3 Steps in Starting a Consulting Business
Summary: Even if you have the skills for starting a consulting business, it still requires preparation. Your chances of success are greatly improved by following some basic but necessary steps.
If you have the right skills and knowledge, consulting may be a professional option for you. When you’re starting a consulting business, lay some groundwork early on that will save time and trouble later.
Business Structure
Decide on the legal structure for your business. There are several different ways to form a legal entity. You might want to stay with a sole proprietorship with you as owner, but this can be risky because of liabilities that may occur. Other choices are a partnership, a corporation, or a limited liability company.
Business Plan
Prepare a business plan that is representative of your current situation. This will help you manage expenses and plan your strategies on advertising and marketing, financing, office space and equipment, publications, personal development, future growth, and possibly hiring additional personnel. Your plan might never be seen by anyone but yourself, and it will require review and updating periodically.
Because you may not have any prior experience with a business plan, it is relatively inexpensive to procure software that will aid you in making it simpler and more accurate. Some packages come with generalized accounting software to help you budget when starting a consulting business.
Your Office
If your business is going to be comprised of you alone at the start, you will need to set up an office. This will most likely be in your home. Unless you are blessed with several high dollar clients in the beginning, you will need to watch your money, and you may even start on a part time basis.
You will need a budget for equipment that you will need to buy, services you must have for your business, supplies, and any construction necessary to have your office in efficient working order. A separate business telephone line is good if you can budget for it to make your business more professional.
Utilities and rent can be prorated at tax time based on how much space your office takes up in your home. If you have a detached building to use for your office, that is even better because it does offer privacy and removes you from distractions.
Pay consideration to these items when you are starting a consulting business, and things will be smoother down the road.