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Are you interested in becoming a business consultant? I wrote this post for you!
I’ve been working as a business and brand consultant for about 5 years now, and I was very lucky to come from a family where most of us, at one point or another, have had business consulting clients.
I don’t mean working at a business consulting firm like Goldman Sachs. I mean the type of consulting one does when one has a particular expertise in a business or niche. Where you take on a few clients in your evenings. Maybe you want to develop a full on consulting firm, but you gotta start small.
How to Become a Business Consultant
Sharing What My Family Taught ME!
From retail skincare to logistics to organizational consulting, I’ve really benefitted from hanging out around people who are really good at packaging and charging for their knowledge. Growing up in this environment also showed me the importance of hiring my own business consultants and coaches, so I could level up.
But it was only by being raised in an environment where coaching is seen as a “no duh” type of investment. Where dropping 205 of m income on coaching was supported and encouraged.
I Want to Help YOU! | Starting Your Business Consulting Side Hustle
Below, I’ve shared a good chunk of the freemium advice my family members taught me, with the hopes that it will help you level up your game and start charging bucko bucks!
Bookmark those resources, and let’s get started on your setup!
Note: There’s NO WAY I’d be able to cover absolutely everything in this post. At the end of the day, this post is meant to give you things to think about – and tips on where to go next with your business set-up!
Pre-Work: Check Current Contracts & Employment Agreements
When starting a new job, you’re usually inundated with paperwork. Lots of paper.
Somewhere along the way, you may have signed a contract or employment agreement saying you would NOT take outside consulting clients. Before powering up your new side business, make sure to check with your HR department or employer to be sure you haven’t signed this right away // they won’t fire you if you do take on clients.
Having that conversation can be tricky, hence item #3!
Item #1: Becoming a Business Consultant – Calendar Raising Your Rates
Okay, so the #1 rule of setting your rate is this:
Continuously raise it.
Put in a snarky way, “Always be raising it.”
Many people arbitrarily choose a consulting rate, be it $50 or $500 or $5,000 – and they leave it there. No no no. For every 3-4 clients you get, you want to raise your rate anywhere from 10-25%.
You’ll know to keep it at a certain level for a time when you stop getting clients.
SOOOO many people shortchange themselves, because they stay at the same rate for YEARS, even as their skills grow.
Because it’s easy to put this off, I recommend put “raise rates” as a google calendar reminder every 3-4 months. When you get the notification, treat it like LAW. Raise your MF rates!
Item #2: Becoming a Business Consultant – How Much to Charge per Hour
Okay, so now that you’ve calendared your rate, let’s talk about how to set your initially hourly rate for an hour-long consult.
Options for Setting Your Freelance Consulting Rate:
- Calculate your hourly rate at your job, and double it (this is for taxes and other fees associated with business consulting)
- Ask people in your network what their “ballpark range” is
- Look up what agencies or firms bill as an hourly rate for someone with your skillset (seriously, Google is your friend)
- Say the highest monetary amount you can without laughing
- Figure out the average hourly pay of someone who would hire you, and multiply that by 5. Boom! There’s your starting rate.
- Price according to results
So, methods 1-5 are pretty easy for you to accomplish. Let’s talk about #6.
Charging Based on Results $$$
If a company or person wants to hire you as a business consultant, it’s helpful if you understand how much money you’re going to save them or earn them.
For instance, if you know that your work has saved your current employer hundreds of thousands of dollars then you’re looking at a consulting rate of thousands of dollars, at least.
If you know that your knowledge will save a small business owner 20 hours of their time, you can determine a market rate for the business owner’s time and then multiply that number by 20.
There are a lot of ways to calculate a freelance consulting rate by results, so go off into the Land of Google to decide on yours!
Ask the RIGHT People
It drives me bonkers when I see people post business questions to their personal Facebook profiles, and accept tips from people who have NO EXPERIENCE IN WHAT THEY’RE TALKING ABOUT.
Make it a point to only ask about hourly rates to people you know who have hired consultants, those in your field, etc.
Also, if you’re a woman be sure to ask a man. They (statistically) charge more, and women typically underprice by 30-40%. Ouch!
Item #3: CYA: Cover Your You Know What!! Get a Business Entity & Business Insurance
There are a LOAD of tax benefits that come with operating a small business out of your home (this book has super helpful info on that). If you’re going to be consulting, you definitely want to:
- Discuss whether you should form a business entity with your accountant
- Get Business Insurance
- Get an Accountant
I know that all of this can seem really overwhelming. But here’s the fun facts:
- Setting up a business entity as a consultant can sometimes SAVE a person more money on their taxes than they earn through consulting!! (Woo! Write offs!)
- Wealthy people plan for taxes year round. If you’re getting into consulting, it’s because you care about money and would appreciate more of it in your bank account, thank you very much! Managing more $$$ means having a team of money cheerleaders who can help you spend it correctly.
You can write off a lot of expenses as a business owner that you can’t write off as someone who only works as an employee. Let’s get that money!!
!!! PAUSE !!! Are you finding this info useful?
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Item #4: How to Become a Business Consultant: Get a Consulting Contract
There are whole blog posts out there dedicated to drafting a consulting contract, but the TLDR version is that you want to limit your liability.
If something goes awry with a client, you need to have a contract in place that protects you from getting sued.
Now, I’m not a lawyer (IANAL!), so my advice? Hire a business lawyer to make you a contract (that’s a tax write off!), and use that.
Item #5: Find Business Consulting Clients by Sharing Your Knowledge
Fun factoid: Looking over my consulting clients, about 90% of them come through as referrals and about 10% and me through free content I’ve shared.
A few years ago, that ratio was more 60%-70% referrals and 30%-40% finding me through resrouces I’ve shared.
As your building up a client list, referrals are GOLD. If someone vouches for you and your skillset to their friend or colleague, their weight carries much more than any pitch or description of services you can offer.
How Will Clients Find You?
But while you’re building up that roster of clients who love you, you’re going to want to create content for people to find.
People are Googling questions they want the answer to RIGHT NOW, and a good chunk of those people would like to just pay someone for an hour of their time instead of researching and swearing at their computer for 10+ hours.
These people will find you on the internet, see you know what you’re talking about and promptly book a call!
But those people can’t find you if you haven’t created resources!
Blog Once a Week to Get Business Consulting Clients
So, once a week your job is to handcuff yourself to your desk and write a 500 word blog post with advice on a topic you consult on. This does not (and should not!!) be a groundbreaking piece of content. You can write about topics you get asked a lot about, you can blog about topics that tick you off, etc.
And your content will NOT be original. You’re going to write these posts and feel like a bit of an idiot, because it feels like a LOT of people in your industry have written about these topics.
But you haven’t shared YOUR take. There are people out there who will find the content your colleagues and competitors have put out there, but NO ONE is you!
But people won’t be able to hire you if they can’t find you!
So blog 1x a week (I would suggest starting on Medium, it’s free and really easy).
Item #6: How to Become a Business Consultant – TELL People You’re Consulting
This is similar to #4. You need to regularly remind the inhabitants of planet earth that you are available for consulting.
Here are a few ways:
- When you write a blog post you’ll share that you consult in a specific industry, and include your contact info.
- You’ll add that you are available for one-off or longterm consulting to your LinkedIn summary, and you’ll include the niches you consult for.
- You’ll mention your consulting work to other people in your industry or professional contacts as you see them. You don’t need to brag about offering consulting, you can just mention your clients or share insights you’ve learned.
- You’ll have a few hundred business cards made that are for your consulting work only!
- You’ll eventually pitch yourself to speak on podcasts
Now, I know that people worry about being too “self-promotey” (I wrote a post on overcoming that HERE). If you show up with the desire to make authentic connections and provide real value to others, you won’t be self-promotey.
But, also – isn’t it your job to promote yourself? Like, who else is going to do it if you don’t? Your #1 job is the care and keeping of you, and you don’t need to apologize for this!
Item #7: Decline 20% (ish) of Inquiries
Here’s the thing. You’re not going to be a fit for ever person who pops in your email inbox. I refer anywhere from 20-50% of inquiries I get to other people, because I know what I’m good at and what I have no business doing.
And the people I refer elsewhere often refer other people to me, because of this! Nobody wants to work with someone who will say anything to get a consulting fee! Doing this makes it clear I’m trustworthy, and I put my money where my mouth is.
For this reason, minimum 20% of the people who reach out to you shouldn’t end up hiring you. If you’re signing 100% of inquiries it either means you’re cheap as dirt orrrrr you’re bending the truth. Neither is a good look!
What to Read Next –>
Here are a few of my other posts I think you will learn from:
- Questions to Ask a Small Business Accountant
- What to Pay a Social Media Marketer
- Negotiating your Salary