck!

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