Starting an independent career in consulting involves five steps: choosing your consulting domain, conducting market research in that area, assessing your skills and acquiring new ones, creating your consulting company, and marketing your services. In this article, we will cover how to become a consultant using these five steps. Many people are becoming independent consultants, and you can follow these steps to become one, too!
There has never been such a ripe time to become a consultant. The U.S. Bureau of Labor Statistics estimates jobs such as Management Analyst, which are often consulting roles, will see higher than normal growth in the next 8 years. U.S.-based employment website, Indeed, suggests that jobs in strategy consulting, HR consulting, and management consulting will see similar high growth rates. There are many opportunities to work in consulting by applying for consulting jobs in companies such as Booz Allen Hamilton, Deloitte, or PricewaterhouseCoopers.
However, you could also start an independent consulting firm. It will just take some research and effective planning to learn how to become a consultant. Starting your consulting firm has benefits and limitations.
Some Risks of Starting a Consulting Business
It will be important to conduct extensive market research to ensure that starting a consulting business is your best option. Just like starting any other business, you must invest and take on risks when starting a consultancy. You are responsible for the overall success and failure of your firm. You must be prepared to perform or hire others to perform business development, marketing, accounting, human resource management, and other core business activities. Depending on the market, you may see highs and lows, with inconsistent income. Further research will help you to identify the risks you would face in starting a consulting business.
Some Benefits of Starting a Consulting Business
On the other hand, a major benefit is the flexibility it provides you. Choose your work schedule, clients, consulting engagements, business strategies, and other work-related options. You will have freedom to focus on the niche area that matters most to you, as opposed to being required to work on uninteresting projects. You can also take advantage of small business perks, such as business development resources and grants. Hire other consultants and employees as you grow, giving others opportunities.
How to Become a Consultant: Step 1
The first step to becoming a consultant is to choose your consulting domain. If you specialize in industrial and organizational (I-O) psychology, you should narrow your consulting domain further to a particular set of services within the field of I-O psychology. Your niche area in consulting refers to the types of problems and solutions in which you will specialize. A consulting domain is important because it puts boundaries around your consulting services, allowing prospective clients to recognize you as an expert in particular areas.
If you focus your consultancy too broadly, you risk not being recognized as an expert when clients need specialized services. Suppose you wanted to hire a consultant to create an employee selection method for a brand-new job your company created. Would you prefer to hire Petra, the Management Consultant, or Shania, the Employee Selection Consultant? Both may be equally qualified to build your new employee selection method. However, you might not realize that because Petra’s consulting domain is so broad.
Examples of Narrow Consulting Domains
If your background is in I-O psychology, there are seemingly endless niche areas you could choose for your consulting domain. Reflect on the coursework (e.g., employee motivation, employee selection, training and development, etc…) you completed while obtaining your degree in industrial and organizational psychology. Each course reflects one or more possible niche areas that could become your consulting domain.
For example, your niche area might be organizational leadership solutions. You could provide services in leadership assessment, executive coaching, and leadership succession planning. Suppose your colleague Anne, who shares your background in I-O psychology also decides to start a consultancy. Anne wants to focus on learning and development solutions. Another colleague, Miguel decides that people analytics is the best niche for his consultancy. While organizational leadership, learning and development, and people analytics are all topics within I-O psychology, they are distinct enough to require specialized expertise.
Why Choose a Consulting Domain?
You may feel hesitant to choose a niche consulting area at first. It may be tempting to choose a vast area or to develop multiple niche areas. I would not recommend waiting to choose or casting the net too wide at this stage. You need to narrow your options enough to move to the next stage and conduct accurate, targeted market research. If your research shows that you need to broaden your consulting domain, then you can always revisit it then.
Since you will be conducting market research, I would consider this niche consulting domain to be “preliminary.” You should remain open to adapting it, now and years from now. After doing market research, for example, it may become clear to you that there will not be enough clients seeking services. Perhaps you find that there is too much competition in the niche. That’s ok. You can continue to redevelop your consulting domain as you learn more.
Step 2: Market Research
Once you have narrowed your niche consulting domain, you will need to conduct some preliminary research on your niche. You may have the skills to conduct this type of research on your own. Or, you may want to bring in a freelancer business development or marketing guru to help you (check out Fiverr Business for reputable freelancers). Here are some key areas I would recommend exploring at this stage.
Who Uses Your Services?
Firstly, determine who is using services in this area. It will be vital for you to know who hires consultants to provide services in this niche area. For example, are your clients most likely to be human resource management professionals working at large, for-profit companies? Are they individual leaders? Are they service-oriented or non-profit organizations?
After determining who your clients could include, you should conduct further research to identify your ideal clients. Suppose you identify 7 potential types of clients. Of these, which clients are going to provide you with the best likelihood of success? Which clients are most accessible to you at this stage in your consulting journey? Who most needs your services? Which types of clients are most likely able to pay for your services? These are just a few questions to consider as you identify your ideal clients.
Determining who your clients will include is important so you can align your consulting firm and skills with their needs. You can take this market research further as you consider each aspect of your consultancy, such as the cost of services. You will make hundreds of decisions as you establish your consultancy. Keep your ideal clients in mind each step of the way, and they will recognize how well you fit their needs in the future.
Who is Your Competition?
Once you have established your niche and determined your ideal clients, scope out the competition. Who is your likely competition for clients? Who do your ideal clients typically hire to perform those services? Are you able to compete with the existing providers’ level of expertise, cost points, and reputation? Is this market highly competitive, or is there room for new consultancies to grow in this area?
What is the Current Price Point for Services?
Unless you plan to work for free, it’s important to find out what others are charging for similar consulting services. Find out what others in your consulting area are charging and how they charge for services. For example, do most people in your consulting area charge using a time-based model? Are they charging by the hour, with perhaps half-day or full-day rates? Do they charge flat fees for common services? Do they charge according to the value they expect to provide to the client (e.g., 10% of the amount of money they expect to save or generate for the client)?
I would encourage you to invest time in exploring pricing options to ensure you have accurate, realistic expectations for your projected earnings. Of course, it will take time to build up a client base and generate consulting engagements. However, once you have established yourself as a consultant, would the projected earnings in this consulting domain fit your financial needs and goals? If not, consider revisiting your earlier decision-making to make adjustments that will lead to higher revenues.
Revisit Your Niche and Ideal Clients
You have learned a lot about your consulting niche at this stage. Now it is time to re-evaluate your original plans. Does your niche area need refinement to make it more consistent with client needs? Should you target a different clientele, perhaps one that is underserved by current consultancies?
Step 3: Assessing Your Skills and Acquiring New Ones
Once you know your niche consulting area and who your clients will be, evaluate your current expertise. Considering your niche area and potential client needs, do you currently have the skills needed to deliver? Take a complete inventory of your soft skills, technical/industry-related skills, and business skills. Determine your strengths and gaps in expertise.
Leveraging Strengths
Leveraging your strengths is critical to refining your consulting niche and scope of practice. Ensure that your chosen niche reflects your strongest industry knowledge and skills. For example, suppose you have a master’s degree in I-O psychology, but you also have a post-graduate certificate in data analytics. Not only that, others in your field come to you for data analysis advice. You’re good with numbers and enjoy conducting analyses. Perhaps your original chosen niche was HR Consulting. After further consideration of your strengths, people analytics consulting would be a better option.
When considering your strength, you should consider your business-related skills and abilities. Since you will be starting your consultancy, you should consider your strengths related to starting and maintaining a business. Perhaps you have experience starting or even working for a new business already. Maybe you have taken small business classes and already feel comfortable managing your
Filling Knowledge and Skill Gaps
Before launching your consultancy, you should possess the skills and knowledge related to your niche. At this stage, if it feels like you have more gaps than strengths, stay confident. With the increase in online educational offerings, you can fill those gaps. If you do not have those skills, acquire further education formally or through professional development opportunities. There are numerous educational and professional development options, with many available in flexible formats.
For example, if you find that you lack consulting skills, consider taking courses through LinkedIn Learning to strengthen those. Suppose you wanted to upskill in data analytics. You could complete the Google Analytics Certificate through Coursera. Gaining skills now will help you to maintain clients in the long term as they will see the added value you bring to them. You do not need to wait until you have mastered every aspect of your niche area to start your consultancy. However, you should have acquired strong expertise to ensure you can responsibly perform your services and establish credibility.
Revisit Your Niche
Again, revisit your consulting domain (niche) after taking stock of, leveraging, and acquiring any necessary skills. Does your niche still reflect what you can deliver to clients? Is there a more marketable way you could frame your skills? Should you broaden your niche at all to account for new skills and expertise?
Step 4: Creating Your Consulting Firm
When you have filled any skill gaps and further refined your niche, now the really fun part begins! It is time to establish your consulting firm if you are choosing to start a company. Keep in mind that, many consultants never actually start a firm. There are risks and benefits associated with different business structures. It would be best to consult a business lawyer and accountant to explore your options.
Suppose you do want to start your consulting firm. You will need to take several steps before being wholly set up to conduct business. For example, it is important to develop a formal business plan for your consulting firm. You will also need to choose a business name. You will need to register your business with the federal and state government.
Step 5: Marketing Your Services
There are many marketing steps you may want to prepare while waiting for registration paperwork to process. For example, many consulting firms develop websites to market their services. While waiting for your registration to process, consider creating a website, business cards, and other promotional and marketing materials. You would, of course, want to ensure that your business name is available first.
Client-based Marketing
When marketing your services, it is important to keep in mind your ideal clients. Where will they be looking for services like yours? Will they most likely find services online? Are they more likely to visit trade shows or conferences when looking for new service providers? Are they like many clients and look for service providers through word-of-mouth referrals from colleagues? You may need to conduct further market research and perhaps hire a marketing professional/freelancer to find answers to these questions.
Outsourcing Marketing
If you have funding available, consider outsourcing some tasks to skilled freelancers (check out Fiverr Business). Employing freelancers through Fiverr or other freelance platforms is a great strategy for creating marketing plans and materials promptly. You can view examples of their past work, negotiate pricing, and set up a schedule for deliverables. Freelancer platforms provide you with a level of quality assurance. You can check out the freelancer’s past reviews and see what other clients have said about their work and communications. As a new business owner, you may find that hiring freelancers simply makes the most economical sense.
You can hire skilled website creators to complete one-time or ongoing tasks for a reasonable price. Some tasks that you may want to outsource include web development activities. You could hire a freelancer to develop a website for you. You can even hire a content writer to fill it with quality copy! If you find that your clients are most accessible through social media, you can hire a freelancer to support your social media marketing campaign. Marketing professionals also work as freelancers and can help you to establish a long-ranging marketing plan that fits your budget.
Delivering High-Quality Consulting Services
I cannot underscore the importance of marketing your services. It will take time for your clients to recognize you as a service provider. Partnering with other consultants, subcontracting on projects with larger consulting firms, and promoting your services through freelancing websites are examples of strategies that can help you build a reputation sooner. Just as important as finding clients, once you land your first consulting engagement, quality is critical.
Providing high-quality services will help you to gain repeat clients and colleagues through word-of-mouth advertising. Your high-quality work essentially becomes a source of “free” advertising for years to come. This connection between quality and greater access to clients is particularly clear when you use freelancing platforms to connect with clients. When you are first starting your business, those initial client interactions are particularly meaningful. You want to build a strong reputation from the start, and then maintain it with high-quality, timely services.
How to Become a Consultant: Conclusion
Starting your consulting firm is a great way to enter the field of consulting, on your terms. It brings a lot of opportunities for you to leverage your skills and talents in the career path that you pave. You can even provide opportunities to others as you build your business. Starting your consulting firm does take time, resources, and commitment to be successful.
This article outlines five major steps for how to become a consultant. They include choosing your niche, There are many smaller steps to take within each of these, and so many decisions to make along the way. It is the ability and freedom to make choices that make independent consulting so appealing to some!
Are you considering becoming an independent consultant? What consulting domain have you chosen? Do you have tips to share about how to become a consultant? I would love to hear from you in the comments below.