How to Start a Consulting Business

Dayton Uttinger
How to Start a Consulting Business
Reading Time: 4 minutes

People mistakenly think that consulting can be one of the easier businesses to operate. After all, can’t anyone be a consultant? Perhaps, but only a select few people can be good consultants. You’ll need more than expertise or experience to succeed on your own as a freelance consultant. Plus, it takes some extra entrepreneurial spirit to start a consulting business all your own. You might be good at promoting yourself, but forming your own business is always an uphill battle.

Going from Freelance to Starting a Consulting Business

This step can be one of the largest in your career. Starting your own consulting business from a freelance background often seems like the most logical path; you have some experience and some clients that you can work off of. However, be wary of jumping in the fray too soon. Building a business takes a long time, and you need to build more than just infrastructure—you need to build credibility.

One thing you might not have considered: as a consultant, it might be more beneficial to specialize than it was in freelancing. Freelancers have a tendency to take whatever work comes their way, but in order to effectively market your business and succeed overall, you’ll want to specialize as much as possible. This might sound limiting at first, but it actually puts you on the path for success. The more specialized you are, the less competition you’ll face and the more brand recognition you’ll receive.

Qualifications: What Certificates, Licenses, and Skills Does Your Consultancy Need?

This will mostly depend on what exactly your area of specialization entails. Some fields are innately more technical than others. If you are consulting on security, healthcare management, or civil engineering, you will likely need some sort of certificate in order to be taken seriously. Certification isn’t always a legal requirement for consultants, but it is an easy way to display your knowledge so your clients can get an idea of your expertise. Even if you are entering a less-technical field, having a certification from a well-respected industry group can only help you.

However, you will probably need a business license. Applying for one is usually very easy at your county clerk office. Yes, this means you’ll have to file taxes with your business, but this will help you in the long term. You’ll be able to secure credit, open bank accounts, and widen your client pool once you register.

People might have faith in your consulting skills, but it remains to be seen how you’ll handle managing it as a business. Give yourself a year of promotion before officially opening your “doors.” This will give you time to fully lay out your brand, so that by the time you’re ready to roll out, you already have some interested customers.

Organizing Your Business


Your pricing will probably increase once you become a business, because you’ll have more expenses to pay for. That’s okay— generally, as a business you can offer more services than a freelancer can, so clients won’t be shocked if your rates go up. Use your freelance rates as a guideline, but be wary of selling yourself short. You can choose to be paid per hour, on retainer, or per project, but you need to know off the top of your head what your rates are. There are advantages and disadvantages to all approaches, but bigger jobs are impractical to complete on an hourly basis. Pick the one that makes the most sense to you.


The bidding process might be very different for you. Businesses tend to have more repeat clients than freelancers, so this is good news for you. The less time you have to spend on client acquisition means you can spend more time on client retention. Hopefully, you won’t have to bid as much in a competitive market and can instead focus on your client’s needs.


Keeping your business running is the area that you likely have the least experience. You need to create a budget and try your hardest to stick to it. Unfortunately, there’s going to be some slip ups. Especially when you start to grow and start to hire other employees, you’ll see how quickly your expenses can become unmanageable. It’s a whole different world than freelancing, but it comes with its own perks as well. Eventually, you’ll be able to hand off the accounting to someone else to deal with, but for now, it’s your responsibility.

Marketing Your Business

Target Clients and Industry

Always focus on carrying forward past relationships. This is a very personal business, and even if you can’t keep up with everyone, you can make an effort to periodically remind clients that you exist. Remember that you are fulfilling a specific niche that the client needs your expertise on to solve. It likely wasn’t an expected issue, so you’ll want to be the first name that comes up in an emergency. Word of mouth is your most powerful marketing tool, but that shouldn’t dissuade you from using other tactics, such as public speaking or social media, once you have the time or money.


A center of marketing your brand is location. You need to consider not only where do you operate geographically and within the industry, but where will you physically do your work. Many consultancy businesses start out with a home office, which can have a lot of benefits. Even when you have a few team members, there’s no reason why you have to upgrade to an office suite immediately. Besides, depending on your field, you might find yourself consulting onsite more than in the office. Consider your field and your style of business when making these important decisions.


Don’t waste your time marketing your services to people who will never use them. If your services only serve a specific niche (which they should if you want to remain competitive), then only a specific set of people will even be remotely interested. When going over your services with potential clients, it’s always better to lower their expectations and then overperform. At the same time, you want to be paid what your worth. You can strike this balance best early, so be very clear with the client what services you are offering.

Founding a consulting company takes a lot of effort, but the payoff can be well worth it. Assuming that your have a marketable expertise and industry know-how, you can definitely use previous business contacts as a jumping off point. However, it’s a whole different ball game once you have your own business, no matter the industry. Start out well ahead of time and with a solid plan.

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