So you’re thinking about starting a consulting business. Good for you as consulting is very in demand nowadays. The versatility of starting a business such as this is unmatched by anything. That’s because there are tons of services a consulting business offers.
According to Statista, the consulting industry in the US is worth around $64 billion. With such impressive numbers, it’s only natural that you give it a shot. But before you do that, ask yourself these X questions. These questions will help guide you and figure out what field of consulting to specialize your business in.
What Are You Good At?
Since your goal is to offer professional advice on a specific industry, you need to identify what that industry is. And to easily do that, simply ask yourself what you’re good at. Consulting exists across many fields and industries. From accounting to digital marketing, the options are limitless.
But you need to focus on the area that you’re good at, are skilled in, and have knowledge that can help your clients succeed. This first step is very important so naturally, a bit of research can come a long way. The best consulting businesses are experts with years of experience. They’ve managed to build a successful company in a particular niche and then expand to other fields.
So your goal is to focus on one specific thing for the time being. Once you get good at it, you can then create a waterfall effect where existing and new clients will start hiring you for other services in other fields.
You might want to start a real estate consulting business where you’ll offer advice on all areas of real estate. But once you get good at it and people start noticing you, you can branch out into other fields connected to real estate. Sooner or later, you’ll be asked to advise on many niche topics like, is it better to buy or rent a property for college students.
Do You Need To Hone Your Skills?
Let’s say you’re an expert in your field. We can take digital marketing for example. You’re an expert digital marketer with years of experience and hundreds of satisfied clients. A consulting business in the field of digital marketing requires you to have a different set of skills.
As a consulting business, you will offer advice as opposed to running advertising campaigns. Your company will be hired to help those marketing strategies succeed and offer guidance. You won’t be behind a computer running Facebook Ads, you will be the person telling the digital marketer how to do it more successfully.
So ask yourself this, are you capable of doing that? Do you have what it takes to advise and speak publically in front of large groups for the purpose of training them? If you feel you lack these skills, then you should seek extra training.
Much like consultant training employees in a particular field, there are consulting businesses that focus on… well, teaching consulting. More so, seeking help to train the necessary skills to become a consultant will help you in numerous ways. Not only will you, hopefully, learn these skills, but you’ll receive constructive criticism along the way. Criticism is always important as it tells you where to improve and in what ways.
How To Charge?
This is a pretty subjective topic of discussion. A consulting business makes most of its money from retaining clients. Although new clients are always welcomed, if you manage to get a couple of clients constantly coming back, then you’ve put yourself in a great spot.
Consulting businesses can charge their services in three ways. The most popular one is to charge an hourly rate. Here is where stuff gets complicated. How much on average do consulting businesses charge by the hour?
To find the answer to that question, you have to look at each industry separately. For example, consulting businesses in asset management charge between $116 and $194 per hour. In the coaching sphere, expect to charge anywhere between $68 for IT, and $100 for career coaching.
But hourly charging isn’t even the most popular type. Most consulting businesses charge by project completion, while a retainer charge is also very popular. Each of these has its own set of advantages and disadvantages, so you should do your research to determine which path to go down.