How to Set Up a Consulting Business

When you think of consultants, busy schedules, high-profile clients, and lucrative salaries come to mind. But why do these companies pay consultants so much for advice or even seemingly small tasks that could've been done in just a few minutes?

Have you heard the phrase: “You owe me for the years, not the minutes”? That’s exactly why. Consultants have dedicated their careers to offering years of experience in a specific area to businesses and entrepreneurs who need their expertise.

If you’re passionate about helping others succeed by providing niche expertise honed by years of education, experience, and skill development, a career in consulting may be for you. We’ve compiled this guide to dig deeper into the world of consulting — including how to start and market your own consulting business.

What is consulting?

Consulting is the process of providing expert advice, opinion, and/or strategies for a fee. Whether individual or firm-based, consultants specialize in a niche industry or trade.

Consultants are experts in their field. They possess knowledge so valuable that someone else — an individual, department, or entire organization — is willing to pay for it. Consulting can include a wide range of activities beyond simply giving advice, including problem diagnosis, data collection, feedback, strategy-building, and implementation.

Sometimes, business leaders need a new set of eyes when approaching an issue. As a consultant, you can provide that unbiased perspective. Consultants and consulting firms are highly sought after for their fresh perspectives on a pressing business problem or challenge.

Simply put, consultants work to make their clients more successful. This can require a lot of work, which is why the consulting business is so lucrative.

Consultant vs. Contractor

If you were to open your own consulting business practice, where would you stand?

You may have heard the words consultant, contractor, and even freelancer used interchangeably.

While all of these parties work with businesses, versus being employed by them, that’s about where their similarities end.

Contractors (including freelancers) are self-employed workers that companies contract to provide services. Consultants primarily provide assessments and expert advice. They can be self-employed or employed by a consulting firm.

However, if, as a consultant, you were asked to provide a service or deliverable, you could be hired into a contractor-type role.

Let’s say you were hired to assess a sales team’s performance. Upon initial assessment, you recommend a new sales strategy and training plan. If you were then asked to draw up and deliver this written strategy, you would be considered a contractor (in addition to a consultant).

Consultants exist in practically every field. Let’s discuss the different types of consulting in which you can specialize.

Consulting refers to a variety of specialists in virtually infinite industries.

In this section, we’ll unpack some of the most sought-after types of consulting practices, any relevant niche opportunities that fall under them, and what your career in these respective trades might look like.

1. Management Consulting

Management consulting is the most common type of consulting and includes many different niche consulting careers under its umbrella.

Firms like McKinsey, Bain & Company, and Deloitte primarily work in management consulting. It’s a $329 billion industry — at least, where it stands as of 2023.

As a management consultant, you would work with business leaders to help their companies run smoothly. This typically involves assessing certain processes and providing advice on improving or implementing new ones.

Not all management consultants are the same. Some follow a generalist approach and assess each organization as a whole, and some specialize in more specific departments or fields.

2. Strategy Consulting

An important subset of management consulting, these consultants review key business strategies and provide expert advice on improving or developing new ones.

Strategy consultants are typically experts in a certain industry or field and advise on high-level, strategic business decisions, such as company vision, resources, and investments.

3. Operations Consulting

While strategy consultants primarily work with the “why,” operations consulting addresses the “how.” These consultants handle procurement, outsourcing, supply chain management, and more. Operations consultants may also offer implementation and deployment services to help clients put their new processes to work.

4. Financial Strategy Consulting

Financial consultants work in corporate finance, financial restructuring, risk management, and even real estate. These consultants, or advisors, help businesses make informed, objective, and legal decisions to improve returns.

All financial consultants must meet certain requirements and obtain a license to offer financial advice.

5. Human Resources Consulting

These specialists address HR processes, including training and development, conflict resolution, management philosophies, benefits, and employee satisfaction. HR consultants serve the purpose of helping companies hire and retain remarkable employees.

HR consultants also ensure businesses are following legal and ethical personnel practices.

6. IT Consulting

Information technology (IT) consultants implement and manage new technologies, such as systems integration, software development and management, and enterprise architecture.

This consulting division is highly specialized and lucrative, worth almost double the management consulting industry — $666 billion. As an IT consultant, you might help businesses determine what software to invest in and how to use it to meet goals.

7. Business Consulting

Business consulting is a broad term for specialists who work with businesses on anything from financial advising to training to layoffs. (You’ll see that this category overlaps with others in this list.)

As a business consultant, you’d typically work with small to mid-size businesses (SMBs) — instead of management consulting, where you’d work with enterprise-level companies.

8. Sales Consulting

Sales consultants work to improve sales teams' performance, regardless of size or industry.

As a sales consultant, you’d typically work in sales training and development. You could also be brought on for other purposes, such as choosing a CRM, improving the sales process, or boosting team morale.

With sales being considered one of the most important parts of a business, financially speaking, quality sales consultants are highly-valued and sought-after.

9. Marketing Consulting

Marketing consultants evaluate a business’s marketing efforts and provide guidance on improving strategies to meet goals and bring in revenue.

As a marketing consultant, you might specialize in a certain field of marketing, such as content marketing, PR, or social media marketing. Or, you might focus on a niche marketing process, such as defining target audiences, customer acquisition, or brand awareness.

10. Environmental Consulting

Environmental consulting is particularly important as companies work to reduce their permanent impact on the environment.

As an environmental consultant, you may advise businesses on how their practices affect the environment around them and often work with industries like construction, waste management, real estate, and energy (but can be hired by any type of company).

11. Financial Consulting

Financial consulting overlaps somewhat with the financial strategy consulting we discussed above. The main difference, however, is that this category also includes independent financial consultants that work with individuals, families, and entrepreneurs.

As a financial consultant, you may help with everything from day-to-day expenses, investments, and taxes to cash-flow issues, insurance, and financial legalities.

12. Career Consulting

As a career consultant, you may help clients with skill development, resume building, job applications, interviews, and understanding the job market as a whole.

Individuals and businesses use career consulting to equip themselves or their employees to grow in their jobs. Career consulting may be for you if you have a background in HR or recruiting.

13. Healthcare Consulting

The purpose of healthcare consulting is to maximize the impact and output of healthcare organizations.

Healthcare consultants are management consultants that work in the healthcare industry. They analyze an organization's personnel, profits, and processes and advise on how to improve and solve pressing challenges.

14. Diversity, Equity, and Inclusion Consulting (DEI)

It’s not uncommon for companies to find themselves lacking the specific skill set that diversity and inclusion consultants bring. Hiring an HR consultant is simply not enough to overcome bias in an organization. That’s what makes DEI consultants some of the most sought-after professionals.

As a DEI consultant, you’ll bring an objective point of view to businesses’ equity problems — especially those that involve personnel and culture. If you have a background in HR, psychology, or nonprofit management, you may find that DEI consulting could be your next career move.

15. Public Relations Consulting

While public relations might be a staple in enterprises, the function is often coupled with marketing and communications in smaller companies. But public relations is a discipline all its own, and unfortunately, that fact is usually realized in the middle of a crisis.

As a PR consultant, you might work on a retainer to help plan for crises before one occurs, or you may be brought in during the middle of one to determine a company’s best course of action to work with the public and media.

16. Brand Consulting

Brand consultants may work closely with marketing and sales consultants to bring products to market and adjust prices. These professionals offer creative expertise to position a company in a certain way in the minds of consumers.

As a brand consultant, you’ll assess where a brand currently stands. Competitor analysis, research, and design may fall under the scope of work, but if you prefer to specialize in one area, that’s an option.

Are you specialized in a certain field or niche industry and believe you could offer quality advice to others? You may consider opening your own consulting business.

Here are six steps to follow to start a consulting business that helps both you and your clients succeed.

1. Assess your skills and strengths to choose your niche.

Before anything else, brainstorm and define what skills and strengths you believe would make you a good consultant.

What makes you an expert? What do you love to do and talk about? If you had to stand in front of a classroom and teach on any subject, what would that be? What do your friends, family, and coworkers ask for your advice on?

These are just a few questions to ask yourself to consider what skills and strengths would make you a qualified consultant. Jot down your answer before moving forward.

If I were answering for myself, I’d say I’m an expert in writing and content marketing. I’ve worked in this field for my entire career and genuinely love creating content and helping others do the same.

2. Analyze your market needs and pain points.

Once you establish your consulting niche, you should better understand what industry and market you’ll be targeting. Following my example from above, I would target the marketing industry and specialize in content marketing.

Narrowing your market as a consultant allows you to understand your potential client's needs, challenges, and pain points. This can help clarify how you can use your skills to provide solutions.

Let’s say my target audience struggles with consistent content creation, SEO, and tracking published content. Defining these factors allows me to know precisely how I can help my clients (e.g., with writing, SEO, and metrics) versus simply saying, “Hey, I can help you with words!”

Just as you specialize in a certain skill set as a consultant, you should also specify what services you provide for your clients. This information can also help you better market to clients, which we’ll talk about below.

3. Develop your brand, website, and service offerings.

Next, create the external-facing components of your business. This includes your website, branding, and service offerings. These resources can help clients identify you from competitors.

Whether you identify your business with your name (e.g., Allie Decker LLC) or with another name (e.g., Content Marketing Consulting LLC), you should give it an official name and website to boot.

The other important part of this step is outlining how you work with clients and how much your consulting costs.

Whether you organize your services into clear-cut packages or simply list them, you should at least give visitors an idea of what you specialize in and how you can help them.

4. Open your business.

This step is more complicated than flipping a proverbial sign from Closed to Open.

First, consider the legal structure of your business. Legitimizing your business gives you credibility and direction when it comes to taxes, staffing, and other legal details.

Next, consider what tools you need to conduct business and connect with clients. These might include tools to help find new clients and jobs — like a LinkedIn membership — and video conferencing software like Zoom or Skype.

At this stage, you should also open a business bank account, invest in an accountant (and eventually an assistant), and order business cards with your branding and information.

Download The Complete Consultant's Success Kit to access eight free templates for planning, researching, and client onboarding.

5. Market your business to attract new clients.

Now that you’ve opened your business, it’s time to grow.

A consulting business isn’t a business without clients. Sometimes, you may find yourself selling your services to people who aren’t even aware they need them.

Consulting marketing can adopt a variety of marketing methods:

• Blogging.
• Webinars.
• Podcasting.
• Speaking and teaching.
• Social media marketing.
• Print or digital advertising.
• Referrals.
• Cold calling and emailing.

Regardless of how you promote your consulting business, invest in consulting marketing methods that will get you in direct contact with your potential clients.

Methods like blogging, podcasting, and social media marketing don’t necessarily draw a direct line to new revenue, but they are powerful for growing awareness and establishing expertise.

Once you get in front of potential clients, have an established elevator pitch and client proposal template ready to go. Half the consulting “battle” is providing advice. The other half is selling your advice in the first place.

As you grow your client base, use a CRM like HubSpot’s all-in-one CRM platform (which comes in a free version for small-to-medium businesses or a paid version for enterprises). It can help you keep track of client information as well as the context of your relationship with each client.

6. Stay organized and scale.

As you grow and master your consulting business, stay organized and consistent. High-quality results are the best way to incite referrals from previous clients — and referrals can be your best source of new sales.

In fact, as you build successful relationships with clients, don’t be afraid to ask for referrals for new leads.

Once a month or so, sit down and analyze your consulting business. Look at your client list, software tools, and other business practices. Analyze what’s working and what’s not.

Understand where you can cut extra effort and resources to ultimately save money. Lastly, subscribe to industry trends to keep your business relevant to the challenges and trends your clients face.

Starting a consulting business is a remarkable feat, but that’s not where the work stops. These five activities will help you grow your consulting business, too.

1. Conduct a competitive analysis.

If you haven’t done so already, conduct a competitive analysis of other consultants or consulting firms in your niche and area.

Examining your competition can be intimidating, but with the right mindset, you can learn how to grow and improve your consulting business. Moreover, you can identify gaps in the market and find new ways to improve their strategies.

How do they market their business? What consulting services do they offer, and how do they describe and bundle them? What are their prices and fees?

When you study what’s working for your competitors, you learn more about your clients’ customer journeys and how you can improve your chances of being hired over your competition.

2. Start a blog.

Blogging is a uniquely effective way to market your business, establish authority in your niche, and help your business organically rank online. Many people hesitate to start a blog because they don’t know what to write about. Well, we’ve compiled a helpful guide to help you pass that roadblock.

Download our free guide to starting a successful blog and receive an 8-part planner to get your blog up and running.

Another source of great blog content is your client base. Pay attention to what issues or questions your clients face and gather feedback about what information would be helpful to write and share.

In the same vein, blog content can also serve as sales enablement content — sharing a popular blog post or two with potential clients can help them understand why to hire you and what they may learn from working with you.

3. Share thought leadership content.

Like starting a blog, publishing thought leadership content can help you establish your authority. Consider platforms like Medium that already have an audience. Publish your most authoritative, data-driven content on there to boost your brand awareness.

You can also use tools like HARO to connect with journalists and bloggers looking for expert quotes, anecdotes, and stories for their content. Respond to queries to get your voice featured as a thought leader in your consulting niche.

4. Explore new consulting verticals.

Take a peek at your competitive analysis: Did your findings yield any verticals or specializations that your competitors are offering and you aren’t? Consider adding new verticals to your services to further differentiate yourself and grow your business.

For example, if you’re a content marketing consultant, you could consider introducing consulting services for email marketing and social media marketing. If you expand, just be sure you have relevant experience and expertise — don’t add new services for new business.

5. Network and make new connections.

Between social media, dedicated Slack channels, and online masterminds, you are the only thing standing in your way of making new connections and friends online.

Networking in person is pretty straightforward. But networking online... well, that’s a different story. Thankfully, with today’s technology, there are countless ways to network and make new connections.

One of my favorite spots to network is on Twitter. It’s the easiest platform to engage with folks and start interesting conversations. I’m also reminded of old connections that I can revive with a short Tweet or email.

Test a few platforms and programs and see which one helps you get connected, attract clients, and build a community.

Start Consulting Today

Consulting may be a fascinating, lucrative career, but it’s also a mindset. Successful consulting businesses begin with an individual or team of experts passionate about helping others.

Regardless of your firm's size, keep your passion and expertise centered and you’ll always find success. Top consultants are great at planning, presenting, and marketing their services. Start your consulting business plan by downloading our free consulting templates below.

Editor's note: This post was originally published in December 2019 and has been updated for comprehensiveness.