What Tools Do You Need to Start Your Own Consulting Business
Whether as a primary or supplementary source of income, starting a consulting business is a fantastic way to market on your existing skills and interests. A consulting business allows you to remain in control of your employment life, but it also puts all the responsibility on you to remain gainfully employed in this new venture. Therefore as with any new business, success in a new consulting business requires starting with the right set of tools.
Before getting to the tools out there in the world you’ll need to gather to start your own consulting business, there is a separate set of tools you’ll need first if your business is to ever succeed. This prerequisite set of tools are inner tools, that is knowledge, skills and, above all, desire.
If you need training in any areas, it’s best to know now and get a move on it before it comes around to sabotage you later.
Before venturing to start any business, consulting or otherwise, a person should always take the time to ask themselves some serious questions…and answer honestly. Questions such as:
- What skills you have to offer as a consultant? (IT, fundraising, design)
- What skills do you have to run a business? (marketing, accounting, HR)
- Are you willing to work long hours? Collect overdue payments?
- Are you willing to go out and network? Conduct your own marketing, including market research?
In short, a consulting business requires you wear two hats at once: Consultant and Business Owner. And both roles have to be up to par. Fortunately gaps in skill and knowledge can always be filled if the desire and willingness are there. But if you need training in any areas, it’s best to know now and get a move on it before it comes around to sabotage you later.
A Consulting Business Plan
The best businesses start with a plan. A good idea is only that – a good idea – until it’s put into action, and the most reliable way spur effective action is with a plan. But more than that, when you go out looking for startup capital to fund your business, the people you’ll be asking for money are going to want to see your business plan.
Creating your business plan also gives you time to address all the foreseeable challenges ahead before you’re presented with them. For example, will you be consulting people one-on-one or in groups? Where will you perform this consulting? Who is your competition and what makes you different? How do you plan to dominate this competition? Who is your target demographic: the social/economic profile of your ideal and anticipated clients? And how do you plan to reach them?
This is also a good time to give due consideration to your consulting business name. Will it be your own name or some catchy combination of words? When choosing a name you have to think of how it will be perceived by your market niche. And you have to be sure you have the right to use that name in your jurisdiction. As for trademarking your own business name, it’s highly expensive and not usually necessary unless you’re a big corporation; plus filing your business name with your paperwork (see The Legal Stuff, below) will give you the right to use that name legally in your jurisdiction (unless legitimately contested in a court of law: hence, research.)
The work you put into your business plan before you start operating business will reward you with the two greatest boons a business owner can hope for: sustainability and growth.
Forming a Consulting Business: The Legal Stuff
To make a business legal you need to file paperwork with the state or county in which you plan to operate and with the federal government. This will give you your all-important business license and tax ID number.
In order to file this paperwork, however, you’ll need to determine the legal structure for your business. This is for several reasons:
- So the government knows how to tax you
- So that you and your employees know how to manage and operate the business
- So that your degree of personal liability for the business is legally established
- So that you can defend, if necessary, any attempts to infringe upon your business name
Research the following legal structures to determine the right and best one for your business: sole proprietorship, partnership, corporation, s corporation, or LLC. Once you’ve figured this out, you’ll file the appropriate paperwork with the appropriate government entities (IRS and usu. county offices) and receive your business license and tax ID number. With these two items in hand, your business now officially exists.
Once you have your business license and tax ID number you can now go to the bank or credit union and set up a checking account for your business: another indispensable business tool.
Setting Up Office
While you’re taking care of all this, another task needing of your time is setting up office. Where do you plan to conduct your business?
Are you running it out of your home? Before deciding, ask yourself: Is that going to be sufficient when you have to meet with clients? If you’re consulting online and only corresponding with clients by email, phone, fax, IM, etc. then a home-based business is fine. But if your business involves meeting people in person, having a hospitable office space for them to visit presents you in a more professional light. The alternative is always making “house calls” or setting up meetings at Starbucks.
If you’re setting up a home office, is it a room that can be dedicated to your business or does it have to be shared part time? Does it have it’s own entrance? These are some of the questions many jurisdictions ask before signing off on a home office.
On the other hand, if you’d rather set up an office somewhere outside your home, you’ll have rent and a lease and landlord to think about. This requires perhaps a bit more up front capital than a home-office or home-based business.
How to Become a Successful Consultant
Wherever you decide to set up shop, there are certain tools you’ll need to furnish the office with in order to use it to run a business. Presumably you’ll have a desk and a chair where you can conduct your work. A file cabinet and some shelves may be helpful too. And, of course, decent lighting is essential. From there, other essential business supplies any office should contain:
- phone(s) – best is a land line w/answering machine at the office and a cell phone w/voice mail for the road
- business letterhead – on quality paper
- business cards
- business email address – separate from your personal one
- calendar/scheduler/planner – at least on your computer if not a wall or desk version too
With these essential items you’ll be able to perform all the basic administrative functions necessary to run your business.
With these tools in your arsenal, your consulting business has every shot at providing you with a lifetime of self-sustainability
And if you want to take it a step further, consider coming up with a nice, quality marketing brochure presenting your business, it’s mission and services. A brochure (done right) demonstrates a level of professionalism and commitment to your business and offers more sticking power than a business card alone.
One other thing on your office space: if your planning on meeting clients there, a comfortable place for them to sit is also essential. As for a waiting area: if available, it’s a nice way to ensure that you’re ready for your meeting before it begins, but whether or not you have one, always good to have on hand is some drinking water, maybe coffee or tea and a nearby restroom.
Website Or No Website
Is a website a necessary tool for a consulting business? Not quite. But is it an invaluable tool for most businesses today of any sort, including consulting? No doubt!
Remember, these days most people are not using the Yellow Pages to find service providers. In the Internet age, you should expect that most people looking for a consulting business are searching for it online (probably on Google.) Of course that varies somewhat depending on your target market niche. The elderly, for example, or the technological inept will probably not be looking for help online.
Your marketing budget also plays a role in this decision. If you can afford to advertise in publications or media (think: local paper and radio) that is more likely to provide you visibility with your niche, you may get away with not having a website.
But even if you don’t have a website, or don’t have one yet, you should at least be searchable online. That means: list your business with the online yellow pages, Google and Yahoo Maps, and portal sites related to your trade. That way when someone searches for a consultant of your type in your area, they may not get a full-on website but they’ll at least see your business listing.
With these tools in your arsenal, your consulting business has every shot at providing you with a lifetime of self-sustainability…and maybe some personal fulfillment as well.
How to Become a Successful Consultant
Tim Wilson is Content Manager for HostPapaInc. a green website hosting company serving over 100,000 customers around the world. Since launching in 2006, HostPapa has offered reliable, budget-friendly, easy-to-use web and mobile solutions for small to medium-sized businesses.
Thats awesome addition of Google Voice, Loosecube, Openspace and Google Hangout. This post is written for general audience (Having some cash in hand or on shoestring). So your comments would certainly a nice addition. Thanks Jason.Source: www.consultingsuccess.com
Category: Personal Finance