How to Start Your Consulting Business in 5 Steps

Starting a consulting business has never been easier than it is today. With just a computer and an internet connection, you have the opportunity to launch your own business and make an impact faster than ever before. The possibilities are endless, and your expertise has the potential to transform industries, solve real-world problems, and bring your vision to life. Like any entrepreneurial venture, careful planning and execution are essential to help you break into your field faster and get profitable sooner.

This guide will walk you through five essential steps to launch your consulting career, helping you navigate the exciting world of entrepreneurship and establish yourself as a trusted advisor in your field.

1. Choose your specialty

For many people starting a consultant business, identifying a specialty is very straightforward. You have specialized knowledge about a particular field, so selecting your lane should be simple. However, if you’re still unsure about which direction to take your new consultancy, here are some tips used by successful consultants.

Find a niche

Examine where you’ve spent a significant amount of time or have valuable experience within an industry, then consider “niching” down as you start your own consulting business.

It might sound obvious, but selecting the right niche in the beginning does wonders for your business and marketing. It helps you build authority in an industry and quickly communicates your value to potential clients. Many business owners want to find consultants who actually understand their specific challenges. By focusing on a particular niche, you can position yourself as an expert who comprehends the unique pain points of your target market.

While a niche is usually industry-focused, it can also be service-focused. If selecting a single industry doesn’t excite you, consider choosing a service to niche around. Digital marketers might narrow down on SEO, financial advertisers might offer tax strategies, or a healthcare professional could offer advice on patient management systems. These fields can be applied across various sectors while still allowing you to develop a specialized skill set.

Refine your positioning within your niche

Choosing a niche is just the first step. To truly stand out in your market, you need to refine your positioning within that niche. Effective positioning communicates your unique value to your ideal clients, making it clear why they should choose you over other consultants.

Start by deeply understanding your ideal clients and their specific pain points. What are their biggest challenges? What solutions have they tried before? What unique perspective or approach can you offer?

Once you understand this, you can craft a positioning statement and message that speaks directly to your ideal clients’ needs. A simple but powerful formula to start with is:

“I help [specific type of client] achieve [specific outcome] through [your unique approach or methodology].”

Here are some examples showing the progression from broad to specific positioning.

Broad Positioning	Specific Positioning
“I’m a human resources consultant.”	“I help tech startups build inclusive cultures and reduce turnover through data-driven HR practices.”
“I provide financial planning services.”	“I help busy CEOs secure their family’s financial future while maximizing their limited time through automated wealth-building strategies.”
“I’m a marketing consultant.”	“I help e-commerce entrepreneurs double their revenue in 12 months by optimizing their customer journey and implementing personalized retention campaigns.”

By specifically positioning yourself, you’re not just choosing a niche – you’re communicating your specific value to your most ideal prospects. This makes it easier for the right clients to find your consulting services are a perfect fit for their needs

2. Formalize your business

Once you’ve made the decision to pursue a consulting business, it’s time to formalize your new business. This might seem daunting, but there are plenty of tools and people who can help set up and structure your business the right way.

Choose your business structure

One of the first decisions you’ll need to make is selecting the right business structure. This choice can have significant implications for taxes, liability, and operations. Here are two standard options for consultants:

1. Sole Proprietorship: This is the simplest structure, where you and your business are considered the same entity. It’s easy to set up but doesn’t offer personal liability protection and may have a higher tax liability.
2. Limited Liability Company (LLC): An LLC provides personal asset protection and can be a good middle ground between a sole proprietorship and a corporation. It offers more flexibility in management and taxation.

While these are common choices, it’s important to research which structure best fits your specific situation. Consider consulting with a business attorney or accountant to make an informed decision.

Officially register your business

Once you’ve chosen your business structure, you’ll need to register your business with the appropriate authorities. This process can vary depending on your location and business structure but generally involves:

• Choosing a business name
• Registering with state and local agencies
• Obtaining the necessary licenses and permits

Remember, requirements can differ significantly by state and even city, so be sure to check with your local government offices or Small Business Administration (SBA) for specific steps.

Set up a business bank account

Separating your personal and business finances is crucial for proper accounting and tax purposes. Here’s what you need to do:

• Choose a bank, preferably one that caters to small businesses
• Gather necessary documents (e.g. business registration, EIN)
• Open a business checking account
• Consider a business savings account or credit card

Having a dedicated business account not only simplifies your bookkeeping but also adds a layer of professionalism when dealing with clients.

Create a basic business plan

Even a simple business plan can help guide your decisions and keep you focused. Include information like:

• Your business model and services
• Target market analysis
• Marketing plans and sales strategies
• Financial projections

This plan will serve as a roadmap as you grow your consulting business.

While it’s possible to handle much of the business setup yourself, it’s smart to seek professional assistance in key areas. A business attorney, bookkeeper, and insurance agent can provide valuable insights to help you avoid common pitfalls in the business formation process.

We’ll discuss more about marketing and business models in the next sections.

3. Choose your business model

Some of the most common questions new consultants have are “How much money can I make?” and “How much should I charge?” While the answers often depend on factors like your industry, overhead, experience, and ability to sell, there are a few standard models the majority of consultants use when charging for their services.

Hourly rate

Charging by the hour is a common practice for many consultants, especially when starting out. To determine your hourly rate:

1. Calculate your desired annual income
2. Factor in overhead costs and taxes
3. Determine how many billable hours you can realistically work in a year
4. Divide your total desired income by billable hours

Remember to account for non-billable activities like marketing and administration when setting your rate. As you gain experience and build your reputation, you can gradually increase your hourly rate to reflect your growing expertise.

Project-based

Project-based pricing can be attractive to clients who want to know the total cost upfront. To price projects effectively:

• Break down the project into specific tasks and estimate the time required for each
• Calculate the cost based on your hourly rate
• Add a buffer for unexpected complications or revisions
• Consider the value your work will provide to the client

If you have clearly defined projects, project-based pricing can lead to higher profits as you become more efficient over time. Many consultants who use project-based pricing still include an hourly rate in their contracts in the event unscoped work is requested.

Retainer

Retainer agreements provide a predictable income stream and can help you build long-term relationships with clients. Under this model, clients pay a set fee for a predetermined amount of your time or services each month. To make retainers work for you:

• Clearly define the scope of work covered by the retainer
• Set boundaries for communication and availability
• Regularly review and adjust the retainer agreement as needed

Retainers can provide financial stability and allow you to focus on delivering value rather than constantly hunting for new projects. Consultants who use retainers should look for ways to add more value to increase the scope and price of the retainer.

Performance-based pricing

As you gain experience and confidence in your consulting niche, consider moving towards performance-based pricing. This approach focuses on the results and value you deliver to clients rather than the time spent. To implement performance-based pricing:

• Thoroughly understand the client’s goals and the potential impact of your work
• Quantify the value of achieving these goals (e.g., increased revenue, cost savings)
• Price your services as a percentage of that value

To test this model, start by having a minimum engagement fee. No matter the length of the project or time you think it will take, charge a minimum amount and go up from there. Ultimately, value-based pricing can lead to significantly higher fees, but it requires a strong track record and the ability to clearly communicate your value proposition to clients.

4. Develop professional marketing materials

Many new consultants overlook the value of marketing their consulting company. It might seem like a low priority when you’re focused on getting your first clients, but creating a clear, professional brand is essential to launching well. Here are the marketing endeavors that will have the highest ROI as a new consultant.

Website design

Most consultants are going to drive traffic to a website. While it doesn’t need to have all the bells and whistles, a website is still a money-making tool.

Your website should clearly communicate your value proposition, showcase your expertise, and make it easy for potential clients to contact you. Don’t get stuck here. This is just the first iteration of your website – as you grow, your website will grow with you. Include the following elements:

• A compelling “About” section that highlights your experience and credentials
• A services page that clearly outlines what you offer
• Case studies or testimonials from satisfied clients (as you acquire them)
• A blog or resources section to demonstrate your knowledge and provide value
• Clear calls-to-action (CTAs) for scheduling consultations or signing up for your mailing list

We recommend checking out Kartra’s landing page builder to create professional landing pages and websites with ease.

Social media profile branding

Your social media profiles are often the first point of contact for potential clients. Ensure that your profiles on platforms like LinkedIn, Twitter, and Instagram are professional, consistent with your brand, and showcase your expertise. Regularly share valuable content, engage with your audience, and participate in relevant industry discussions to build your online presence.

Business collateral

While most of your marketing and sales might happen in the digital world, having professional business collateral can set you apart from the competition. Invest in:

• Business cards with a clean, memorable design
• A professional email signature with your contact information and website
• Branded proposal and report templates
• A digital brochure or one-pager outlining your services

These materials not only make you look more professional, but also serve as valuable tools for networking and client presentations.

Email marketing

Building an email list is one of the most effective ways to nurture relationships with potential clients and stay top-of-mind with your network. Consider creating a lead magnet – such as an e-book, whitepaper, or free consultation offer – and placing it on your website to encourage sign-ups. Then, you’ll be able to follow up with a regular newsletter that provides value to your subscribers while subtly showcasing your expertise and services.

5. Find clients

Many guides will give you impractical or expensive ideas for finding clients. As a new consultant, you probably want to keep your expenses low, so these tips will help you get your first clients – even on a limited budget.

Reach out to your existing network

The best place to start when building your consulting business from scratch is with people in your network who could use your services. The more people who know about your business, the better. Reach out to past clients and colleagues to see if they know anyone who could use your services.

Don’t be shy about leveraging your professional network – many successful consultants build their initial client base through word of mouth referrals from former coworkers, managers, or industry contacts. Be clear about the value you can provide and ask for introductions to potential clients or referral partners.

Build a social media presence

Another great way is to get active on social media to build a following. We’re not talking about becoming an influencer exactly, but there’s plenty for new consultants to gain from an active social media presence.

Many consultants find LinkedIn to be a valuable resource for sharing content and connecting with potential clients. Develop a content strategy that showcases your expertise and provides value to your target audience. Engage with others’ posts, participate in relevant groups, and use LinkedIn’s publishing platform to share longer-form content.

Other platforms like X (formerly Twitter), Instagram, or even TikTok can be valuable depending on your niche and target audience. Choose the platforms where your ideal clients are most active and tailor your content to each platform’s strengths.

Content marketing

Establishing yourself as a thought leader in your niche can significantly boost your credibility and attract clients. Consider the following content marketing strategies:

• Write guest posts for industry publications
• Create in-depth guides or whitepapers on topics relevant to your target audience
• Start a podcast or YouTube channel to share your insights
• Develop case studies that showcase your successful client engagements

By consistently producing high-quality content, you’ll improve your visibility and demonstrate your expertise to potential clients.

Do search engine optimization

As a consultant, you can translate your knowledge of a subject into a powerful and effective method of marketing: search engine optimization.

Optimizing your website for search engines can help potential clients find you when they’re searching online for solutions to their problems. Consultants should focus on creating high-quality, keyword-rich content that addresses the pain points of their target audience. Some SEO strategies to consider:

• Conduct keyword research to identify terms your potential clients are searching for
• Optimize your website’s meta titles, descriptions, and headers
• Create in-depth, valuable content that naturally incorporates your target keywords
• Build high-quality backlinks through guest posting and industry partnerships
• Ensure your website is mobile-friendly and loads quickly

Remember that SEO is a long-term strategy, but it can provide a steady stream of inbound leads once you start ranking for relevant keywords.

Attend in-person events

While digital marketing is important, don’t underestimate the power of face-to-face networking. Connect with potential clients and referral partners at industry conferences, trade shows, and local business events. Some tips for successful networking:

• Prepare a concise, compelling elevator pitch
• Bring business cards and any relevant marketing materials
• Focus on building relationships rather than hard selling
• Follow up with new contacts promptly after the event

Consider speaking at events or hosting workshops to showcase your expertise and attract potential clients.

Partner with other professionals in your network

Collaborating with other consultants or complementary service providers can be a great way to expand your reach and access new clients. Look for professionals who serve the same target market but offer different services. For example, if you’re a PPC marketing consultant, you might partner with web designers, copywriters, or PR professionals.

Consider creating referral agreements or even developing joint service packages that provide more comprehensive solutions to your clients’ challenges.

Launch your consulting business with Kartra

Running a successful consulting business requires you to serve your clients with excellence – but it’s important to tend your business too. Automated marketing tools make it possible to promote your business and grow your client list while devoting your energy to the work you love.

Instead of stitching together various software, consultants who take advantage of Kartra’s all-in-one marketing platform have all the tools they need — all in one place:

• Automated email marketing
• Lead capture and lead management
• Landing page and form templates
• Client onboarding including client portal
• Tiered memberships
• Calendars and scheduling
• Sales funnels