Entrepreneur magazine - Consulting Business: Step-By-Step Startup Guide

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Entrepreneur Press, Publisher

Cover Design: Jane Maramba

Production and Composition: Eliot House Productions

2014 by Entrepreneur Media, Inc.

All rights reserved.

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This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

Consulting Business: Entrepreneurs Step-by-Step Startup Guide, ISBN: 978-1-59918-548-4 eISBN: 978-1-61308-292-8

Previously published as

Start Your Own Consulting Business, ISBN: 978-1-59918-529-3, 2014 by Entrepreneur Media, Inc., All rights reserved.

Start Your Own Business, 5th Edition, ISBN: 978-1-59918-387-9, 2009 Entrepreneur Media, Inc., All rights reserved.

Printed in the United States of America

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Preface

I f youve been dreaming of leaving your current job to become the chief executive officer of your own small business, youre retired and want to put your knowledge and talents to work in a new business, or you just want to earn some extra money on the side, then youve come to the right place. The book youre holding is your personal roadmap to becoming a self-employed entrepreneur in your own consulting business. It touches on all the groundwork youll need to do to set up that business, from selecting a business name to obtaining business licenses, drumming up work, wrangling financing, and moretasks that are just as necessary for success as your talents and skills will be when you finally hang out your shingle on that first day on the job.

And that day could be pretty scary. After all, you wont be getting a paycheck on the following Friday. You wont have co-workers to commiserate with, or a support staff to cater to your every whim. In fact, possibly for the first time youll be handling tasks youve never done before, like one consultant we know, who said, I ran a corporate business, but a lot of things were done automatically for me. I truly didnt understand [things like] profit and loss statements vs. cash flow statements because I had financial people who worried about those things for me.

We can help. This book contains information on all the major tasks youll encounter on the road to successful self-employment, including the 411 you need on:

Assessing your skills and defining your market

Selecting a legal form of operation and naming your business

Finding business professionals to help run the show

Setting up your home office

Managing daily administrative tasks

Hiring personnel (something that could happen sooner than you think)

Locating professional development resources

Prospecting for clients and promoting your business

Establishing an internet presence

Financing the business and staying in the black

And much more

So no matter whether your consulting business will focus on human resources placement, computer troubleshooting, public relations, meeting planning, or anything else you can dream up, youre about to join the other 10.4 million people in the United States who have decided to seek their fame and fortune armed only with their own talents, capabilities, ambition, and determination.

Enjoy the ride.

The Right Stuff

W hat exactly is a consultant? The word comes from the Latin word for to discuss, while the dictionary defines consultant as an expert in a particular field who works as an advisor either to a company or to another individual. Sounds pretty vague, doesnt it? But interestingly its that very vagueness that gives you the leeway to create a consulting business thats exactly what you want it to be and allows you to do precisely what you want to do.

Businesses certainly understand the value of consultants. According to estimates by Plunkett Research, a provider of industry sector analysis and research, management, scientific, and technical consulting services generated more than $171 billion in revenues in the United States during 2012, while IBISWorld, a provider of industry information, reports that worldwide consulting revenues were $335 billion.

Thats a pretty good indication that the market is wide open for new consultants in virtually every industry.

And theres more good news. The Bureau of Labor Statistics (BLS), U.S. Department of Labor, Occupational Outlook Handbook, reports that employment in the management analyst (aka consultant) field is expected to grow 22 percent through 2020.

But why exactly are consultants in such high demand? First, companies understand the value consultants bring to their organizations by virtue of their experience, expertise, and knowledge. Second, consultants bring fresh ideas and a fresh perspective to projects. And third, companies that have to lay off workers for economic reasons still need to get the work done despite their reduced labor pool.

Taking the Plunge

For their part, independent consultants have different motivations for taking the plunge into self-employment. Some of them are baby boomers who may have worked for yearsor decadesfor one or more companies, and simply are ready for a career that will allow them to call the shots for a change. Others, like Bill Metten, a consultant in Delaware, have been laid off or downsized out of a job and decided to seek a new opportunity that will allow them to use the knowledge theyve acquired on the job.

I was a senior executive for a chemical company when the industry went to pot in the early 1990s, says Metten, who founded his public relations/customer service consulting business in 1991. The company made me an offer I couldnt refuse, and since I had long harbored the desire to have just a few clients and spoil the dickens out of them, I decided to take the plunge.