How to Start a Consulting Business

How to Start a Consulting Business


How to Start Your Own Consulting Business

If you’re looking to start a consulting company, you’ve come to the right place. Since we’re going to show you exactly how to do it.

We’ll start with key consulting industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a consulting business, but succeeding in it!

Importantly, a critical step in starting a consulting firm is to complete your business plan. To help you out, you should download Growthink’s Ultimate Consulting Firm Business Plan Template here.

How Big is the Consulting Industry?

There are approximately 779,699 consulting businesses in the US, and $200.6 billion in revenue was been generated by the consulting industry last year. Over the past 5 years, its annual growth rate has reached 5.2%.

What are the Key Segments of the Consulting Industry?

The two largest segments of the industry are Corporate strategy and Marketing and sales. Organizational design makes up the next largest segment, followed by Process and operations management, Human resources consulting, Financial advisory and IT strategy.

What External Factors Affect the Consulting Industry?

A number of factors affect the performance of the consulting industry. These drivers include:

  • Corporate profit: An increase in the corporate profit signifies that there is a high demand for consulting services among businesses. This also increases the industry revenue.
  • Aggregate private investment: This refers to the value spent by business owners for equipment, properties, and software. When businesses expand their investments, they tend to need more help from consulting companies, so an increase in aggregate private investment is good for the consulting industry.
  • Number of businesses: An increase in the number of businesses also indicates a high demand for services and provides more prospect clients for consultants.
  • Government consumption and investment: As the government expands its investments, the demand for consulting services also increases thus the industry revenue also rises. Government consumption and investment has increased over the last year.

Who are the Key Competitors in the Consulting Industry?

The market leaders, in terms of market share are Accenture PLC (3.3%), McKinsey & Company (2.6%) and Deloitte Touche Tohmatsu (2.7%).

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Consulting Business Plan Template and complete your plan and financial model in hours.

What are the Key Customer Segments in the Consulting Industry?

The key customer segments in the consulting market are Financial services companies, Consumer products companies, Government organizations, Manufacturing companies, Technology and media companies, Individuals and non-profit organizations, Life science and healthcare companies, and Energy and utilities companies organizations.

The Economics of Becoming a Consultant

How to Start a Consulting Business

What are the Key Costs in the Consulting Industry?

Wages – Over half of the consulting industry’s revenue last year is used for wages. It is expected to drop in the next five years.

Purchases and depreciation – Purchases make up almost 10% of the consulting companies’s revenue, while depreciation is 0.9%.

Rent and utilities – Last year, almost 4% of the industry’s revenue is comprised of rent and utilities.

Other – Marketing costs make up 1.8% of consulting industry.

RELATED ARTICLE: Consulting Business Plan

What are the Keys to Launching a Consulting Business?

1. Know your expertise

Identify the field where you can use your skills and knowledge and study everything that you need to know about it. Maximize your strengths and work on improving your weaknesses so you’ll be sure to provide excellent service to your clients.

2. Secure your certifications

Consider taking certifications that are related to your specialization. This will build your reputation and increase your client’s trust and confidence in your business. This also gives you an advantage over non-certified consultants.

3. Consider hiring an employee

Have someone reliable who can work on the administrative tasks that need to get done in your business. This will save you time and effort and keep you focused on taking care of your client’s specific and technical needs.

4. Set your rates right

Determine whether you are setting reasonable rates by looking up other consulting companies’ rates before giving your clients a quotation. Make sure to include in your computation all of the expenses that you would incur in a project especially your professional effort’s worth.

5. Sell yourself

Bump up your marketing efforts and let yourself be known by your potential clients. Advertise the services that you offer and your edge over competitors through word of mouth, print ads, and phone, email, and social media marketing.

6. Value relationships

Remember that you are not your own boss so make your client’s needs a priority. Pay attention to their demands and always be ready to offer solutions that work. Most importantly, establish personal connection with your clients by meeting with them as often as needed.

7. Be emotionally ready

Starting a consulting company also means dealing with a lot of meetings with potential clients that do not end up hiring you. Be prepared on how to deal with such failures professionally. Your target clients will remember you in the way you deal with them and a positive attitude towards an unclosed deal might redeem you the next time they need a service that you offer or meet a friend that needs your expertise.

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Consulting Business Plan Template and complete your plan and financial model in hours.

Consulting by the Numbers

Consulting business statistics infographic

What are the typical startup costs for a consulting business?

Startup cost for new consulting companies range from $10,000 to $50,000.

How much do consulting business operators make?

The average salary for a consulting business operator is $107,553.

Marketing for Consultants

Marketing for Consultants infographic

Management Consulting 101

Consulting: The Engagement Lifecycle & Core

An Insider’s Guide to Building a Successful Consulting Practice

Helpful Videos

Best Business Model for Consultants

Consulting Firm Names: How to Choose the Best One

What the heck does a consultant DO, exactly? – Management Consulting 101

Additional resources in the consulting market

For additional information on the consulting market, consider these industry resources:


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