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5 Things to know before start a consulting services business

April 29, 2020 / Comments (0)

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Starting a consulting business is a great idea for anyone with specific subject matter expertise and also a way to transition from employment to self-employment.

Let’s say, for example, that you are a bookkeeper for a large company, you can transition into self-employment by offering your expertise to companies that do not have a bookkeeping function.

Starting a consulting business is a great way to begin your journey into the world of business as you are leveraging your own expertise and it is perfectly suited to people that have with what I term “technical expertise” and usually found in the professions of law, accountancy, and management consultancy…but it could be anything!

But before you contemplate starting your own consulting services business, I have outlined 5 points below for you to consider.

You should also take a look at my article:

“How to start a consulting business and help local business owners in your area (5 Steps & Skills to succeed as a consultant”

So let’s jump into the 5 key points:

1. Mindset

 

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Do you really have the mindset to start a business?

You will be leaving the comfort of your job, salary, benefits, and more importantly your employed working environment.

What I mean here is that you have a safety net and you shouldn’t ignore it because the days ahead are going to be tough and challenging — you might think I am trying to put you off and to be truthful…I am…in a nice way!

Here are the recent statistics for business failures in the first year.

I know only too well the pains and pleasures of starting a business and I have survived 3 recessions and a few other “events” that would have seriously tested the strongest of entrepreneurs.

You must understand that with any reward comes a great deal of risk and that is not only limited to the business risk but a personal one as well.

I’ve seen many a relationship fail because of business interests — including a few of my own.

It takes single-mindedness, focus, and skin thicker than a rhino to succeed in business…plus adopting the mindset that you will never, ever quit.

Are you ready?

2. Legal and compliance

 

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I have struggled with this area all of my business life and that is because it is mostly an ever-changing minefield.

One day you are legal and compliant with what you are doing and the next, you are totally the opposite and at least, that is how it felt to me.

With a consulting business, you have to be acutely aware of taxation issues and especially your own.

Now think of this — you start a business and luckily you land a major client from the start…and that client occupies so much of your time that they become your sole source of income.

And it’s a lucrative income.

So what’s wrong with that you might ask and the answer is “nothing,” but taxation issues may arise because of it.

You have to be aware of the IR35 tax issues in the above example if you are going to start your consulting business in the UK and you must make sure you are making every effort to ensure your business is a genuine one in the eyes of the government and that you are actively seeking new clients.

You must also ensure that you take the appropriate legal and professional advice to establish the correct legal entity from which to launch your business.

Many people skill these steps or shortcut them and I cannot emphasize the fact that you must get the appropriate legal and professional advice before starting out.

3. Research your idea thoroughly

 

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Information is key…but intelligence is turning that information into profits and at least in my opinion.

You can overthink things for sure, but you can never conduct enough research and if you want to stay at the top of your field you should be researching continuously.

You need to really understand the dynamics of the market that you are going to enter and let’s take the bookkeeping example that I began with.

It is not so much the bookkeeping services per se….but the other problems and issues that go with it.

Being able to really understand the problems that your clients face every day goes a long way to developing trust with them and it’s not that you need to understand every problem, just that you must be aware of them.

Think about this — you have one bookkeeper who simply advertises bookkeeping services and another who advertises not only bookkeeping services but addresses the implications of what happens if you do not do what is considered a simple financial task correctly.

Who would you choose?

I use research extensively before I embark on any sales campaign for either me or my clients and that keeps me ahead of the game and more importantly, ahead of my competition because I know that most of my competitors will not devote the time or effort to do it…that is if they even understand it in the first place!

Take research seriously and use it to power your business — forewarned is forearmed and this will give you a great insight into the next vital component…

4. Pricing

 

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I have always tried to offer the best possible service and at the best possible price.

Many people talk about “holding your price” and articulating value — I do it all the time…but I do this in conjunction with my deep understanding of market conditions as well as my ability to predict future trends.

You should do the same.

Price is all about value, but that value is perception — and on the part of the people who buy what you have to sell.

Todays’ economy is volatile and uncertain at best and you know that there is a global devaluation of currencies and in simple terms, it means that your hard-earned cash, is not going to have the same purchasing power moving forward.

Just look at the cost of goods and services overall and you know that they are not coming down and sure, there are huge price wars between rival supermarkets for example, but prices are not going down overall.

Take a look at the high street also and the big brand names you would have associated with the financial success that has now fallen by the wayside.

Unless you offer a luxury brand service you have to start thinking about the future and being ultra-competitive as in my opinion, there is no more room for the middle ground.

5. Systems and procedures

 

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A consulting business is a “doing” business, unlike a mentoring and coaching one, which is more advisory.

As an outside consultant, you need to make sure that you can not only leverage your expertise but deliver your services on time, within the agreed budget and more importantly document those procedures and processes that your client will demand.

I have hired numerous consultants over the years I have been in business and the ones I choose are able to very quickly explain to me that they can fulfill my need, deliver the results on time and show me a roadmap to the end goal.

It’s about giving the client confidence and when you walk in with a set of systems and procedures to show how you actually structure your problem-solving approach, as well as how you measure them, you will have a much greater chance of winning over those clients who are more skeptical.

Don’t also forget that you must also have your own internal systems and procedures to measure the performance of your business…and you must do this with brutal honesty regardless of success or any failings!

A consulting business is a great one to start and it’s one I started myself, offering staffing consultancy services to the technology industry and it is a business model I quickly fell in love with.

But, take your time to make sure it is right for you, and simply having the expertise to offer is not enough — you must also have the desire to run a business and handle everything that comes with it.

Neil Franklin

 

Neil-J-C-Franklin-Business-Coaching

Last modified: May 28, 2020

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