Consultants come in many different types with specialists in hundreds of niches using thousands of varied skills and techniques.
Other businesses hire consulting experts because they want to “buy in” expert opinions, ideas and resources that don’t exist in their organization already. If you have a proven track record of transforming businesses for the better, you can turn that into paid insight, exchanging your time and skill set for well-paid consulting jobs. Consulting provides deep insight to an organization without them having to hire expert staff on a permanent or long-term basis.
Due to the expertise offered by consultants, the rates charged are normally high. So a consulting business is a great business to start if you want to make a great income with minimal hours.
Here's what we'll cover in this guide:
Types of consulting business
Resources for your consulting business
The best legal structure for your new organization
Information on taxes and finances for your consulting business
Questions you should ask to see if you’re ready to start a consulting business
Some rules and regulations you will need to follow
... and much more
By the time you’ve read through our complete consulting business guide, you will have all the information you need to set up and manage a thriving consulting business. Let’s get into it.
Key Consulting Business Background Data and Statistics
The consulting industry is ripe with new opportunities for focused entrepreneurs, so now might be the perfect time to dive into starting your consulting business. Incfile is here to help you form your consulting business and understand the ins and outs of owning a consulting company.
The consulting space is dominated by several major businesses including PwC, Deloitte, Ernst and Young, Boston Consulting Group, McKinsey, Accenture, IBM and KPMG. But don't be deterred — there is still room for a small boutique consulting firm to do very well.
People are employed in the management and technical consulting services in the U.S.
The typical consulting fee an hour at entry-level and over 300 an hour for experienced consultants.
Questions to Ask Before You Start a Consulting Business
Is Consulting Entrepreneurship for You?
If you want to be a consultant, you need to demonstrate industry-leading expertise. You must bring unique insight, techniques, methods and experience to solving business issues in your niche.
As a consultant, you will be expected to get a very quick understanding of an organization's problems, spend time analyzing those issues and come up with practical examples of how to make changes.
Being a consultant is all about “demonstrating your value.” Businesses will be expecting excellent results for the fees they are paying, so it’s all about delivering in accordance with those expectations.
What Are the Main Skills, Expertise and Experience to Be a Successful Consulting Entrepreneur?
The specific skills, expertise and experience for a consultant depend on the niche you decide to go into, but here are some general guidelines:
What Are the Main Challenges for a Consultant?
Consultants come across many challenges. These start with finding clients — consultant services can be expensive, so building up a network of good leads and opportunities is vital. You will want to build up a robust pipeline of work to ensure your business is profitable.
Next, you will need to establish strong methods for working with people. Key skills include gathering information, carrying out analysis and making recommendations.
As business needs change, you must be flexible and adaptable. You will have to use your experience to understand what is going on below the surface of an issue and then use tools and techniques to resolve the underlying problems.
Finally, you need to deliver sustainable results. This means getting involved with project managers, business analysts and operations experts to check that your recommendations are being implemented in the best possible way.
Types of Consulting Business
Consulting is the practice of giving expert advice to others, normally in business, financial or technical areas. Clearly that’s a broad definition, so let’s narrow it down a little. Common types of consulting include:
Choose the Right Business Structure and Register Your Consulting Business
Now that you have all the background information for your consulting business, it’s time to make it into a reality. That starts by choosing the right structure or “legal entity” for your business. In the U.S., there are five main business structures. They are:
For most smaller consultant businesses, an LLC is the ideal business setup. It provides you with liability protection, is simple to administer and has some tax advantages over other business types. Additionally, if another consulting firm ever subcontracts to you (which does happen), they will definitely expect you to have a formal legal structure in place.
For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide.
We’ve got a complete guide to everything you need to do to set up an LLC, and we can start one for your consulting business today. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.