Being a consultant is a hot profession right now. Businesses are increasingly engaging specialists to come in, share their knowledge, and offer advice to improve their services and operations. Keen to get in on the game? Here are the top five questions you should ask yourself before starting a consultancy.
1. What is my niche?
The most successful consultants are already highly specialised. They’ve found their niche by carefully narrowing down their area of expertise based on their skills set and experience. Without a niche, it will be harder to define your offering and how you should be marketing yourself. You should also figure out where exactly in the market there is a need for your services, so you can target the right prospects.
2. Am I qualified enough?
While you may have a real interest in small business IT, non-for-profit communications, or travel insurance, interest alone is rarely enough. To offer a valuable consulting service to businesses in those areas, you should make sure your qualifications add up. There’s no consultancy course per se, so you should have at least a degree in your desired field, and a good amount of work experience to back it up. Additional certifications and licences (if required in your field) can support your credibility.
3. Am I the right fit?
It takes a certain personality to be a great consultant. Along with the right qualifications, knowledge and experience, having the right amount of soft skills will be advantageous. The best consultants are good with people and able to adapt swiftly to new situations. They are often brought on to resolve delicate business matters, so ask yourself whether you are willing to ask the difficult questions and make tough calls. So, it helps to be strong-minded, an excellent leader, and a problem-solver. You should also be willing to invest time in keeping up with industry changes and trends.
4. How will I operate?
Before you start your consultancy business, you should choose a business structure that suits your purpose. If it’s just you, being a sole trader working from home seems like a good choice, especially when starting out. It’s an affordable option and easy to set up. However, it may limit your capability for growth. Are you going into business with someone else? Then a consultancy partnership can be a good option. Here, all decisions and liabilities, including taxes, are shared. However, if you’re objective is growth, a company business structure might be the better alternative.
5. Are my finances organised?
Being financially prepared is critical in any line of business. This includes doing your projections, knowing your borrowing options, ensuring you have enough cash to get up and running, and setting your fees. Determining your price point can be tricky, especially in the beginning. You should also think about how you will manage your books, cash flow, invoicing, and prepare for tax time. Investing in automated accounting software, such as QuickBooks Online, can make those things a whole lot easier.