Companies are always on the lookout for fresh ideas and expert advice to solve their toughest problems. That’s why the U.S. management consulting industry grew from $272 billion to $374 billion between 2013 and 2023—a gain of more than $100 billion. If you’ve got skills to share and a drive to succeed, starting a consulting business could be your chance to grab a piece of the pie.

In this article, you’ll find out how to start a consulting business step by step. You’ll also learn about everything from the different types of consultants to typical costs and earnings.

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What Is a Consulting Business?

A consulting or consultancy business is a professional service that offers expert advice in a particular field. As the owner, you’ll work with big and small businesses in your industry to improve performance. This could involve analyzing their current situation, finding issues, and recommending solutions. Your clients might need help with anything from cutting costs to expanding into new markets. The aim is to use your specialized knowledge to guide businesses toward better results.

Consultants usually work on short-term projects for multiple clients. That means instead of being an employee at a company focusing on one project, you work with multiple companies. 

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What’s the Difference Between Consultants and Contractors?

Since the concepts are somewhat similar, it’s easy to confuse the terms “consultant” and “contractor.”

Contractors are independent workers hired to complete a particular job. This could be designing a logo or writing an article. Consultants are brought in for their expertise and advice. Their job is to analyze situations and suggest improvements.

Contractors are usually self-employed. Consultants may work independently as contractors or as part of a consulting firm.

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Types of Consulting Services

Consulting covers a wide range of specialties. Let’s take a look at some of the most common types:

Management Consultants

Management consultants help businesses improve their performance and efficiency. They work with company leadership to develop strategies and streamline operations. 

They might also analyze current business practices or implement new management techniques to help teams work together better.

Financial Consultants

Financial consultants are the number crunchers who help businesses optimize their money. This could mean creating budgets, planning investments, or finding ways to cut costs. 

Financial consultants might also help companies prepare for major changes. These might include buying another business or going public on the stock market.

IT Consultants

As technology continues to rapidly evolve, many companies rely on IT consultants to stay ahead. They help businesses choose and use the right technology. This could involve setting up new computer systems or managing IT infrastructure. It might also include fortifying the company’s cybersecurity defenses.

Marketing Consultants

Marketing consultants help businesses get noticed and attract more customers. They might create advertising campaigns, develop a company’s brand, or find new ways to reach potential buyers. With the rise of digital marketing, many marketing consultants specialize in areas like social media or search engine optimization (SEO).

Human Resources Consultants

People are often a company’s most important asset. HR consultants help businesses manage their workforce more effectively. This could involve improving hiring practices or creating training programs. It might also mean suggesting ways to keep employees happy and motivated.

Operations Consultants

These consultants focus on helping businesses run more smoothly and efficiently. They look at how a company operates and suggest ways to do better. This might involve streamlining production processes or improving supply chains. Another core component is finding ways to cut down on waste.

Legal Consultants

Legal consultants help businesses navigate the complex world of laws and regulations. They might advise on issues like contracts and intellectual property. These consultants often work closely with the company’s lawyers to spot potential legal issues early.

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6 Steps for Starting a Consulting Business

So, you’re sold on the idea of striking it out on your own. But where do you begin? Here’s a step-by-step guide for turning your expertise into a thriving consulting venture:

1. Identify Your Niche

First things first: Figure out what kind of consultant you want to be. What are you best at? What problems can you solve for businesses? Pick an area where your skills and experience can really shine.

2. Research the Market

Before you jump in, take a good look at the consulting world in your field. Is there enough room in the market for your services? Are there enough potential clients in your area? Can you offer consulting remotely? This research will help you understand where you fit in and how to stand out from the crowd.

3. Make a Business Plan

Next, it’s time to get your ideas down on paper. Making your vision concrete is the first step toward making it a reality. Your business plan should include details about the services you’ll offer, how much you’ll charge, and who your ideal clients are. Don’t forget to think about your expenses and how much income you’ll need to keep your business running.

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4. Get Registered

Register your business with the appropriate authorities to make it official. This usually means getting a business license and possibly setting up a business structure like a sole proprietorship or an LLC. While you’re at it, check if you need any special permits or certifications for your type of consulting. Getting your ducks in a row from the start will help you avoid legal issues down the line.

5. Get the Word Out

It’s time to shine a spotlight on your brand-new consultant business. Start by creating a professional-looking website that explains what you do and why you’re the best at it. Get active on social media, especially LinkedIn. Share your knowledge through blog posts or videos to show off your expertise.

6. Network and Build Relationships

Who you know can be just as important as what you know. Tap your existing network for referrals from other professionals familiar with your work. Build your network by attending industry events and joining professional organizations.

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What Are the Costs of Setting up a Consulting Business?

Since consultants focus on giving advice and expertise, you often don’t need a lot of expensive equipment or inventory to get started. Your most valuable asset is your knowledge.

However, some types of consulting might have higher startup costs. For example, IT consultants might need to invest in specific software or hardware. And in fields like insurance or real estate consulting, you might need to pay for special licenses or meet certain legal requirements.

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What Is the Average Business Consultant Salary?

According to salary.com, the average consultant in the United States makes about $110,000 a year. However, there’s a huge range in consultant earnings across industries, locations, and experience levels. The highest-paid consultants can command hundreds of dollars per hour.

In the end, your earnings will depend on your abilities and how well you grow your business.

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5 Tips for Setting up a Successful Consulting Business

Beginning your consulting journey is an adventure, but turning it into a success story requires careful planning. Here are some tips to help your new venture thrive:

• Define a Clear Value Proposition. Figure out exactly how you can help your clients and why they should choose you. What makes your services special? Be ready to explain this clearly to potential clients.
• Gather Positive Testimonials. Happy clients are your best advertisers. Ask them to share their positive experiences with others. Their recommendations can help you win new business.
• Compile Case Studies. Show off your wins! Write about projects where you’ve helped clients solve problems. This proves you can walk what you talk. Bonus points if you can use the testimonials you collect.
• Stay Up to Date With Continuous Learning. The business world is always changing. Stay on top of your field so you can give clients the most effective and up-to-date advice. Attend workshops, read industry news, and consider taking advanced courses to stay sharp.
• Create a Strong Personal Brand. Your brand is how people see you and your business. Develop a professional image that highlights your expertise and values. This includes everything from your logo to how you present yourself online and in person.

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Stay On Brand, Look Professional

Take your new consulting venture to the next level by presenting a polished image in all your client interactions.

Our estimate and invoice templates are fully brandable to your business. We never add our own watermarks, so your invoices always look professional and match your brand. Start with one of our clean, modern template designs, then simply add your logo.