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Before You Start a Consulting Firm

The idea of starting your own consulting firm can be exciting! You may want to rush out and design a logo, print some business cards, and start handing them out to anyone and everyone. But hold on! There are several things you need to know and do before you can start your own consulting firm, if you want to make it as successful as possible.

Research

Before you can start your own consulting firm, you need to research your potential market. You should know if there’s a high demand in your area for your services, or if the market is already saturated (the number of companies providing the service are meeting or exceeding the demand for it). You need to find out who your biggest competitors are, who their clients are, what they’re doing well, and what they’re not doing so well.


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Planning: Preparing Your Business Plan

Before you can start your own consulting firm, you need a business plan. It is essentially an outline or report, that says why you’re in business, who your customers are, what services you offer, how you intend to market your products and services, who your competitors are, what strengths and weaknesses your consulting firm has, your firm’s short-term and long-term goals and strategies for achieving them, and your financial records and projections to show when you expect to turn a profit.

Planning: Writing Your Marketing Plan

While some aspects of your marketing plan were likely discussed in your business plan, a separate and more advanced marketing plan is advised. In your marketing plan, you can lay out your ideas on how to market or promote your services and your consulting firm. Focus on branding issues, what kind of advertising would work best for your firm, how you intend to encourage word-of-mouth or referral marketing and what marketing efforts you plan to use to get repeat customers, just for a few examples.

The Legal Issues

Before you can start your own consulting firm, and “open for business,” you have a few legal housekeeping tasks to deal with.

  1. Business Structure – Decide what business structure you’ll use, and deal with necessary forms and fees.
  2. Licenses / Permits – Take care of licenses, zoning permits, and business permits, as required by your state.
  3. Taxes – Register with your state for income taxes and a sales tax license. Getting an EIN from the IRS is required by some banks.

Open a Bank Account

A lot of new entrepreneurs wait to open their bank accounts until after they’ve started working with clients. The problem with that is simply that it can get “lost” in everything else going on. You’ll find that you’re soon too busy to be comparing banks and choosing an account. One of the most important relationships you’ll have after you start your own consulting firm is that which you’ll have with your banker. Get on it early, and choose wisely!

Get Financing

Once you have an account, and a business plan in hand, you can start pitching your consulting firm to potential investors. Be ready to explain what makes you a good investment. No matter where you get your financing, make sure you’ve secured it before you open your doors for business. Budget for everything, no matter how small. If you don’t know what you need, you’ll never find someone willing to give it to you.

Prepare for Launch!

Have you ever heard of a gallery or restaurant opening? They don’t just say, “Hey, let’s open our doors today.” They launch! You should launch your consulting firm too. Choose a launch date and promote your company name, logo, and services, to as many people as possible. Build a buzz before you start accepting clients.

4 Comments

  1. P. Ghosh

    Hi,

    I have high ambitions to open a consultancy firm in Delhi. I have no prior experience except woirking in BPO sectors from 4-5 years. I want to execute my plan in a systematic order. I am actually wondering how much capital is required for the same. Man power will not be an issue for me to start with. But capital is still bothering me. I am just 25 and perhaps do not have that much faith on myself to actually go for it. so still researching the plus and minuses. once done, I am sure jumping into this. Any help would be appreciated.

  2. naman

    I have high ambitions to open a consultancy firm in Delhi. . I want to execute my plan in a systematic order. I am actually wondering how much capital is required for the same. Man power will not be an issue for me to start with. But capital is still bothering me. I am just 18 and perhaps do not have that much faith on myself to actually go for it. so still researching the plus and minuses. once done, I am sure jumping into this. Any help would be appreciated.

  3. Sam Kabugi

    Hi,
    I’m passionate about business, management and investment.it is this passion that stirs up the desire within to build up a management consulting firm.
    I have been coming up with all the plans for its operation,however i’m a little bit worried on the issue of experience,how much experience would you say is good enough before one can launch themselves, into the consulting field?

  4. Denis Otema

    Hey guyz, I am 25 just out of Univ.. I am currently writing a business plan for my consultancy firm which involves carrying out research for NGOs and Individuals, it will in future have a branch for advisory in IT.

    I am currently analysing and interpreting data for Students especially but the demand is overwhelming and have to back up by learning more data application tools through my earnings …. This is a dream come true … I know little but im making money through my skills. I offered BSc. economics & Statistics at Uganda Martyrs University.

    They like my work!

    Looking forward to employing more trusted people whom I can work with.
    “NO DREAM IS TOO BIG TO ACHIEVE”

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