How To Start A Consulting Business

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Have you ever wanted to start a consulting business? But didn’t know where to start? Well, we have built a comprehensive guide that will run you through everything you need to know about starting a consulting business.

Let’s get started….

The good news is, it has never been easy to get a consulting business started. The ability to create a low-cost website, build your brand presence and reach out to potential customers is easier than ever before.

At the same time, however, the ease of launching a consulting business, combined with the shift if how people view work and their careers, has led to an increasing number of people to pursue consulting as a new line or work or business. You need to also make sure that you do your research and know exactly what to do in order to make your business successful. For example, it might be a good idea to get third party risk management, however, the decision is up to you.

In this guide, we will first look at what a consultant is (and isn’t), what a consulting business can look like, as well as the benefits and downsides of starting a consulting business.

Following that, we will then provide a step by step guide that looks at how to start a consulting business from scratch. This will involve looking at the following topics:

  • Finding an industry or niche
  • Creating a profile
  • Building reputation
  • Securing clients
  • Growing your client base

What Is A Consultant

Let’s get started by looking at what exactly is a consultant.

Well, according to the Business Dictionary, a consultant is a person who provides advice or services to another individual or company.

Therefore it is highly likely that the consultant has previously worked or studied in the field prior to decided to launch their own consulting business.

While it may seem from this definition that a consultant needs to be someone towards the middle or end of their career that certainly isn’t true.

In fact, one area particular area that has seen strong growth is people who are younger or earlier in their career leveraging their natural advantage and understanding of things like technology, social media, and emerging trends to start their own consultancy business.

What Is A Consulting Business

While we now comfortably understand who a consultant is it is worth pointing out that a consulting business can take on many different flavors.

There is no right or wrong approach for the type of consulting business you are looking to build. It comes down to personal preference, the expectations you set for the business and sometimes the capital or resources you have available to start it.

So what type of consulting businesses exist?

The Side-Hustle

Broadly speaking there are three main types. The first type of consulting business can also be known as a “side hustle” or “side-gig”. In this instance, you make a decision to continue working your main job while starting a consulting business on the side.

For example, you could be a Marketing Manager for a medium to large company and want to take advantage of the benefits and security that role offers. At the same time, however, working for a smaller, more nimble company excites you. Therefore you establish a consulting business to provide marketing insight and advice to these companies on the side.

Individual or Small Size Consulting Businesses

The second type of consulting business is a more established form of consultancy. It is where you establish a consulting business and work in it in a full-time capacity.

In this instance, you will typically look to secure a number of clients on a monthly retainer, or recurring contract. This provides some level of income security which will be important if working as a consultant is your sole source of income.

In this instance though, despite providing a full-time income, you have opted to keep the consulting agency small. Perhaps even limiting it to just yourself or one or two other partners. As a result, you don’t have ambitions to scale the consulting business to a level where it employs hundreds of employees or caters to a large number of clients.

This type of consultancy business is perhaps the most popular. Essentially the individual is leveraging their skills and expertise to move out of a corporate role and instead work in a more flexible (and engaging environment) across a number of clients.

Consulting Businesses Built To Scale

Finally, the third form of consulting business is one where you look to scale beyond your own knowledge and expertise and seek to grow the company to a size where you can hire a team.

In this instance, you will often look to start a consulting business in your broad area of expertise, leverage your contacts to secure an initial group of clients before investing in expanding the company’s footprint. Both in terms of the size of your team and the types of services or expertise you offer.

Over time you may see the consulting business open up multiple offices to cater to your growing client base or clients split across geographic areas. You will also see your role shift from being a consultant to a manager of the business where you are responsible for ensuring the machine operates smoothly.

This is a very different type of undertaking. One where you essentially have ambitious to be more of an entrepreneur than a consultant. For the purpose of this article, we won’t focus on this type of consulting business. Instead, our guide is tailored to individuals who wish to operate a consulting business on the side or transition into a role on a full-time basis as an individual or in a small team.

Pro’s Of Starting A Consulting Business

By now we have a clear understanding of who a consultant is, what a consultant does and the different types of consulting businesses that can be built. But deciding to start any business, including a consulting business, is often a major life decision. It, therefore, makes sense to understand the benefits that you may see in starting and operating a consulting business.

The Benefits Of A Consulting Business Include:

Stand up meetings for updating people
  • Low establishment costs – Consulting businesses typically have low establishment costs. There is no expensive equipment to buy, no stock to order in and no large office or warehouse needed. In fact, you can start a consulting business working from home or out of a co-working space. Beyond that your establishment costs can be as limited as establishing the company or business, building an online presence and some initial advertising.
  • Potentially lower risk – A consulting business can be a potentially lower risk venture compared to other endeavors. As mentioned above there is no inventory to procure or large office space needed. This keeps both your upfront and ongoing costs low. If you fail to get clients then the sunk costs of creating the consulting firm can be relatively low allowing you to exit the business without a significant loss.
  • Leverage existing experience – As a consultant, you will typically be going into a field where you already have deep domain expertise. This allows you to leverage your existing skill set while still being able to step outside of a corporate role and own/run your own business.
  • Ability to optimize for short or long term contracts – When you work as a consultant you can choose the types of projects and clients you look to work with. As a result, you can optimize how you position your businesses and services to be attractive to the types of opportunities that excite you. For example, if you prefer short term contracts with small and growing companies then you can market yourself that way. Or vice versa.
  • Flexible work hours and work environments – While many consultants will work a traditional work day/week there is nothing that says you have to stick to the standard 9 to 5. In fact, one of the main benefits of starting a consulting business is the flexibility it can provide. You can set your own work days, work when you want and generally be flexible with where and how you operate.

Con’s Of Starting A Consulting Business

Like all business ventures, starting a consulting business is not all “sunshine and rainbows”. There are a couple of cons or downsides to a consulting business that is worth being away of prior to starting your own. These include:

  • Lack of income certainty – While all businesses have no guarantee of being successful, as a consultant you are constantly chasing that next contract or client. If you fail to plan appropriately and lose a large client you can suddenly find that your income takes a hit.
  • Consulting businesses don’t scale well – The one limitation of every consulting business is that you only get paid for the hours you put in. Even if you bring other consultants into your business and take a margin on top of their hourly rate you are always going to hit a cap when it comes to the number of available hours in a work week.
  • Business relies on you – As a solo consultant, or even if you work in a small team, the business largely relies on you. You have built relationships with clients. They trust you. And they want to work with you. This can make it hard to take extended leave or step away from the business for an extended period of time.
  • You might be an industry expert but lack the marketing or business skills – Everyone likes to think they can sell and market themselves. But often consultants who come from deeply technical industries or positions where there isn’t a close association with sales or marketing can find it hard to get out there and prospect for new business.
  • You can find yourself doing the same work without the entitlements – While we all have visions of working on amazing and innovative projects as a consultant, you can easily find yourself falling into the trap of working on the same mundane projects you left the corporate world to get away from. So not only do you not gain the excitement you were seeking, but you are now doing the same job without company entitlements such as sick leave, annual leave, and insurance.

How To Start A Consulting Business

After considering the pro’s and con’s and looking at how you will structure your consulting business it’s now time to look at how you actually get started.

While there is no one sizes fits all approach to starting or building any business, the guide we have provided below is designed to flow in a logical manner and make it easy to get across everything you need to do.

Finding An Industry or Niche

The first step when it comes to starting a consulting business is to find an industry or niche where you have the skills and experience to provide something of value.

Not only that but you want to ensure that there is a sufficient client base that exists and could take advantage of your skills.

For example, you could be an expert at model building, but I’d hazard a guess that the number of consulting jobs available to model builders is fairly low, if not almost non-existent.

As a result, you are looking for that cross-section between your skills and experience and demand from organizations for that skill set.

Furthermore, I’d encourage you to dive deeper than picking a broad industry or topic such as “marketing”. Why? Well to establish yourself as a marketing consultant is like jumping in a pool with hundreds or thousands of other people who all look and sound the same.

Instead, you can pull on that thread a little bit more and find something much more specific that allows you to stand out as the expert on that topic. For example, instead of just being a marketing consultant you could be an e-commerce marketing consultant who specializes in helping overseas brands launch in your local country.

Coming Up With A Name & Registering Your Company or Business

Once you have arrived at your specific niche it is worth writing down a list of services or types of clients you would like to work for. This can play an important role in the brainstorming session that needs to follow.

With an idea and commitment to starting a consulting business, you now need to come up with a name and a value proposition. I.e. an understanding of what it is you are going to offer and why people should pay for your advice or expertise.

Some people simply choose to go with their name. I.e. Robert Smith’s Marketing. While there is nothing wrong with that it does specifically tie the value your consulting agency provides to you, yourself. So if you ever think you will have employees or expand it is best to come up with something more original. And something that isn’t tied directly to you.

When choosing a name you should also give consideration to the domain name. The world is digital. So you can have the best name in the world but if you can’t be found on the internet you might as well not exist.

As a result, you want to arrive at a name that is easy to spell, long too long and ideally has the .com domain or a country top level domain such as or (depending on your country of residence) available. Being able to secure one of these domains provides a higher level of credibility.

Finally, with a name in hand you actually need to register your business or company. Now regulations differ across jurisdictions, but broadly speaking you will find that in most countries a business name is tied to you as an individual. As a result, you are directly responsible for the liabilities of that business and if someone chooses to sue the business they are suing you directly.

Alternatively, if you register a company it is normally considered a separate legal entity. As a result, the assets and liabilities of the company are separate from your personal assets and liabilities. Furthermore, if someone sues the company there is an extra level of separation between you and any negative impact that may arise from that lawsuit.

Now as the internet is a global marketplace and you could be reading this article from anywhere in the world it is highly recommended that you speak with an accountant, local tax professional or your relevant government agency to understand what differences, if any exist between a business and a company in your country and the associated responsibilities and limitations that are associated with each.

Creating An Online Profile & Presence

With your business/company name in hand, a domain registered the next step in your journey to starting a consulting business is to build an online profile and presence.

Core to this will, of course, be your company website, but you shouldn’t also overlook other avenues of promotion that can help build your “brand” and credibility.

Depending on your industry and area of expertise you may look to leverage other social channels such as Youtube, Facebook, Linkedin or Twitter, etc. In particular, if you are positioning yourself as a marketing consulting what speaks more than showing how you have grown your own personal brand.

The message here is to really do what is appropriate and relevant to your industry. If for example you a mining engineer, then creating a Facebook page probably isn’t high on your list of priorities. Perhaps your profile needs to be more offline and build through presentations and talks you give at industry trade shows or events.

That said, I believe that all consultants can highlight the value they will bring to an organization through blogging or content marketing. As a consultant, you are meant to be an expert in a particular field or skill. Therefore you show to highlight the depth of that knowledge to potential customers.

Sticking with our marketing example, you could create in-depth and compelling content for an e-commerce brand that is looking to launch overseas. This could include content on things such as:

  • What to consider when translating marketing campaigns into another language
  • How cultural differences impact the success (or otherwise) of marketing campaigns
  • What social media channels are relevant in country X
  • Etc, etc

The goal here is to build credibility. Sure, not every visitor to your website will be interested in engaging you as a consultant, but those who are will already have bought into your ability to help their business before you even speak to them.

One final point when it comes to building an online presence. It’s easy to think that you need to spend thousands of dollars having someone design or build a website to market your services. But as we know many consultants look to establish their business at a minimal cost it’s just as easy, if not easier, to turn to services like Wix, Squarespace or WordPress (for those slightly more technically inclined) in order to build a high quality and professional looking site.

Securing Your First Customers

At this stage, your consulting business has everything it needs to pass the first glance of a prospective client. You have a good name, a professional looking website and the start of what will hopefully be a long run and successful blog that highlights your skills and expertise in the area.

Now its time to start getting paid. There are a number of ways to approach finding your first customer, each of which we have broken down below:

Consult To Your Past Employer

Depending on your industry and uniqueness of your skillset it may actually be possible to sign up your past employer as your first client.

This is often refined to more specialist or deeply technical roles where your skill set is hard to hire for, but can even apply for more common roles such as sales, marketing or design.

When the time comes to let your employer know that you are moving on there is nothing stopping you from saying that you are leaving to start your own business. If they feel there is some work you could help within the interim or on a project by project basis then you are more than happy to provide a price to them.

While this won’t work every time often employers will be happy to retain you in some capacity and see your work on ad-hoc projects, even if it is only until they find a full-time replacement for you.

Past Clients, Colleagues, and Industry Connections

Amazon Leadership Principles - Customer Obsession

If you have come out of a business or agency that consults then there are often clauses in your contract that preclude you from poaching clients or businesses from your old employer. However, you may have come from a company or role where this is not the case and simply through your day-to-day work were able to build up a large list of industry contacts.

In this case, you don’t want to put the hard sell on anyone, especially if you value them as a friend, rather than a colleague or business associate. But again there is nothing wrong with reaching out and asking for their time on the phone or over a coffee to share what you are doing.

You might not grab a client straight away but the more people you speak to and share your journey with the more likely you are to find someone who is after your skill set or knowledge.

Free Initial Consultations

Now let’s say you have struck out on past employers and industry contacts. You are starting cold and need to build a book of business.

While you don’t have money you do have a lot of one particular resource and that is time. So instead of investing money into ad campaigns that may or may not work, you can invest your time to try and find a client.

One way of doing that is to offer an initial consultation or some level of insight completely free of charge. Now you want to ensure this is time-bound, perhaps limited to just an hour or two, but offering a smaller but fast-growing company a complimentary review of their Search Engine Optimisation strategies, online marketing campaigns or design of their website can prove fruitful.

To maximize the success with this strategy you want to ensure that you get the opportunity to actually present your findings face to face or over the phone, rather than via email. Getting to meet people gives you a better chance to build a human connection, greatly increasing your chances of converting them to a client now or at some point in the future.

Online Marketplaces

Upwork Screenshot

Let’s say you just aren’t having any luck and are starting to really wonder where your first client is going to come from. Then, while this wouldn’t be my first recommendation, you can turn to platforms like Upwork, Freelancer and Guru, etc in order to create a provider and start bidding for work.

Now you are probably going to want to be selective because while these programs are great at matching companies with the talent they need they often create a culture where it is a “race to the bottom” with various freelancers and gig economy workers all trying to undercut each other’s price in order to secure the business.

Instead of just trying to win any and all work I’d recommend you take a more targeted approach and look for projects that you:

a) know you can perform to a high standard

b) would be happy to use in your portfolio moving forward and

c) are a job that requires your skills and expertise, rather than just grunt work or time to get done. I.e. you want to make sure the gig is as close as possible to a typical consulting type engagement, even if it is on a much smaller scale.

Some examples of this could include bidding for work where an organization is asking for a review of their Google Adwords performance or a breakdown of SEO issues affecting their website performance.

Off the back of these jobs, you then want to do two things. One you want to try and turn that short term gig into a longer term relationship with the company that provides repeatable work. Secondly, you want to be able to leverage your success with this job to showcase other potential clients what you can do for them. On that note, you could use your own blog to write about the project (while maintaining client privacy) to give insight into what you are able to achieve.

Cold Selling / Prospecting

How To Build Your Startups MVP For $10k - Presell Licences

If you find that you are unable to secure clients through your own network and don’t want to consider online marketplaces to get you started then you need to fall back to sales 101. That is the art of the cold sell or prospecting.

This can take many forms but essentially you are approaching people/businesses without any prior contact with you or your organization in order to try and sell them on the services you offer.

In any industry, this can be a hard sell. You are asking someone who doesn’t know you to trust you and start paying you money for a service. As a result, there are a few things that you can do in order to improve your odds of success.

Instead of approaching businesses cold, shorten your odds by finding a highly captive audience whom you can engage with. For example, you could attend a conference or networking event associated with your industry. While you will still lack the personal relationship with people in the room at least you know they are interested/engaged with your line of work.

You can also combine cold selling with other forms of business development activities. I.e. instead of going straight into sales mode you can engage potential customers to seek their advice or to offer a free consultation of your own. We have covered the art of offering a free consultation as a lead generation tool above, but what about where you use your potential client’s knowledge or advice as a lead generation opportunity. Well in this instance you could, for example, reach out to marketing managers at a finance company and ask if they would be willing to meet over a coffee and share some insights they have in the market with you. You’ll want to make sure that your finances are stable, you can find out more information here for how to manage that. There are loads of other things that you need to consider though when it comes to starting up your own business. For example, if you decide to allow people to pay you online, then you need to make sure that you have the right card system in place. If you are unsure about this, then you might be interested in finding out how credit card processing work?

Lots of people like offering their advice, so if you position this as a way for them to look like a thought leader or the one who’s opinion is valued the chances they will accept your invite will greatly increase. As will naturally occur in almost every conversation, when you meet, you will also get the opportunity to talk about yourself and your background. While this may not lead to immediate sales it is a good way of building your network and increasing your own personal brand awareness.


How I Finally Cracked Facebook Ads And Got My Cost Per Engagement Down To 2 Cents! - audience

Finally, if all else fails or you have additional capital to commit to starting your consulting business you can always turn to advertising. In today’s digital age the good news is that advertising is relatively low cost and doesn’t require a huge budget to get started.

The challenge, as with any mode of selling, is finding the channel that works well for you. For issue-oriented engagements where a client is highly likely to be searching for a solution, Google Adwords can be effective. I.e. If a customer is searching for “SEO page optimization expert” that would signify that this person is actively looking for someone to help with their search engine optimization requirements.

Conversely however if someone is searching for “best practice SEO optimization” they may or may not look to be performing that task themselves. Therefore bidding on that set of keywords is less likely to generate immediate business for you.

That doesn’t, however, mean that that keyword or traffic from it is meaningless. Instead, you might try and capture that individual’s email address via the content you have created on your website (blog post, video, infographic, etc) and then place them in a marketing funnel where over time they learn who you are, the services you offer and value you can bring to their organization.

To drive traffic to this type of content that is more educational other services such as Facebook or Twitter ads may be more relevant. I.e. Very rarely is someone going to browser Facebook and instantly buy a consultants service. But they may be browsing Facebook, have an interest in SEO, see you guide and choose to read it. Therefore giving you a chance to use a Call to Action to collect their email and begin marketing to them via other means.

Growing Your Client Base

With all of the above, we have largely focused our efforts on securing your first set of clients. That said, you can continue to utilize each of the above strategies to build your client base over time. The principles largely remain the same.

In this section of our how to start a consulting business guide, we will, however, narrow our attention specifically on growing your client base. With this in mind there are a few things to consider:

Monthly Retainers or Contracts

It's Not All About The Money – Employee Survey Shows Friendship Is A Primary Source of Workplace Motivation - Takeaway

One of the biggest drawcards of working as a consultant is the variety of clients you get to work with. There does however have to be a balancing act. If you have dozens of clients a month that likely means that each engagement is only very short in nature. This presents a couple of challenges, namely the administrative burden of managing so many different clients, but also the lack of certainty you have over your income each week or month.

One way to minimize the swings you can see in your income when starting a consulting business is to sign clients on a monthly retainer or contract. This locks you in with a client for a specified period of time. It can be everything from a month to month agreement, 3 month, 6 month or 12-month agreement or something even longer.

While this minimizes the flexibility you have it can be a good tradeoff for the security it provides. It also doesn’t mean you can’t work for other clients either. You just need to ensure that your agreement covers exactly what and when you will be working on their projects. I.e. 10 hours per week. Or 3 hours a day on Monday, Wednesday and Friday

Repeat & Referral Business

Benefits of the SaaS Business Model - (Software-as-a-Service) - Recurring Revenue

The other core aspect of growing your customer base is the value that you can derive from repeat or referral business.

In this case repeat business is a client coming back to engage you for more work. It differs slightly from a monthly contract or retainer as they may not want that continuous ongoing relationship, but they still value your services and engage on a regular basis. I.e. A client who engages you every 4 or 6 weeks to help set up a new advertising campaign.

Referral business is that business you earn by word of mouth. It happens when one client refers you to another. Not only is this essentially a free form of advertising but this business is often easier to win. Instead of considering a range of consultants to perform the work the potential new client has been provided with a recommendation. A recommendation to engage you. Unless you do spectacularly bad in your first meeting the chances are high that you will win the business.

Benefit of growing your business

Task Pigeon September Monthly Report 2017 User Engagement Grows

As we have spoken about before all consulting businesses can eventually hit a cap where the demand for your time outstrips the time you have available to work. This is a good situation to be in for any growing business and the same is true for a consultant.

At this point, you essentially have the best of both worlds. If you have opted to keep things small then you can either slowly increase your rates so that you work on projects worth more per hour each time until you hit equilibrium, turn down projects that you don’t find as interesting or compelling or alternatively look to grow by bringing in more people to assist with the growth.

Managing Your Business

Pitching new clients and getting your first few wins is exciting. But delivering on the work is what will set you apart from the competition and ensure you have a viable consulting business for years to come. That’s why learning to manage your consulting business properly is so important.

In this section of our guide on how to start a consulting business, we will look at a number of the core requirements that apply to managing your business.


Communication is absolutely essential. Nine times out of ten misunderstandings happen because of miscommunication.

As the consultant in the relationship between you and the client, the onus is on you to update them with progress. Not wait until they ask you how things are going.

In fact, if you have a client chasing you to find out the status of the project you have left things too late already.

In addition to regular updates, you need to be prompt in your communication, via both phone and email. If a client calls you can’t leave it days between a reply. While you may be busy, failing to reply to prompting signals to them that they just aren’t that important to you.

If you do this for too long or too many times then the client may choose to end your engagement or decide not to refer you to other potential businesses who could benefit from your services.

Project Management

Regardless of how many clients you have an effective consultant has a good system for managing projects or tasks behind them.

There is no one size fits all approach so you need to find the strategy that works for you. Some people still stick to paper, others use their inbox or Excel spreadsheets. Increasingly, however, consultants are turning to task management tools such as Task Pigeon to help them track and manage tasks across their entire client base.

There are a number of advantages to using a task management tool, especially as you begin to grow your client base. Namely, it makes keeping track of what you have to work on that much easier. This may seem like a minor point but forgetting to complete a task or missing a deadline can lead to a poorer relationship with your client.

In addition to a task management tool such as Task Pigeon, you can categorize work. This helps make it easy to group tasks by client or project, easily track due dates and work in progress and update members of your team on the tasks progress.

If you choose you can also invite clients into your task management tool of choice, providing them with the ability to see and comment on the work you are performing on their behalf.

Invoicing & Accounting

Benefits of Bootstrapping Your Startup – You Understand The

The other aspect of your consulting business that is important to manage is invoicing and accounting. This becomes increasingly important as your business scales and also if you work with large, national or international clients who may require 30 days or more to process your invoices. Due to the importance of these two services, it’s sometimes more effective for businesses to consider using financial accounting services to make sure that they stay on top of these services whilst they focus on growing their company.

On this front, it can often make sense to schedule time in your diary and set aside time to issue new invoices at the end of each week or fortnight. Having a process will help ensure that your invoices are sent out in a timely manner. At the same time, you should also have a process for following up on outstanding invoices. A lot of this could be automated with reminder emails sent after 7, 14 and 21 days.

On the accounting side, each country/jurisdiction will have different reporting requirements for your business. What is often important however is making sure you retain receipts and accurate account for expenses that are related to your business.

So don’t do what lots of small to medium business owners do and stuff receipts in a shoe box. Create a system and stick to it from day one. It will make tax time a lot easier for you.

Calendar Management

The final part of making your consulting business that we will cover is making sure that you effectively manage your calendar. As a consultant time is literally money so every hour you aren’t working is essentially money down the drain.

This essentially means that you need to learn to be smart with your diary and filling up your time in a manner that makes sense.

What Comes Next

Hopefully, by now, you have a plan in your mind about how you will go about starting your consulting business.

The next step is to commit this plan to writing and to work out the next steps you will take. This requires consideration for the type of consulting business you will look to build, the type of services you will offer and where you will seek out your first clients.

As your client list grows don’t forget the importance of effectively managing your workload and maintaining good lines of communication with clients. Ensuring you maintain these high standards should result in a positive outcome and a higher chance of repeat and referral business.

With your consulting business continuing to grow you may then find yourself with more options than you previously thought. You can continue to grow and expand your consulting business, perhaps even bringing on more staff, or opt to keep it the size that it is but with the benefit of being more selective with the clients you choose to work with.


About Author

Paul Towers - Founder @ Task Pigeon

Paul Towers is a 3x Entrepreneur and Founder of Task Pigeon. Join me on my journey to build an open & transparent startup from day one. Paul is also the founder of Startup Soda, a newsletter curating the best content from the Australian startup ecosystem.