The idea of building your own consulting business is certainly appealing. When given the chance, chances are that most professionals working their 9-5 jobs would find the idea of building a consulting firm and being the boss of their own company a welcome opportunity. For full-time workers, no amount of money can rival the convenience and freedom freelancing brings.
While most independent consultants make six-figure incomes, there’s no guarantee that you’ll earn the same. Keep in mind that just like any other business, regardless of industry, planning to build a consulting business is not as easy as 1-2-3. It takes a lot of patience, time, effort, and understanding for your freelancing business to take off.
Luckily there are ways to turn your dream consulting career into a tangible reality and earn a comfortable living -- all while following your own rules.
Specialize and choose your niche
Having a niche means focusing on a specific part of the trade, a subcategory within the category. By specializing in a certain role, you’ll be able to build a reputation within that area of expertise. Becoming known as an expert allows you to market and grow your business easily, plus, you can command higher rates without the need to invest comprehensively. When choosing a niche, remember that:
- There is no universal or best niche, find the category that you’re most passionate about.
- Ask yourself if you have the skills, experience, and knowledge to work within that niche.
- To attract clients, make sure to clearly define your function and target market.
Understand the needs of your niche
The next tip on how to become an independent consultant is to understand the needs of your market. You can only succeed once you recognize the wants and desires of your clients. Bear in mind that every industry has its own standards and criteria. The needs of a potential client looking to hire you as a marketing consultant, for example, will be different than a company looking to hire an accounting or finance consultant.
When understanding the needs of your niche, you don’t want to play guessing games or simply pinpoint needs based on your assumptions. As much as possible, familiarize yourself with the industry by reading all the information available, and then gather enough data from the client to better understand their business. You can do this by direct questioning or through questionnaires.
- Use tools such as BuzzSumo to analyze the sites and articles suited to your niche.
- Get firsthand information by simulating their buying or business operating process.
- Find out relevant content through community websites like Quora and Reddit.
Why are consultants important?
Highly driven people by nature crave to achieve constant progression, but this innate condition creates a gap between the current and desired state. Applied to the real world, take for example a business owner who is unsatisfied with their present earnings, with a goal of increasing profits in the near future. This is where consultants come in, to bridge that gap by providing expert and reliable opinions. Your job is to help people solve specific problems, and in return, they’ll pay you for the services rendered.
There are many reasons why most business owners hire consultants. First, independent consultants don’t have an emotional attachment to the business which may interfere with the decision making process. Another reason is that consultants have highly diverse business experience that most owners don’t have. Consultants are important because:
- They help reach a goal or objective in a faster, more efficient timeframe.
- They carry out constructive analysis, diagnosis, and criticism.
- They are able to facilitate and implement solutions as an experienced outsider.
Define the value you offer
Unlike major firms and corporations, independent workers trying to build a name in the consulting industry don’t have a well-established reputation to rely on. Clients don’t know them yet and freelancer consultants are still trying to introduce their services in the trade. One great way to easily market your consulting services is to be clear on what your business does. Have a solid understanding of what you do, and the value you offer.
Known as value proposition, this is a marketing statement that summarizes the greatest points of your business, and why clients should hire your services. Make sure that it has a well-defined mission, vision, goals, and objectives. Communicate the key benefits of your independent workforce and what makes you unique compared to other freelancers.
- Follow the basic template; niche – results – offered solutions.
- Be different and stress the importance of relevance without being hyperbolic.
- Target the right audience, be specific to whom you’re talking too.
Protect your business
It might be last, but one of the most important tips on how to become an independent consultant is to secure the growth and financial strength of your business. As a consulting firm, there are risks and liabilities unique only to your trade. For example, a freelance consultant giving professional advice to someone in exchange for consultant fees runs the risk of their services resulting in the client suffering significant financial loss. Obtaining Professional Liability Insurance is, therefore, a must.
Commercial General Liability, on the other hand, is also important since you are vulnerable to bodily injury, personal injury, and advertising claims including libel as well as slander. Other types of insurance you’ll need to consider include Commercial Property and Commercial Auto insurance, but to save on cost you can opt for a Business Owners Policy which combines Commercial Property and General Liability coverages into one simple solution.
- To prevent coverage gaps, it is advised that you obtain a Commercial Package Policy.
- Your personal auto insurance won’t protect you from business travel, Commercial Auto will.
- To protect your home or office against unwanted risks, consider getting Commercial Property Insurance.