Consulting services is a huge global market worth $132 billion. It includes all types of consulting businesses and individuals that help others succeed. If you have expertise in a specific niche and have years of experience in a field, you can become a consultant and help business owners build their businesses.
It provides you with passive income online. You can run your consulting services business online from your home, create and share content with your participants, and manage payments online.
Starting a consulting business can be easy if you know the right steps and factors to consider.
You may be a mompreneur, solopreneur, a retired professional or this may be your side hustle. Considering you need to do everything yourself ranging from setting up your consulting services business to marketing to finding potential clients to customer support and more, you need to be smart about building a scalable and sustainable business model.
This actionable guide covers all the steps on how to start a consulting business from scratch.
What is Consulting Business?
Consultation is the process of offering expert services in a specific niche or field to help others achieve their goals. A consultant could be an individual or a firm that offers professional services to organizations and/or individuals.
For example, management consultants like McKinsey and Deloitte help and guide large and small businesses to run their business operations.
Consultancy isn’t just limited to offering advice and help. The scope is flexible and may include planning, strategy development and execution, data collection, research, solving a specific problem, and more.
The reason why consulting services are preferred by businesses and individuals is that consultants are experienced and offer a new perspective from the outside to an issue that’s often ignored when looking from the inside.
Types of Consulting Services
There are different types of consulting services that you can pick from based on your experience and knowledge:
- Management consulting
- Marketing Consultant
- Human resources consultancy
- Strategy consultants
- IT consultant
- Sales consultation
- Financial consultancy
- Business Consultant
- Branding consultancy
- Career consultation.
As you can see, consultation services are mostly related to businesses. This means you will mostly (not always) target businesses to sell your consultancy services.
How to Start a Consulting Business
Here is a 7-step process to start any type of consultant business from scratch:
- Step #1: Choose your niche (look at your strengths)
- Step #2: Select a business model
- Step #3: Identify your target market
- Step #4: Choose a platform
- Step #5: Set the price for your consulting business
- Step #6: Market to potential clients
- Step #7: Scale.
Step #1: Choose Your Niche
The first step is selecting a niche for your consulting services.
The best way to find your niche is to look at your experience and skills. You can’t qualify to offer expert services in a field you aren’t an expert in. You must be experienced and expert in the niche you are offering consulting services to.
For example, if you want to become an HR consultant, you must have intensive experience in human resources and must have a proven track record to showcase your expertise. If you are a new HR graduate, you can’t offer consulting services. Nobody will hire you.
But your experience isn’t enough to choose a niche for consulting business. You need to consider other factors too:
- Passion and interest: Do you love doing what you are offering as consulting services?
- Need: Are there enough clients in the market who need and are willing to buy consulting services in this niche?
- Target market: How big and profitable is the target market?
- Competition: What’s the level of competition in the niche? Is competition fierce or negligible?
This requires market research. Consider looking at competitors who are already offering consulting services in your niche and see how well they are doing. This will give you a decent idea of the existing market, client needs, and what to expect.
Follow this process to finalize your niche:
- List all your strengths based on your experience, passion, and interest
- Do the research and narrow down each strength to a single niche. Using keyword tools like Ahrefs and Semrush can provide you with tons of niche ideas based on a broad field
- List your competitors and analyze them. Check their websites, blogs, social accounts, and recent projects
- Narrow your strengths based on profitability. This should include market size, need, number of competitors, and any other factors
- Finalize your niche with the highest potential and lowest competition.
Step #2: Select a Business Model
Selecting the right business model for your consulting business is essential because it is linked to revenue, scaling, and work-life balance.
A lot of consultants enjoy a flexible routine by working from their homes while others spend 14 hours a day in their offices. It all comes down to your consulting business model that dictates your lifestyle and revenue.
You have the following business models to choose from:
- Solo consulting model
- Firm consulting model
- Productized consulting model
- Hybrid model.
1. Solo Consultation Model
A solo or independent consultant business model means you will be working individually with your clients. You work solo without a team.
This type of consultation model is flexible and profitable. You can set your own working hours, set your schedule, and spend your week as per your desire. The expenses are minimal since you don’t have a team or a big office.
It is a sole proprietorship business that’s owned and run by a single individual with no distinction between the owner and the consulting business. You become a brand. You can set your own pricing be it fixed price or hourly rate or hybrid.
The problem with the solo consultant business model is that it can’t exist without you. You can’t sell it. You have to work yourself to keep your business alive and running.
2. Collaborative Consulting Model
A consultation firm has multiple consultants who work on different projects simultaneously. You own and manage the firm and all the consultants.
It is usually a limited liability company or a partnership company depending on what business model you choose. The profitability of a firm consulting company might not be too high as it comes with lots of expenses and high initial capital.
Since you will work as owner and consultant for your firm, you will be offering consultation services and managing the workforce as well.
It is a full-fledged business entity that runs without you. Your firm becomes the brand, and you can separate yourself from it whenever you want.
3. Productized Consulting Model
When you convert your consulting services into a digital product that you can sell repeatedly. Your consultation service is delivered in the form of a product with a clear price and outcome.
For example, a subscription to an online consultation course with videos, PDFs, and worksheets. This helps you serve a wider audience than solely offering consultation sessions. Those require time and are not scalable.
The productized consulting business model offers a lot of benefits:
- It generates passive income by converting your service into a subscription model
- It is scalable and flexible
- Runs on complete autopilot with minimal supervision
- Sell to multiple clients at the same time
- Your product is customizable and can be tweaked as per need
- It can be managed by anyone
- You can work on individual client projects along with selling productized services.
4. Hybrid Consulting Model
A hybrid model is a combination of different consulting models. Most consultants don’t stick with a single business model rather they prefer offering multiple services in different forms to their clients.
For example, you work as a solo consultant and offer productized services to your customers. Or you can create a consulting firm and offer productized services to your clients.
The hybrid model is flexible and scalable. It gives you a lot of scopes where you can experiment with different services and products. It offers a lot of benefits including:
- Flexible and scalable
- Data-driven as you have to update your consulting business based on customer feedback and data
- Multiple revenue streams
- Passive income opportunity
- Serve multiple clients simultaneously
- Reach a bigger target market.
Step #3: Identify Your Target Market
In the words of Peter Ducker: “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”
Knowing and understanding your customers start with identifying your target market.
You must have a basic idea of what your target market is and who your ideal clients are at this stage. The purpose of identifying your target market is to:
- Set boundaries and decide where you will operate
- Know your ideal customers
- Understand the needs of your target market
- Develop buyer personas.
The best technique to identify the target market is to narrow down and choose one industry with low competition and high-profit margins.
For example, if you selected the social media marketing consultation niche, you need to identify a specific industry such as healthcare, finance, or SaaS. This focused approach to narrowing your target market helps you stay focused and become an authority quickly.
You can further narrow it down based on business size (small businesses vs enterprises), annual revenue, B2B vs B2C, geographic location, and several other factors.
You can grow significantly and become an authority if you are focused and work within a tight boundary with clarity. There is always room to expand your consulting business and move to other target markets but initially, you must stick with a single market with specific needs that you can serve best.
This helps you:
- Better understand your ideal customers
- Create a clear value proposition that aligns with your target market
- Understand your target market needs
- Get first clients easily because you serve a niche within a large industry with specific needs
- Create accurate buyer personas
- Grow and scale your consulting business quickly
- Become an authority.
Step #4: Choose a Selling Platform
So far, your consulting business is merely a business plan. It is on paper yet. Once your target market is finalized, you need to pick a platform to sell your consulting services.
There are 3 things you need to do here:
- Create a website
- Choose a selling platform
- Create your offers.
A website is a must for running a successful consulting business. It is the face of your new business that helps you in marketing, branding and acquiring new clients.
A selling platform is different from your website. It is used to create and manage your products, manage your client base, manage payments and billing, and everything else related to your business.
Subkit is the leading consulting services platform that comes loaded with all the necessary and must-have features. It is free to use. You don’t have to pay anything for using the platform to sell your services. You only pay when you make a sale.
You can sell a wide range of products in a variety of formats on Subkit including consulting services, physical products, content, session products, and bundled products. It supports cross-selling, product bundling, email list management, and a subscription pricing model.
The best part: It takes hardly 10 minutes to set up your consulting services business on Subkit. It is easy to use and extremely flexible. Add products, and set prices.
Subkit offers full support for all the following:
- Payment processing
- Recurring billing
- Referral program
- Email marketing
It is an all-in-one platform that lets you create and sell multiple types of consulting services products such as productizing, one-to-one sessions, recorded sessions, digital content, subscriptions, and more.
Subkit simplifies selling consultation services to prospective clients. Create your free account and set up everything in a few minutes.
Step #5: Set Price for Your Consulting Business
Setting the right prices for your consultation services is crucial. Your pricing strategy decides the fate of your consulting practice. Once you have signed up with Subkit and created your consultation products, you need to come up with a robust pricing strategy.
The best consulting pricing strategies are:
- Hourly rate
- Flat fee
- Monthly retainer (best)
- Value-based pricing
- Result-based pricing
1. Hourly Pricing Model
The most popular pricing strategy for a consulting business is the hourly rate. It is a simple and widely known and accepted model.
Initially, when your business is new the best way to charge your consultation clients is by the hour. It is hard to decide on an exact fee for a project due to a lack of experience. A miscalculation can lead to an underpayment.
The only issue with the hourly rate is that clients often complain about the duration of a task that took longer than they expected. A good consultant usually shares an estimated duration for a task (so the client knows how much it will cost upfront).
Hourly rate, however, works best when you are offering one-to-one sessions or when you sell consultation services by the hour (e.g., 30-minute consultation call).
2. Flat Fee
A flat fee for consulting service or a productized service is possible when you have ample experience in consultation. You can offer services for a fixed fee in the form of digital content or videos.
The problem with fixed-price projects is correct price estimation. You don’t want to get underpaid or overcharged and lose a potential client.
Clients love flat project rate consulting services because it is transparent and there is minimal concern about the scope and length of the project.
3. Monthly Retainer
Probably the best pricing model for consulting business is a monthly retainer or subscription. You charge a fixed fee per month in exchange for consulting services.
It creates a predictable revenue stream, so it is best when you are interested in passive income.
However, you need to convert your consulting services into a subscription-based product. This will make your consultation passive in the true sense.
For example, marketing consultants can create strategy subscriptions where your client can send a monthly marketing plan to you for review and evaluation. You can send your clients a detailed report for the marketing plan and hop onto a live consultation session for an hour from your home office.
The big question is what products to create and how much to charge for them.
This is something you will learn over time as you develop trust with your clients. You can create a monthly retainer package for them and switch them to it. The best technique is to convert your best services into monthly retainers and start making passive income.
4. Value-Based Pricing
You can charge your clients based on the value your consultation generates.
If you are offering consultation services on marketing to small business owners, it might add monetary value of a few thousand dollars. However, if you offer marketing consultation to a CMO of a Fortune 500 company, the value is gigantic and might be in the millions.
Linking your consultation fee with the value isn’t easy though. It requires detailed meetings and conversations with your ideal client. You need to understand their problem and how your consultation might help them and then decide its value.
You can adjust your fee based on the value and can charge a lot as compared to the hourly rate or a flat fee.
5. Result-Based Pricing
You can charge your customers based on the results your services generate for them.
This pricing model is risky and isn’t available for all types of consultation services. It is risky because your pay is result-driven. This means two things:
- You must have a proven way to track the impact and result of your services with extreme accuracy
- You don’t get paid a penny if your client doesn’t see any positive outcome.
Clearly, you can’t use this model with certain consultation types where there isn’t any direct involvement of revenue or where it is impossible to track monetary value. For example, management consultation and human resources consultation.
This pricing model works best for marketing, sales, finance, career, branding, etc. These are the services where you can track progress and results.
You must have a proven consultation model that you are sure to deliver results before you move to result-based pricing. And this requires a lot of experience in the consulting industry.
What’s the best pricing model for your consulting business?
The best approach is to use a hybrid pricing model.
Start with a monthly retainer. Then gradually add more flat fee projects, value-based, and result-based models.
Thanks to Subkit which supports all types of pricing models.
Step #6: Market to Potential Clients
Creating a website, creating your products on Subkit, and setting a pricing strategy might not bring potential customers. You need to market and promote your consulting business to acquire new clients.
Here is a list of the best marketing techniques to promote your own consulting business:
1. Prelaunch Marketing
One of the best ways to get new clients for your consulting business is with a prelaunch marketing strategy. You need to create buzz, awareness, and hype for your consulting business well before it is officially launched.
This gives you motivation. Once you get clients, you can use other marketing tactics (discussed below) to acquire new clients. In the absence of a prelaunch marketing strategy, you might have to wait for weeks or even months before you get your first client.
It gets frustrating.
So, you need to start marketing your consulting business as soon as you have finalized your niche. Don’t wait. The marketing strategies and techniques we have discussed in the next sections should be started as early as possible.
Subkit support prelaunch plans with its Waitlist feature. You can send potential clients to your waitlist where you can keep them updated about the progress. When you officially launch your consulting business, these clients will be your first customers.
2. Content Marketing
Content marketing helps you drive organic traffic from search engines to your website and blog. You can rank for relevant keywords in search engines and drive targeted traffic to your consulting website.
This means you need to launch your website early and start publishing high-quality content in the form of blog posts. Your website is where you can announce and promote your prelaunch and consider offering a discount for early registration.
Follow these tips to use content marketing to get new consulting clients for your business before and after prelaunch:
- Identify a list of target keywords that your ideal customers use to find your consulting business. Use a keyword research tool like Google Keyword Planner, Ahrefs, or Semrush
- Write helpful and well-researched articles around these keywords. Your focus should be to help your target audience (aka readers). Solve their problems by offering expert advice and opinion
- Follow on-page SEO best practices to rank in search engines for your target keywords. You can drive targeted traffic to your website and articles
- Promote your articles on social media platforms to let people know.
3. Online Ads
The traffic from content marketing needs time. The content on your blog might not drive traffic instantly and it may take more than 6 months to rank in search engines.
However, if your domain has high domain authority/ranking and you use good keywords you can get indexed quickly. If you are not sure about this, Subkit offers a service that will help you find the best keywords and you will be able to leverage their high domain authority while you build yours.
If you need instant traffic, you need to use PPC ads. Digital advertising works best for prelaunch marketing because you can get heaps of traffic to your landing page. However, it isn’t free.
Pay-per-click ads cost you money and you pay for every click your ad receives. You can run an ad campaign with a search engine (Google Ads and Bing Ads), or you can use social ads (Facebook Ads and LinkedIn Ads).
For example, if you want to target large corporations for your consulting business, you should consider running an ad campaign on LinkedIn where you can reach businesses of all sizes based on your specific targeting requirements.
You can run a PPC campaign for as low as $10. You don’t have to invest a lot of money to run an ad campaign. Give it a try to promote your consulting business to acquire new clients.
A lot of consultants use outreach emails to acquire new clients. This is a proven technique to get new customers.
For example, if you are an HR consultant and your target audience includes HR professionals, what you can do is get the contact information of HR professionals including their names, designations, companies, email addresses, and more. You can do it manually or hire someone from Fiverr to do it for you.
Then you need to send outreach emails and pitch your consulting proposal. You can use a template like this and offer your services.
The response rate might be low since you are sending an email without any prior connection, but it does work if your emails are personalized. You need to offer your consulting services as a solution to a key challenge they face.
You can also use outreach emails for guest posting. Reach out to top blogs in your niche and see if they accept guest posts from you. This is the easiest way to promote your consulting business, build authority, and acquire backlinks for your website.
Outreach email can be used for a wide range of marketing purposes.
5. Social Media Marketing
Social media has a lot of potentials. You can use it to get new customers.
The key to social media marketing is choosing the right social media platform. You don’t have to be on all the social networking sites. You don’t have to use the top social media networks either.
Use social networks that your primary target audience uses.
For example, if you are targeting businesses, you must use LinkedIn and Twitter. If you are targeting teens, you should use YouTube and Instagram.
The idea is to understand your target audience and figure out what social networking site it uses. This will help you get new customers quickly by engaging and connecting with the right audience on the right social networking platform.
6. Create a Referral Program
A referral program is the best way to acquire new customers at a minimum cost. It is a marketing technique where you give incentive to your existing customers for referring your consulting business to their friends and family.
It is the most effective marketing technique because people tend to trust recommendations from their friends and family more than ads and recommendations from influencers.
Once you start getting consulting customers, you need to create your referral program. Subkit has a built-in feature for referral programs. You can create a two-sided referral program where you can set up appropriate incentives for both referrers and referees.
When setting up your referral program, focus on one thing: Incentive.
Your incentive should be valuable. Monetary incentives work best. For example, you can waive a month’s subscription fee for the referrers or you can offer a 50% discount on the next purchase. These types of incentives compel your existing customers to take the pain to invite new people.
Networking events are best for building connections, and this leads to getting new customers. Join different types of local and international events that are related to your industry and niche.
You don’t have to go to every event. Instead, events, where you have a high chance of getting new consulting clients, should be your preference.
Niche forums like relevant subreddits and question-and-answer platforms like Quora are also great ways to build your network, find customers, and gain authority.
For example, you can join 3-5 highly specific niche forums and start responding to threads. Help members by offering free expert advice. This helps a lot in establishing authority, and you can acquire clients in the long run.
Step #7: Scale
Scaling is a key issue with consulting businesses. It gets hard to scale your business when you work as an independent contractor.
The most important factor for scaling a solo consultant business is your pricing strategy. You need to create subscription-based consulting services that you can sell on autopilot. This helps you generate passive income and grow your business exponentially.
If you stick with the basic consulting model where you engage in one-to-one sessions with your clients, scaling will become too hard.
The subscription pricing model is the way to go.
Here is how to create subscription-based services for your clients:
- Analyze what type of consulting services your clients love
- Get feedback from your clients on what services they like to receive on regular basis for a fixed monthly price
- Constantly tweak and improve your subscription services based on sales and customer feedback
- Use data to come up with monthly retainer packages.
Take the First Step Now
Starting a consulting business gets easier when you know the exact steps to success. We laid the end-to-end process in this 7-step guide that’s sure to help you get started.
You need to take the first step.
Subkit offers all the tools and resources to start your subscription-based consulting business and sell them online hassle-free at zero cost.