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How To Start & Fund A Consulting Business
The Step-By-Step Guide
/ 18th November 2022Life coaching or consulting business has been one of the fastest-growing industries worldwide. According to the study by ICF Global Coaching in 2020, the average annual revenue generated from coaching is $47,100 globally. In the United States, the percentage will increase by 2.4% in 2022. Moreover, the market size of the business coaching industry in the US measured by revenue will be 11.2bn in 2022.
Setting up any business is a struggle. But starting an online consulting business is double challenging. It takes more than knowledge and expertise to build a consulting business.
If you have the expertise & knowledge to help people in their technical and professional fields but struggling to start a consulting business, this definitive guide is for you.
So, if you want to:
- Learn how to start a consulting LLC
- How to fund a consulting business
- Select a suitable niche for your coaching business
- Get clients that pay you well for the coaching
- Understand how to maximize your business’s profits
This ultimate guide is a must-read for you. After reading this guide, you’ll know how to turn
your skills & expertise into a profitable consulting business.
So, Let’s get started!
Step 1- Separate personal & business expenses
Separating personal & business expenses is essential before you start & fund a consulting business. The ideal way to keep your business & private funds separate is to divide them into different bank accounts. So, open a business bank account. Once you open a business account & get a business credit card, you can keep track of your profits & losses.
The prime reason for doing so is to take advantage of tax deductions and reduce potential risk to your private assets from IRS audit.
Step 2: Identify your niche
You might have heard: “Jack of all trades, master of none.”
Clients hire business consultants to solve the problems they’re unable to solve. They pay them for the solution to their specific issue. They do not want someone who has a little bit of knowledge of everything. Instead, they like to hire a specialized consultant with having a deep understanding of a particular field. So, it’s essential to identify your niche.
Identifying your niche is about selecting your target audience to whom you’ll be serving. Your own skills and experience can be applied to this field. So, consider your knowledge and expertise within an industry while finding your niche.
Moreover, it’s vital to keep yourself up-to-date with the changing trends in the industry to advise your clients in the best possible way. Ask the following questions to yourself while picking up your niche:
➢ Do you have enough knowledge about your niche?
➢ What kind of problems, questions, and pain points do businesses face in your niche?
➢ Will your niche gives you abundant clients?
➢ Are the clients willing to pay you?
➢ Is it profitable?
Step 3: Register your business
Once you’ve chosen your niche, the next step is to register your business against that specific niche. To register your coaching business, follow the following steps:
1. Choose your business model: You need to decide whether you want to operate your business as a sole proprietor or LLC (Limited Liability Company).
2. Register a business name: For launching your business, you need to register your business name with the secretary of state according to the U.S. Small Business Association.
3. Get your EIN: The employer identification number will help you open a business bank account & hire employees.
Step 4: Set your coaching rates
After selecting your niche and registration of your business, now set up a price for your coaching. Charging too much and too little won’t let you sustain in the market for long. Either you’ll lose your clients or lose interest in your business due to low revenue. So, set your prices according to the quality of service you’re providing or the painfulness of the problem you’re solving.
The ideal way is to set hourly fees or project-based fees. Clients are looking for solutions to their problems so, they usually opt for the project-based package. It is because they want outcomes and not a simple coaching session.
Step 5: Market your business
To build a consulting business, you need to run successful marketing campaigns to get clients. A marketing & advertising campaign will help you boost your business & generate revenue. It will help with your business’s branding, product promotion, and pricing to attract traffic and sales. Your marketing strategy depends on your budget and business goals.
Step 6: Get business insurance
Getting business insurance is critical to protect it from unforeseen circumstances. There are two types of business insurance.
❖ Liability insurance: It covers the costs of lawsuits that include attorney fees, court fees, settlement expenses, etc.
❖ Property insurance. It covers the costs of property damage such as fire, theft, and natural disasters.
So, to avoid extra costs in case of any mishap, having business insurance is essential.
Step 7: Set Up a website
For a successful consulting business, you must be easily accessible. Without having a website, your clients will have difficulty finding you. For starting an online consulting business, you must have a website.
Set up an impressive business website. Your website will provide information about your niche, coaching sessions, & price packages. In short, It will provide essential information to your clients about your company.
Step 8: Enhance your web presence
To enhance your web presence, create an eye-catching and search-engine-optimized website. Your website interface must have quick loading pages, interactive design, and optimized images. The blogs & articles about your consulting services will also drive traffic and increase sales. Moreover, to enhance your web presence, regularly optimize web pages, & post relevant content.
Step 9: Seek business funding
Starting a consulting business doesn’t need a huge amount of funds. But, the amount of business funding you need also depends on your business goals. For example, starting an online consulting business requires little investment. While having a physical office requires more capital. Whether you start online or have an office-based business, you need funds. So, you have the following options to seek business funding:
- Savings: When you plan to start a business, you start saving a part of your income for that. So, using your savings is the best option as you don’t have to pay interest in case of loans.
- Equipment loan: If you don’t have any savings, apply for equipment financing. You can buy office equipment for your business through equipment financing.
- Personal loan: New businesses usually do not meet the criteria for business loans. So, you can apply for a personal loan and use it for business purposes.
Conclusion
Setting up a consulting business takes a lot of time, hard work, and money for advertisement especially if you are navigating business finance and taxes for the first time. Moreover, separating personal and business finances can also be overwhelming for the first time.
Once you’ve selected your niche and got your business registered, all you need to do is establish an online presence and spend money on advertisements.
So, now have a guide that gives you the process of building a profitable consulting business. You can consult. Use this information to start your consulting company.
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