5 Steps to Starting a Freelance Consulting Business
Starting a freelance consulting business might be the most relevant move to take for your career. Between 2020 and 2022, the total freelance workforce expanded by 69%, with the number of full-time freelancers rising from 13.6 million to 21.6 million. Moreover, as businesses adapt to economic uncertainty and seek specialized expertise, 90% of corporate leaders have expressed interest in engaging independent consultants to tackle these challenges efficiently.
Given this growing demand for specialized skills and the increasing reliance on independent consultants, now is an opportune time to establish a freelance consulting business. Companies are actively seeking flexible, high-value expertise without the long-term commitment of traditional hires. As a result, becoming an independent consultant offers both financial and professional advantages, allowing individuals to leverage their expertise, gain autonomy, and tap into a thriving market with significant earning potential.
In this article, we will discuss the 5 steps that will help you get started with your freelance consulting business.
Step #1: Mentally Prepare Yourself to starting a freelance consulting business
So, how to be a business consultant who is ready to quit their day job and start a consulting business? Well, it all starts with the right mindset. Before you deeply invest in learning how to start a consulting business, you should take some time to mentally prepare yourself for the journey. Even when you start a freelance consulting business, you’re still running a business and it is way different from being a consultant who is employed by a corporation.
Be aware that unlike your day job which provides a steady salary, freelancing might come with a fluctuating revenue. Some months may be profitable, and some months could be average. But there are chances that you may earn more income than your day job. Secondly, as a freelancer, you’re responsible to find clients yourself. Some of these clients may turn into regulars and offer your business a steady source of income and referrals. The bottom line is: you should train your mind to be steady in uncertain situations if you want to be a successful freelance consultant.
Step #2: Create a Freelance Consulting Business Plan
Once you’re mentally ready to take the plunge, it’s time to get your fingers on your laptop (or a piece of paper) and start creating your consulting business plan. There are several ways to create business plans and the internet is filled with free business plan templates. But here are some key things you need to include in your consulting business plan:
- Why you do what you do
- Your vision: Where do you want to take your consulting business?
- Who is your target audience?
- What problems do they have and how are you going to solve them?
- A list of your services
- Marketing strategy
- A brief analysis of the industry you’re trying to get into
- Client acquisition strategy: How are you going to find clients?
- Competitor’s analysis: This includes other freelance consultants as well as consulting firms
- Finances: How much money you need to get started, costs of running the business, and the expected revenue
Sure, you can add or remove things at your own discretion, but make sure you do have a consulting business plan before you move forward. It helps you see your goals clearly and head in the right direction.
Step #3: Create Personas of Your Ideal Clients
You can spend hours learning how to start a consulting business, but ultimately, it's the clients who will be the lifeblood of your business. As a matter of fact, a vast majority of businesses fail because of a lack of customers. That’s why you should understand your ideal customers as closely as you can. In the industry, a lot of successful businesses create client personas to get to know their target audience better. Here’s what a client persona includes:
- Demographics: Age, gender, family structure, education level, income, etc.
- The professional goals they want to achieve, such as increase revenue by 20% in 3 months.
- Their pain points. For example, difficulty expanding the business internationally.
- Their opinions about your services: Have they heard of consultants? Are they open to hiring them? Do they prefer consulting firms or freelance consultants?
To create client personas, you should talk to several people in your target market and ask them about their goals and pain points. You will notice that all members of your target audience have some similarities and this will help you understand them better.
Step #4: Get in Touch With a Freelance Consulting Platform when starting a freelance consulting business
Finding new projects as a freelancer, especially when you’re a beginner, may be challenging. There are several ways to find new clients—social media, job search websites, networking events, etc. However, freelance consulting platforms make your client hunt very convenient. The process is quite simple—get in touch with an online consulting platform and state your educational qualifications, work experience, achievements, and professional goals. Then, leave the rest to them. If a new project, for which you may be a suitable candidate, comes up, freelance consulting platforms will contact you.
Before applying, it's important to explore all the available platforms and choose the ones that best align with your expertise and goals. To help with this, you can check out The Ultimate Guide to Consulting Platforms, which provides insights into different platforms and how to choose the right one. Additionally, Why Consultport: Shaping the Future of Consulting explores how Consultport is transforming the industry and why it could be a great fit for independent consultants.
The best part is, these platforms are consistently visited by businesses that are actively looking to hire freelance consultants. This means that you don’t have to work as hard to close a sale as you would have to when you’re communicating with businesses that are not even looking for consultants. In short, freelance consulting platforms already close half of the sale on your behalf—it’s your job to close the other half.
Step #5: Meet an Accountant and a Legal Advisor before starting a freelance consulting business
When you’re an employee, your employer usually handles all the financial and legal issues on the company’s behalf for the most part. But as a consulting business owner, you’ll have to do some paperwork that is not related to consulting. When you’re in the process of learning how to start a consulting business, you may unknowingly make some mistakes that you shouldn’t, for example, not knowing your tax obligations or excluding important clauses from a contract.
For this reason, it is advised that you seek help from finance and tax experts as well as lawyers who are well-versed in creating business contracts. Meeting with a specialized accountant before launching your independent consulting business is crucial to ensure that you’re fully prepared to handle financial obligations, optimize tax efficiency, and maintain compliance with regulations. One way to make this process easier is by connecting with Accountants for Management Consultants from GoForma, who specialize in guiding consultants through financial planning and setup. Taking this step can save you from costly mistakes and set you up for long-term success.
In conclusion, starting a freelance consulting business may be the best decision you’ll ever make. You will get to choose your own work hours, locations, and projects. However, change is not always pretty and there will be a lot to learn. But if you follow the right process, you could join the league of successful freelance consultants who’re living their lives on their terms.
on a weekly basis.