6 Steps To Take Before You Start A Consulting Business

1
Build up Your Rolodex

Retiree checking his linked in profile for updates.
Use technology to stay connected to key people who can help your consulting business take off. Connie J. Spinardi / Getty Images

If you want to start a consulting business, best to start planning a year or two ahead if you can. Build relationships within your current work environment with colleagues, suppliers, competitors – anyone who will be a good contact for you when you head out on your own.

Use professional networking websites like LinkedIn to connect with others in your industry - it's a great way to stay in touch with key people and seek introductions. The best rule is - if you meet - connect. You never know who you may want to reach out to later, and online tools make it easy to find people from many years prior.

2
Find Your Niche

Consultant sharing his knowledge with a younger apprentice.
Consulting that provides opportunities to mentor young businesses can be quite rewarding. Hero Images / Getty Images

What service needs are missing in your industry? Where do people struggle the most? This is where your biggest opportunities can be found. List your strengths and areas of specialty. Who can benefit the most from this knowledge? This is your ideal client.

Don't try to offer something to everyone. You will be a far more successful consultant by applying your expertise to a niche market that needs what you have to offer. In this way, you can tailor your services so they really add value to a specific group of people or businesses. Once you define what you do and who you do it for in a succinct way you'll find it also makes it far easier for other people to refer your services.

3
Practice a Set of Talking Points

Man looking at his posty notes.
Get your message clear and your consulting business will be easier to build. Blend Images / Diego Cervo

Think of talking points like 30 second sound bites; short, concise descriptions of what you do and how you do it. Getting these down is key to the success of your consulting business.

These talking points should highlight the reasons you are different than other consultants in your field. The first thing you should talk about is the value you bring to your clients. How can you help them? What will they experience after using your services? What will they gain from you? You will want to practice saying these points out loud and be sure to time yourself. Enlist family and friends to listen and offer constructive criticism so you can refine your message. And remember, a good consultant spends more time listening than talking, so build questions into your presentation so you can spend plenty of time listening.

4
Build Templates for Proposals

A file folder with frequently asked questions.
For best results get your forms and templates in order. porcorex / Getty Images

To be an effective consultant you need to be efficient. You don’t want to reinvent the wheel each time you do a new proposal or project. This means you must design forms and fill in the blank templates. For example, maybe you need data gathering forms or a form for a set of onboarding questions that you always ask.

Using templates will ensure your work always has the same look and feel and covers all of the relevant points. It can also be a great way to be consistent in your approach so the quality of your service stays at its best. And be sure to have a one-page description of you and your services that can be emailed to prospective clients. I like to use a "Frequently Asked Questions" format.

5
Lay Out Your Pricing Structure

Businesswoman smiling in a conference room.
As a consultant, you are the product, price your time accordingly. Sam Diephuis / Getty Images

Put your pricing structure in writing. This may require some analysis as to how long a standard project will take and what outside resources you'll need to pay for. You have to have this down because when someone asks “How much?” you want the answer to roll easily off your tongue.

Don't under-price either. Your time is of value. If you don't believe that then you need to revamp your service offering. People value what they pay for, so if you charge too little, people may not take you seriously. You should also have a pricing template to use to help you estimate the time a new project will take - this can help avoid under or overpricing.

6
Know What Comes Next

Man signing a consulting contract
A contract solidifies the agreement and spells out next steps. Vincent Hazat / Getty Images

When someone says yes, you want to be ready to go. Lay out the sales and design process. Have contracts ready. The worst thing is when someone says “yes” and you realize you have no idea what to do next. Be prepared and ready so when they say “yes” you can lay out a timeline and expectations for how the process of working with you will go from start to finish. Consider using a "welcome email" or packet that tells them what to expect. 

Conclusion: Before starting up a consulting or free-lance business, take the time to plan ahead. Set your goals, take actionable steps, and review you plan frequently to ensure you are making the right adjustments along the way.