How to Start a Consulting Business

Want to start a consulting business but not sure how? You’ve come to the right place. At Foundr, we’re not about fluff. We’re about giving you the actionable information you need to turn your million-dollar idea into a million dollars worth of revenue.

We’re also all about helping you learn in the way that works best for you. Do you prefer to get your information by reading? Buckle up. This guide is for you, and we are going to dig in and show you how to start a consulting business brick by brick. Prefer to learn by watching? Check out the free Start Your Side Hustle mini-course.

Time is ticking. Let’s dig in so you can start your new business and be on your way to becoming a highly successful consultant.

How Much Does It Cost to Start a Consulting Business?

Startup costs for a consulting business can range anywhere from a few hundred dollars to around $10,000.

What to Consider Before Starting Your Consulting Business

Before starting your own consulting firm, consider these 3 questions.

Are you qualified to be a consultant?

Before beginning, ensure that you have the qualifications to consult in your desired industry. You want to ensure that you’re selling services that you can deliver. If you plan to work as a marketing consultant, do you have a proven track record of success? If you’re working as a computer consultant, do you have specific experience and training to ensure you can do the job?

Do you have the necessary licenses or certifications?

Even if you’re starting your business from home, you will likely want to procure a business license for your consulting work. A business license provides a few key benefits. First, it demonstrates the legitimacy of your business to customers, which can help attract potential clients. Some clients will even require it.

Some consulting niches may require certifications. Even if your specialty doesn’t, certifications may prove your expertise and bolster your marketing efforts.

Do you like to network and work with other people?

While introverts and ambiverts can make highly successful consultants, the consulting industry is best suited to extroverts—especially if you’re going out on your own. Networking, specifically, will be a crucial element of growing your business.

Steps to Creating a Consulting Business

You came here to learn how to start a consulting business, and we’re here to help you make it happen. Here are the 8 concrete steps you need to take to get your consulting service up and running.

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1. Determine Your Consulting Specialty

You will determine your specialty by considering the expertise you possess in relation to market demands.

  • Begin by taking inventory of the skills and expertise you’ve cultivated throughout your career, the industries you’ve worked in, and the customers you’ve helped. Now is the time to brainstorm. Write down anything that comes to mind. Pay special attention to the big wins you’ve had and the KPIs you’ve consistently outperformed.
  • Look for patterns that emerge from your list.
  • What work do you genuinely enjoy doing? The benefit of being a consultant means you get to determine your scope of work. You can choose to do the work that makes you feel engaged and inspired.

Types of Consultants

These in-demand niches will give you a leg up in building a successful consulting business.

  • Operations consultant
  • Marketing and sales consultant
  • IT consultant
  • Project management consultant
  • Human resources consultant
  • Management consultant
  • Social media consultant
  • Business coach

2. Choose a Business Model That Best Fits Your Business

There are 3 options to choose from when starting your consulting business.

Independent Contractor

If you’re working as an independent consultant, you may want to work as an independent contractor. As a 1099 consultant, you’re incredibly agile. You can begin offering consulting services today, and it may be easier for some clients to onboard you. (For example, a company may require review for hiring an agency but not a contractor.)

On the flip side, there are some drawbacks to this business structure. Some larger enterprise clients may prefer to work with a consulting firm, plus you’ll likely have to pay higher tax rates as an independent contractor.

Sole Proprietorship

As a sole proprietor, you can offer consulting services with the agility of an independent contractor and the apparent credibility of a full-scale consulting firm.

Consulting Firm (S-Corp, C-Corp, or LLC)

If you’re planning to start a consulting company, you’ll definitely want to go with a business model that’s built to accommodate employees. You can learn more about the different options for incorporating your business and weigh advice from expert attorneys with our guide.

3. Identify Your Target Client

Your marketing will be most successful if it’s targeted toward your ideal client. While it may seem counterintuitive, beginning with a narrow focus may open you up to more potential business. That’s because once you get specific about who your ideal client is, you can create a marketing plan directed toward that person or company, addressing their particular pain points and needs.

For the full rundown on how to identify your ideal client, check out our complete guide to defining your target market.

4. Create Your Consulting Brand

Your brand determines what differentiates you from other consultants. When starting a consulting business, you’ll want to assess your brand identity, name, logo, tagline, design, and voice. For an in-depth walkthrough of branding, check out “The Small Business Guide to Branding.”

It’s likely that as your consulting business grows and evolves, your brand will evolve with it. That’s OK! You still want to outline your brand guidelines now to have clear, consistent messaging when reaching out to a prospective client. This will build credibility and make you look like the expert that you are.

5. Develop a Consulting Proposal

Your consulting proposal works as a sales tool to attract new clients and as a document that outlines everything you will deliver for a potential project or client. For step-by-step directions, check out our guide to writing the perfect consulting proposal.

You will need to tailor your proposal for each individual client and project, but you can create a template that outlines the basic consulting services you plan to offer. This preparation will streamline the proposal process and allow you to provide quick turnarounds when pitching prospective clients.

Within each proposal, you’ll want to ensure you do 3 things. You want to ensure you understand the client’s wants and needs, create a unique value proposition, and outline the scope and timeline of the project.

Each consulting proposal should include the following elements:

  • Cover page
  • Executive summary
  • Project outline/scope of work
  • Timeline for the deliverables
  • Your fees
  • Payment terms
  • Client requirements
  • Expiration date of the proposal

As you begin pitching clients, you’ll work to refine your proposal, identifying what works and weeding out what doesn’t until you’ve crafted a proposal that wins every time.

6. Determine Your Consulting Pricing

Determining your pricing is the final step before launching your consulting business. You can follow these 5 best practices for defining your pricing.

  1. Estimate your value: Your value is determined by the results your consulting work provides to a client rather than the work you put into it. What will your work give to the client? Increased web traffic? Leads? Business-changing insights? A streamlined talent acquisition process? Technological improvements that reduce lead time? These impacts all have a direct effect on revenue. Determine what impact your work will have on the client’s bottom line.
  2. Determine the scope of work: Predict the amount of work and labor required to deliver what you’ve offered the client.
  3. Calculate your hourly rates: In light of the value you provide to clients (as determined in step one), consider the yearly salary you want to make, divide that to an hourly rate, then mark it up by at least 20%.
  4. Determine the cost per project: When working with a fixed fee, you want to determine the number of hours you anticipate working on the project and calculate the project cost based on your hourly rate. You may also want to add 10% to the anticipated amount to protect yourself from potential scope creep.

For absolutely everything you need to know about setting your pricing (and we mean everything), check out our guide, “Consulting Fees: How Much Should You Charge as a Consultant?”

7. Create a Web Presence

You want to have a strong online presence to market your consulting practice. You need to have a domain to represent your brand, hosting that will give it a home, and a website that highlights what you can offer.

Building a Consulting Website

Start by picking a domain that’s representative of your brand. If your company is called “John Doe Enterprises,” your domain should be “” If you can’t find a .com for your exact company name, then use a variation with the help of the prefix “the” or suffix “agency”. If you need, you can get an alternative top-level domain like a .org or .co.

Next, you’ll need to set up web hosting. While budget web hosting services might seem attractive price-wise, stick to a premium VPS host like WPengine if you’re serious about your online business. Speed and load times are ranking factors that can either make or break your online business.

Now you have all the technical stuff set up, you need to write some copy. Start by explaining what you do and who it serves. This information is known as your value proposition. Make sure to include examples of past work, recommendations, or previous clients as evidence of your skill. If you have no past clients, consider your past employers. If you have a day job doing work similar to what you plan on offering as a consultant, you can ask your former bosses and coworkers for testimonials.

8. Market to Your Audience

Now that you’ve narrowed down your target audience, it’s time to create a marketing plan and roll it out. How do you do that? As we mentioned before, networking is going to be a big part of it.


Ben Baker of Your Brand Marketing, a corporate branding consultancy, says networking was the key to building his client base. “I joined a couple of chambers of commerce, got involved in Business Networking International, and became involved in different marketing organizations,” Baker says. “99% of my clients today still come through referrals.”

Find Consulting Clients Online

If you’re not into the whole “schmoozing at networking events” thing, networking opportunities in online groups are a tap away. Here are some great places to start:

  • Facebook groups
  • Online forums
  • LinkedIn hashtags
  • Slack channels
  • Reddit
  • Quora
  • Twitter chats
  • Meetup

How to Leverage Social Media for Marketing

Social media marketing is essential for a consulting entrepreneur. To get as much out of it as possible, we recommend you follow these steps.

  1. Research the top Facebook groups around your niche. This can be a matter of a Google search, but a great way of grabbing the attention of the people you’ll be interacting with is to post to LinkedIn or Twitter asking for recommendations.
  2. Join all the recommended groups and follow the group owners. While you’re first starting out, expect to spend quite a bit of time in these groups. Becoming a prominent member of a community within your niche will build recognition and trust.
  3. When people post a question or ask for help, broadcast amazing advice to the group. Your role in these communities is to help fellow members, not to sell your services. Be generous with your knowledge, offer excellent resources they can use, even refer them to other members who specialize in areas outside your expertise.
  4. Only promote your services when invited to. Again, focus on building goodwill in your community before reaching out to people with your product. Most Facebook groups have a weekly post where members can pitch their services. And if you’re in the right groups, there are always members asking for recommendations for freelancers, consultants, and coaches.
  5. Reach out to each prospect with a one-to-one “give.” After you’ve had a positive exchange with a prospect in the group, ask if it’s OK to message them directly. Then give them an offer they can’t refuse: a free live consultation, walkthrough, or feedback session.

Get Your Consulting Business Started

You’re one step closer to your dream of becoming a small business owner. Now that you have everything you know, the only thing left is to get started.

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