How To Set Up And Grow A Consultancy Business – Consulting Success Series

How To Set Up And Grow A Consultancy Business - Consulting Success SeriesIn this article I look at how to set up and grow a consultancy business, both from the eyes of my own marketing consulting business established in 2003 and through my consultancy clients eyes.

I have worked with a lot of consultancy businesses. Some are incredibly successful, whether run as a one man/woman operation or as a small team, others seem to face a perennial struggle to attract, convert and keep their consulting clients.

It has lead to me doing a lot of thinking about what makes for a successful consulting business. What are the key traits, what must a consultancy business owner do, and perhaps equally as importantly, what must they not do!

If you are considering starting a consulting business, or you have an established consultancy business already but would like it to grow more quickly, or to change your model to allow you more time off, then this article will give you some solid ideas, based on real consultancy business stories, to show you what you need to do.

Setting Up A Consulting Business

There are so many issues to consider when setting up your consultancy business.

Here are the biggest ones that I commonly come across:

  1. Should I just dismiss the idea of running my own consulting business?
  2. Does anyone actually need the consultancy service that I aim to provide?
  3. Should I start my consultancy business whilst still employed or shall I leave my job to start it?

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Should I just dismiss the idea of running my own consulting business?

This one should be quite easy. You will know if you have that passion burning inside of you to run your own business.

You will know if you have had enough of doing all of the long hours that you put in and someone else gets the vast majority of the financial benefit of your time rather than yourself.

You will know if you have simply had enough of answering to the boss.

For me, I had known for the majority of my legal career that I would start up my own marketing consultancy business.

I was good at marketing. I liked, no loved, marketing. I didn’t like the practice of being a solicitor. I didn’t particularly enjoy being a solicitor at all. I liked the ‘identity’ and it certainly pleased my mother who had always wanted me to be a solicitor; but I had no burning passion to do it. The truth is that I only became a solicitor for two reasons:

  1. I left college after one year of my A levels course. I was bored beyond belief with the education system. I wanted to get out into the world and earn some money and do something except learn information which would be of no use the second I left the education system. With a son having recently gone through the A Level system, nothing has changed. They still do nothing to prepare students for the real world. Don’t get me started on this one… a rant for another day and something that I would love to influence a dramatic change in. However, for my part, education was finished for me, so I went into the big world. I did lots of temping jobs, worked in hotels in Devond then spent six months sailing around Corfu working for a flotilla sailing company. On my return I was asked back to the hotel in Devond to work through the winter. As it was very quiet, this involved a lot of decorating. I became so bored that I decided I had to do something which used my brain, yet I did not want to go back to full time education; I liked to earn my keep. I discovered that I could learn and work at the same time as a Legal Executive and then qualify as a solicitor.
  2. To please my mother and father who had been hugely disappointed when I had not completed my A Levels. They had hoped and expected that I would follow my brother and go to university. This pleased them immensely.

Now that you know this about me, you will understand that my passion and skill for marketing shone through.

I started off by doing the marketing to generate my own clients. However, before long I was then asked to do all of the marketing for the department of which I was a member and not long after that, the marketing for the entire firm.

Whilst I thought that I was doing reasonably well, from time to time I thought I better check that I was not missing anything.

I would bring in a sales or marketing consultant, run all of my activities past them, pay them several thousand pounds to only be told that I was doing all that I needed to.

Whilst it gave me peace of mind, it also made me realise that I was doing a better job at marketing than most people who spent their entire day doing marketing. I was very envious of them and decided that this was my future. I would, one day, set up my marketing consultancy business.

However, there was a problem, well two if I am honest:

  1. Nobody knew who I was; and
  2. My legal salary kept on getting bigger.

I discounted the second problem, for the time being, and decided that I needed to be better known in the legal world so that my first marketing consultancy clients could come from there.

I left a firm in Reading and moved to a larger firm in Bristol which I knew had connections across England and Wales.

Before long I was speaking at large conferences packed with solicitors who ran their own law firms. Sadly, for my part, I was talking about legal topics which were far from interesting, but people now knew who I was.

After two years with the larger firm, I knew that I was much closer to my goal of setting up my own marketing consultancy.

However, I had never been fully employed purely for my marketing skills. I had been employed as a solicitor with secondary marketing skills.

I applied for and got a job with a law firm as their marketing manager.

After one year in this position, I was itching to start my own consultancy practice. I had proved that I could do what I wanted to do, but it was the final part that stopped me; leaving behind a salary.

I was only in this job for a year but I was ready to go.

Then something wonderful happened; I snapped my Achilles tendon.

I know. Not many people would see that as a wonderful event in their lives, but with 6 weeks convalescing at home, I knew that I simply could not return to employment. I had to leave, so I did.

Now you expect me to go straight into my marketing consultancy here, I expect, and why wouldn’t you?

However, I am sharing my all with you here because the idea of this article is that you learn from it and do not make the same mistakes that I did.

I want you to set up and grow your consulting business but to save yourself from all of the mistakes that I made along the way.

This mistake was huge and costly.

For some reason, only known to me, I decided that I could not go straight from being a solicitor to a marketing consultant running my own business. “Who would trust me to help them grow their business if I had never run my own?” I kept saying to myself. I now know that nobody would have cared, because I have never been asked and when I discussed it with my early clients they would have employed my consultancy services immediately because I had built up enough credit with them from my legal days. Ergh!

What did I do?

I bought a franchise for around £20,000 (in 2003!) selling promotional merchandise; pens, golf umbrellas etc.

I worked my bits off for a year, turned over as much in that industry as anyone had ever done in one year from a standing start, attended exhibitions, networked like a demon, gave talks, made cold calls and did everything required to generate sales and guess what; I made practically no profit.

There was simply no money in the business.

I wasted 18 months and built up a huge stack of credit card debt for very little benefit (save that I could now say I had made 70 cold calls a day and done every type of sales and marketing known to man or woman!

I set up my marketing consultancy business and have not looked back since.

So. What about you?

Should you set up your consulting business whilst still employed or go all in?

You have seen my story. I went all in, but not on the thing that I ultimately wanted to do, on something completely different that I had no real interest in. I made it work as much as it could ever work, but it was a really bad decision.

Now, I not one of those people that says you should start a consultancy business if you have no skills and no experience. If that is what you are looking for, I am afraid you are in the wrong place.

You must have a skill, knowledge or expertise that you have proven over time in your employed role, but now you want to develop that, take it full time and work for many different businesses rather than just the one.

However, if you have all of that in place, don’t make the mistake I made and set up a consulting business which is not based around your primary skill.

That is lesson one for you.

Should you set up your new consulting business whilst employed? For my part, I would strongly advise that if you can do this, then absolutely yes, do it!

I caused myself a huge amount of stress by leaving a good salary, spending £20,000 on a franchise, living off credit cards for a year before finally setting up my consultancy around my core skill of marketing and making some profit.

Looking back, I would definitely have started doing some marketing consultancy on the side whilst I was employed. I would not have set out to be in competition with the firm employing me, but I could easily have marketing a law firm in the North of England, in Ireland, Wales or Scotland.

This would have done three things for me:

  1. Proved that I could sell my service; and
  2. Stopped me making a silly mistake in buying the franchise. I would have realised that the only person who thought that my never having run a business before was a problem was me!
  3. Generated some income making the loss of a full time salary much less of a burden. If I had my time again I would have developed two or three consultancy clients on the side, working evenings and weekends, saved the income to provide a pot to get through the first few months of full time consultancy.

If you are still in employment at the moment, this is my advice to you too.

Sell your consulting skills to someone who is not in competition with your current employer, prove that there is a demand for your skills and generate a fighting pot to make it much easier for you to launch your consultancy business full time and to build up a pot to pay your living expenses and marketing costs (website etc).

I cover the marketing and scaling of your consultancy business in more detail below, but let me just save you from some worry by saying that it absolutely does not have to cost a fortune, and that I share with you below how to get your first consulting clients without spending a penny!

Now I hope that I have answered your question about whether to start your consultancy business whilst employed, let’s look at getting it started!

What do you need to start your consulting business?

All you need to start a consulting business is your skills and your telephone.

I see many consultants stop themselves from ever getting going because they don’t want to start until everything is perfect.

Let me share with you my favourite saying (if you keep this with you at all times it could save you hundreds of thousands of pounds of lost income):

Perfection Kills Momentum!

If you are serious about establishing and growing your consultancy business, the most important aspect of it is that you must build momentum. Marketing needs momentum to start to produce new clients for you and if you strive for perfection you will completely kill that momentum.

You have to understand this and get past this. It could make or break your consulting business.

So what do I mean when I say you can start your consultancy business with just a telephone and your skills.

Let’s look at how you are going to land your first consultancy client which will help you to understand this better.

How to land your first consulting client.

I know that many new consultants fight me on this point, but I have yet to work with many who did not acquire their first clients in this way.

Your first consulting client will come from your EXISTING network.

Someone who already knows you will be happy to give you some money for you to use your skills to improve their business.

I didn’t want this to be the case when I set up my consultancy business; I thought that I should work with someone knew and exciting and properly break free from my past as a solicitor, but guess what? My first few consultancy clients had all seen me talking at legal events, been impressed with how I presented myself (even though I was talking about legal not marketing matters) and were prepared to invest some money in my new consulting business to see if I could help them.

There will be people willing to do precisely the same for you and allow you to launch your consulting business.

It is for this reason that you do not need to worry about investing hundreds or thousands into a singing and dancing website (which won’t do anything for you for quite some time anyway) or to beautiful business cards (I had them at the start but never bother anymore).

You just need your skills and your telephone. Then you make contact with your network, preferably directly on the telephone or at least via LinkedIn.

You explain that you have some capacity and that you believe that you might be able to help their business.

Your first few consulting clients will be easier to find than you could ever have imagined.

However, what are you going to charge for your services? Let’s have a look at pricing now.

Pricing Your New Consultancy Services.

This can be a really painful process for new consultants. How on earth do you work out what you should charge for your consulting services? What is a good price? What is a fair price? Can you really charge £100, £200, £500 or £1,000 and should you charge for a project, per hour or day or per month.

I will give you some advice on all of these aspects, but first let me give you some contrarian advice which will go against all of the wonderful, sensible, painfully earned advice in a moment:

It doesn’t matter what you charge for your consultancy services at first; just get one client to pay you something, anything, to prove to yourself that you can do it!

You will have so many doubts when setting up your consultancy business that all that matters is that you sell something to somebody for something.

Don’t ever give your skill set away for free because then something dreadful happens; your client values it accordingly.

Free is worth every penny.

Your client has to pay something or they will not ‘buy in’ to your services, which means that they won’t give you the time that you need or the attention and most importantly, they won’t take the action needed to make it work.

You need some clients at the beginning of your consultancy business to prove to yourself and the outside world that you can sell your services.

With this in mind, this is how I would recommend that you go about this.

Explain to your clients that you realise you are new to them in your new consulting role, but that if they take the leap of faith in you they can access you for a special rate as long as they agree to provide a full case study and review of your consultancy services. Explain that your rate will normally be in the future, for example, £1,000 but if they agree to providing you with the case study and review they can access them for the lower fee of £500.

The amount of the fee should be determined by you. Only you will know the potential value that your skill set will add to their business, and you should try and quantify this because value based pricing is absolutely the easiest way to get the right price for your services, but getting your first sale and case study is the most important thing when starting your consulting business.

I know from experience of starting my own consulting business and advising other consultants in doing the same that you will soon push your prices up once you have proved that you can get results for your clients. If you are at the start up phase now, you have an exciting time ahead.

This is what is going to happen to you and your pricing:

  1. You sell successfully to your first consultancy client at a low price to get them on board and get your case study.
  2. You start to run the project for them and realise how much value you are adding.
  3. You start to resent the price that you are charging them because you realise that you went in way too low.
  4. You vow to put the price up to your next client.
  5. You recruit your next client at a fee of 50% more than your last client.
  6. You start to run the project for them and realise how much value you are adding.
  7. You start to resent the price that you are charging them because you realise that you went in way too low.
  8. You vow to put the price up to your next client.
  9. Rinse and repeat this process throughout your consulting business years :).

You might not believe me now if you are just starting up your consulting business, but you will come back and smile at this in the not too distant future, I can assure you.

The key thing is to sell your first piece of consultancy advice or service, then to move on from there.

Prove to yourself that you can do it and you will soon be growing a successful, profitable consultancy business.

Running your consultancy business full time.

Once you have proved that you can sell your consultancy services, you will soon reach a point that you are ready to do so full time.

You will know that you can replace your current income and will start to resent the wasted hours spent whilst you are attending to your job.

It is now time to go full time.

Where are you going to work from and what will your working day look like?

Working from home or an office?

I started off working from home, but it wasn’t for me.

I don’t know what it was about working from home, but possibly because I had spent 14 years working as a solicitor chained to a desk, I struggled to work from home. When you add to this the fact that there were two young children at home, perhaps it was not a surprise that I struggled.

However, I know other consultants who have loved working from home and really enjoy the flexibility that it brings.

I just know that my business really took off when I rented an office. I still have one to this day and would not be without it.

The good news now is that it is so much easier to find flexible office space. My first office was on a five year lease, which felt like a big gamble at the time. However, since then there are dozens of offices available on month by month licences, so you can now obtain an office without a long term financial commitment.

Wherever you decide to work, when you start your consulting business full time it is incredibly important that you are very focused with your working day.

Your working day

If I could offer you one piece of advice, sunscreen would be it. Do you remember that song by Baz Lurman?

But seriously (I am on a roll – that was a Phil Collins album), if I could offer you one piece of advice, it would be to set yourself one major task for every week and to complete it.

If you do this every week for 48 weeks of the year (you must take some time off to recharge) your consultancy business cannot fail to grow.

This is so important that I created my own daily and weekly planner (perhaps because as a solicitor I was used to completing daily work sheets) so I took that discipline with me into the marketing world.

If you would like a copy of my daily planner, simply download my free guide to growing a consultancy business by clicking the button below, enter your details and then when I send you the guide by email, simply reply to my first email to you asking for my daily planner and I will gladly send this to you free of charge:

CLICK HERE to Download My 6 Figure Consultancy Guide :>>

Being disciplined with your business and particularly the marketing of your consulting business is crucial to your success.

My advice is and always has been that you should spend the first 30 minutes of every working day working ON THE MARKETING of your business.

At the beginning of your consultancy business you can spend even longer than this because you will have the time.

Invest that time wisely at the start up phase of your consulting business and it will reward you handsomely for years to come.

Now would seem an appropriate time to talk about how to market your consultancy business to ensure that it grows.

Marketing Your Consulting Business

What does a consultancy business owner have to do to grow their consultancy business?

A few things. No, a few important things.

These include:

  • The right positioning strategy
  • The right pricing strategy
  • Automated marketing systems that consistently deliver new leads
  • The right process to turn these enquiries into new clients

That all sounds incredibly dull, doesn’t it?

Would you like me to make this much easier for you?

It is incredibly easy for you to grow your consultancy business.

I am being very serious.

How To Grow Your Consultancy BusinessWhen you know the very few things that you need to do to deliver a steady flow of new consultancy clients to your business and you then do those things consistently, then your consultancy business becomes so very much more successful.

If you would like to know all that you need to know to grow your consultancy business, using the same methods that I have used to grow my own, simply click the button below and let me show you:

CLICK HERE to Download My 6 Figure Consultancy Guide :>>