Thinking to start a Consultancy Business? Here are some helpful tips

How can you decide on a consultancy field with so many available options? You don’t want to miss an opportunity to generate income from any client who’s willing to pay for your services. You may think it’s better to cover your base by casting a wider net… But have you heard of the phrase “the riches are in the niches”? As counter-intuitive as it seems, you have to define your area of expertise. Put yourself in the shoes of your potential client. Would he or she look for a business consultant who has expertise in finance, fashion design, car detailing and landscaping?

Therefore you have to focus on a specific field, as the more areas of expertise you are adding to your services, the less impact it would have. According to Terry Rice of Entrepreneur magazine, you could get started with these first three steps, and plan the next course of action accordingly.

Step #1 – Make a list of your Strengths and Interests

To build confidence, you should offer services based on both your previous experience and areas of interest.

Start a spreadsheet with several columns. In the 1st column, write down all the roles, jobs and functions you have had, as trainee, volunteer, part time and full time jobs. Next, in the 2nd column, write down all the organizations that you have worked for, as well as all the trade associations, societies that you have belonged to. Finally, in the 3rd column, list down all the associated responsibilities, tools and processes involved with each role or job. (You should find most of this information in your resume or Linkedin profile)

Going through the chart, think about which services would you feel confident to offer. Also, you should make sure that you would enjoy performing this line of work. This is really important as you should not pick a business that would make you feel miserable or frustrated, or a field that is not a good fit with your personality and interest.

At this stage, you can think in broader terms and through the next steps, you should narrow down the options and focus on a niche.

It may well be that you have a plan or interest in services that you don’t actually have any experience with. This is fine as in this case, you should take some courses or get training in order to gain the confidence to present yourself as an expert in that field.

Step # 2 – Narrow down the industries you would like to be involved in

You need to have clarity on which industries you would like to work with, based either on your past experience or your personal interests. Think about who would be your audience and your potential clients in that industry. This helps you prepare for the research that you would need to make in the next step.

There is no ideal industry. You may want to pick a lucrative industry like Government contracts, but make sure that you are ready to tackle the time-consuming and tedious paperwork and form filling requirements.

You may identify small or developing businesses to help with your services as they are probably those who need the most assistance. But keep in mind that small businesses may not have the budget to pay for your services.

These are just examples of the challenges that you may face in thinking about how to generate revenues for your consultancy business.

You may end up offering a combination of flat fee per project and revenue share option. Just keep in mind that typically consultants are paid in proportion to the difficulty level of the problem that they solve. So you may think about an industry that faces difficult and expensive problems…

Step #3 – Research the problems faced by the industry and find a solution 

Some consultants fail because their services are either not crucial or the solution that they create to solve a problem is not impactful enough to charge a sufficient fee.

Since you have to generate an income to pay your bills and support your lifestyle, you have to avoid the above potential pitfalls and perform a deep research on your audience’s pain points and the solutions that you could offer based on the areas of expertise that you have identified in Step #1.

This deep research could be both time-consuming and tedious but it’s a necessary step to ensure that your consultancy business would be valuable to solve your audience’s problems and generate sufficient revenue. That’s why it’s key for you to enjoy what you do and can connect well with your audience.

The good news is that you don’t have to start from scratch. Observe how other consultants present their services, then approach this with your own angle. Marketing principles would advice you to determine your points of difference. But at this point, trying to be different may be confusing to both you and your audience. To start with, it’s better for you to offer straightforward and clear services and your unique personality would be your point of difference. It’s also how you’ll eventually build your personal brand

Decision and Action

After performing this in-depth research, you may discover that, after all, you are not suited or interested in solving these problems for any number of reasons. This is actually a good thing! It’s better to have clarity from the start, although it may be disappointing, that the consultancy work that you are considering is not viable. It’s better than wondering a few years down the line why you can’t find any client who would want to pay for your services.

If this happens, at least you have completed Step #1, and you should go back to step #2 and select another audience and decide to offer a different service. Some momentum has been lost, and it’s frustrating, but it’s so important to have clarity to build confidence and make the right decision before passing to action.

Once your mind is made up on the right path, you’ll have gained the confidence to start building your own brand and start a business that would be rewarding to you for many years.

In the end, if you decide that consultancy is not for you, no worries. There are other ways to generate income working from home. Check this post about the top Service-based businesses that you can start from home.

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