Do you have the expertise and a particular skill set in high demand? For example, are you good at sales, giving presentations, mentoring, or teaching? If you fancy being an expert in a field of your choosing, advising other people or organizations on how they can improve their processes and bottom lines, there’s opportunity aplenty.

For example, statistics show that as of 2022, the market size of the management consulting industry is worth $16.9 billion, an increase of 6.4% from 2021.

But choosing to become a consultant and launching your own business takes forethought, research, and determination. Choosing to be a self-employed professional or launching a small business is not something to enter into without preparation. Here’s an overview of what you need to do to get your consultancy up and running:

A professional consultant

What Is Consulting?

A consultant is an independent professional hired temporarily by a company to help improve some aspect of the business, provide advice and mentoring, or offer unique expertise on a specific matter.

What Do Consultants Do? What Are the Different Types of Consultants?

If there is a thing that a business needs or wants to do, there is usually an opportunity for a consultant to help. Something that is typically not the company’s core business is often where a consultant often comes in.

As a consultant, your clients will rely on your experience, advice, and recommendations as you provide services related to your area of knowledge. These areas of expertise can be very specific and varied. Some popular examples include accounting, management consulting, IT consulting, legal, marketing, change management, human resources, public relations, safety consulting, mental health consulting, coaching, supply chain, taxes and payroll.

Common services offered can include:

  • Streamlining operations
  • Training, teaching, and mentoring
  • Specific business expertise
  • Fundraising
  • HR and staffing issues
  • Financial audits
  • IT implementations

What Industries Hire Consultants and Why?

Any industry you can think of can benefit from a consultant, particularly businesses where changes or expertise are needed to facilitate processes, a new implementation, or staffing issues that people cannot serve within the company. Some common scenarios include:

  • Businesses that want to implement new technology or software may hire an IT consultant to facilitate the upgrades, licences, and training.
  • Companies that need to staff temporary projects and don’t want to hire permanent employees may employ consultants with specific skills to fill that need.
  • Companies that need a problem solved may hire a management consultant to look at the issues with fresh eyes to develop a process and a plan.
  •  Businesses with a merger or other transition may hire business consultants to help with change management. 

Businesses also commonly hire consultants to facilitate various training programs or seminars. If a company needs to downsize, consultants can also be called in to decide who to let go and handle those meetings and transitions.

How Much Should I Charge for Consulting?

How to bill clients and what to charge is not a one-size-fits-all approach. It’s important not to charge too much or too little. A lot will depend on how in-demand and rare your skills are, your location, and a host of other factors, such as your years of experience and certifications.

Start by conducting a competitive analysis and find out what others are charging for similar services in your area. Ideally, keep your prices within a similar range to your competitors while also looking for gaps that will allow you to differentiate.  

Typically, there are three main ways consultants charge for their services:

  1. Hourly rate: This way, clients pay only for the time you spend on their accounts. Be sure to track your hours well when using this method. 
  2. Project rate: Clients are charged on a project-by-project basis with this approach. You will need to anticipate timing well or risk undercharging for your work. It’s a good way of offering clients more value than an hourly rate while also having a better sense of how much you will make.
  3. Retainer: This type of payment works well if you provide some ongoing or casual service to a client, especially if you will be on call or if their needs fluctuate from month to month. It allows for a steadier and more anticipatable income, but it’s essential to set clear expectations of how many hours would be the cap each month.

What Is the Difference Between a Consultant and a Contractor?

Contractors or freelancers tend to offer services that match a specific job title. They may be more junior and are not typically hired in an advisory capacity because they may not have enough experience or leadership capabilities. Whereas consultants can generally charge more for their work because of their expertise, advisory and mentoring capabilities, years of experience, or ability to train, sell, and problem solve.

What Licences or Certifications Do Consultants Need?

There are no specific qualification requirements in many types of consulting, but it pays to research the industry you target. Some may require a degree or professional designation, such as accounting or legal consulting. Your industry experience and track record will be the primary requirement for others. 

A good first step is to find out what licences and regulations apply to your type of business. For example, a Certified Management Consultant is offered to consultants who’ve met specific performance standards. For financial planning services in Canada, you must be a Certified Financial Planner (CFP) to conduct consulting services in this field.

How Do I Get Clients for My Consulting Business?

Take the time to research what your business will provide and endeavour to accomplish. Follow these steps:

  • Choose your niche and identify any underserved specialties in your field
  • Determine which areas of potential your target clients struggle with the most
  • Differentiate how your expertise will provide services not easily found in the job market
  • Define your services by writing a business and sales plan
  • Develop a brand and online presence, including a website, social media, and targeted marketing like email marketing
  • Network: go to events, recruiting fairs, anywhere your potential clients might be
  • Take on speaking engagements, write blogs, and position yourself as a subject matter expert
  • Engage with and consider partnering with recruiters and use recruiting tools
  • Offer introductory prices for services or bundles
  • Ask for referrals and client testimonials, and contact former colleagues to ask them to refer clients to you

What Insurance Do I Need to Protect My Consulting Business?

Insuring your business is essential, but the type of insurance should also be determined by what kind of services you offer. For instance, you may need general consultant insurance or, more specifically, professional liability insurance since consultants are paid to provide advice to their clients.  If a client suffers a financial loss based on your advice, they could sue you.

Fill out an online application to get a free quote from Zensurance. Our team of brokers will shop the market for you to find the coverage you need at the best price, and they can guide you through selecting the right type of coverage.

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