From Idea to Launch: The Complete Guide to Starting Your Consulting Agency
Before stepping out on your own, consider these prerequisites for success.
Starting a consulting business can be an exciting and rewarding experience, but it can also be a daunting task. Before launching your business, there are many things to consider, from understanding the basics of consulting to identifying your niche and managing your operations. However, before taking on this monumental undertaking, you must answer the question, “Why would someone hire you?”
This guide will attempt to provide you with the information you need to answer that question and a comprehensive roadmap to help you get started.
What is the Difference Between Coaching and Consulting?
Coaching and consulting are similar in that both activities guide clients toward achieving goals and improving lives. However, there are some distinct differences worth noting.
Coaching focuses on identifying and enhancing the client’s inner abilities, which the client can broadly apply to many areas of their professional life. When working as a coach, you focus on identifying personal roadblocks to help bring out the best in your client. Without trying to solve the problems for them, the coaching process is more hands-off, guiding the client through discovery and self-awareness.
Consultants advise people and organizations seeking expertise to solve problems. Using their knowledge as a guide, consultants are hands-on, typically focusing on and trying to solve a specific problem. This may mean that a consultant’s efforts are more data-driven and may have results that are easier to quantify.
Consultants are experts in their field. An education, life coaching background, or coaching certification is not enough. To become a successful consultant, you must have expertise in a specific field, a deep understanding of your client’s needs, excellent communication and interpersonal skills, and the ability to deliver results. That means you must have information, systems, and processes ready to deliver that will solve the problem you are hired to do. In other words, consulting is much more than “feel good” advice and self-discovery.
Can an individual be both a consultant and a coach?
Absolutely! However, both require different skills and processes to help clients reach their goals. Regardless of which path you choose, it is imperative to understand how to prepare before starting your own coaching or consulting practice.
For the remaining part of this article, we will use the term “consultant/consulting,” which can be interchangeable with “coach/coaching.”
Steps to Complete Before Launch
Starting a consulting business requires careful planning and preparation. Because of the difficulty of starting a consulting practice from scratch, you must identify your target market, become an expert, and begin to brand yourself as soon as possible. A great way to do this is to further your studies in Industrial-Organizational Psychology. Many universities offer remote coursework to complete degree programs and certifications. While completing your coursework, take the opportunity to write articles and blog posts to showcase your area of expertise.
If you have been recognized as an expert and many look to you for advice, considering a consulting career may be right for you.
Here are a few steps to consider before opening your consulting agency:
Step 1: Identify the Problem
Sir Richard Branson once said, “If you want to become rich, find a problem that affects a large group of people and solve it.” Whether or not your goal is to achieve wealth in your new career, this advice is essential for success to those looking to open a consulting practice. One of the biggest mistakes we see new entrepreneurs make is chasing their passion. Having a passion for your work is wonderful. But being blinded by it without consideration for the marketability of your product can lead to disaster.
If you are not certain of which niche or area of work to focus on, consider these 2023 Top 10 Work Trends as identified by The Society of Industrial and Organizational Psychology (SIOP):
- Re-thinking the employee experience of remote workers
- Best practices for managing a hybrid workforce
- Managing the transition into the post-pandemic world
- Insuring inclusive environments and cultures
- Talent attraction and retention in a candidate-driven market
- Reshaping work to address employee’s mental health
- Revisiting people strategies in times of economic uncertainty
- Psychological safety in the workplace
- Leadership development and coaching
- Integrating work, life, and family
Step 2: Conduct Market Research to Understand Your Market Niche
To significantly improve your potential for success, and with your specific skillsets in mind, research your target market to understand who they are, where they live, their needs, their biggest frustrations, where their industry is headed, and what would motivate them to hire a consultant. Also, you must have a clear vision of how your business model will differentiate you from your competitors. Collect as much data as possible to understand your niche better, and once defined, build everything around it!
When you complete this step, you should be able to answer the following questions:
- What are the demographics of my niche market?
- How complex are the issues they face?
- Are the issues long-term or short-term problems?
- What tools and solutions do you have now that can solve these problems?
- What tools, technology, systems, content, and programs must you develop?
- How many within the group are suffering from the same issues?
- What financial impact will your clients face if the issues remain unsolved?
- How many competitors have the same skillset and can offer solutions to these problems?
- How will you develop and nurture your leads?
- Once identified, how will you market your services?
- Why would they buy from you?
- How much will they pay for your services?
This step alone makes most considering self-employment for the first time reconsider their options. However, don’t be discouraged. The hard work and effort can be extremely rewarding!
Step 3: Visualize Success
As a business owner, it’s crucial to envision success right from the beginning. Visualizing success can help you set clear goals and objectives, and it can help you stay motivated and focused throughout the startup phase. When you have a clear image of what success looks like, it’s much easier to make strategic decisions and prioritize tasks that will help you achieve your goals. Additionally, visualizing success can help you attract customers who are drawn to your confident and optimistic outlook. By projecting confidence and positivity, you can create a culture of success within your company that inspires your team to work hard and strive for excellence. Ultimately, business owners must visualize success if they want to turn their startup dreams into a reality.
Step 4: Build Your Business on a Solid Foundation
Even if your vision of success does not include employees or strategic partnerships, you should build your business on a solid foundation. A solid foundation starts with creating a business plan and roadmap identifying your mission statement, opportunity, target market, competitive analysis, marketing strategy, brand strategy, goals, pricing strategy, defined services, financial projections, and operational budget.
Not to be created and filed away; you should constantly review and adjust your plan frequently to be effective.
Step 5: Choose Your Business Structure
You need to choose the legal structure for your consulting business, such as a sole proprietorship, partnership, LLC, or corporation. Each business structure has its own advantages and disadvantages, and you need to choose the one that best suits your needs and goals.
Step 6: Register Your Business
You need to register your consulting business with the appropriate government agencies, such as the IRS, state tax authorities, and local business registration office.
Step 7: Prepare to Work
In addition to your office, equipment, and website, you must develop your marketing materials, such as your business cards, brochures, lesson plans, and website content. You must also establish your accounting system, proposal system, and invoicing process. All of these systems and processes should be documented in your agency Procedure Guide.
How to Grow Your Consulting Business
Once you have started your consulting business, it’s time to focus on growing your business and expanding your client base. Here are some tips for growing your consulting business:
Tip 1: Develop Your Brand
Your brand is your identity, and it’s what sets you apart from your competitors. You need to develop your brand by creating a unique value proposition, developing your marketing materials, and building your online presence.
Tip 2: Network and Build Relationships
Networking is an essential part of growing your consulting business. You need to attend industry events, join professional organizations, and connect with potential clients and partners. You also need to build relationships with your existing clients and provide exceptional service to earn their loyalty and referrals.
Tip 3: Expand Your Services
As your business grows, you may want to consider expanding your services to meet the changing needs of your clients. You can add new services, such as training, coaching, or mentoring, or expand your services to new industries or markets.
Common Mistakes to Avoid When Starting a Consulting Business
Starting a consulting business can be challenging, and many new consultants make common mistakes that can hinder their success. Here are some common mistakes to avoid when starting your consulting business:
Mistake 1: Failing to Define Your Niche
Failing to define your niche can make it difficult to differentiate yourself from your competitors and attract clients who are looking for your specific services.
Mistake 2: Overpricing or Underpricing Your Services
Overpricing or underpricing your services can make it difficult to attract clients or generate revenue. You need to set your prices based on your market research, competitive analysis, and the value you provide to your clients.
Mistake 3: Failing to Deliver Value to Your Clients
Failing to deliver value to your clients can damage your reputation and prevent you from generating repeat business or referrals. You need to understand your clients’ needs, provide high-quality services, and deliver results that exceed their expectations.
As identified earlier, starting a consulting or coaching agency from scratch can be overwhelming. And when you are finally ready to start working with clients, you must know how you will identify underlying problems, conduct research, collect data, analyze feedback, communicate strategy, and implement your plan. The difficulty of this work is why consulting can be an extremely lucrative career path.
If you’re new to consulting or don’t have a strong network of clients, you may want to consider joining a consulting team or agency. Joining a team can provide you with access to clients, mentorship, and support and help you build your expertise and reputation. If you would like to know more about Ivy Consulting Group, we welcome you to create a free account to find out more.