3 Things to Know before Opening a Consulting Business
More and more people are getting into the field of consulting as technology has made it faster and easier to do so. If you're one of those who want to put up a consulting business and establish a name in this field, here are some of the things you need to do to make it happen.
Determine Your Target Market
Having a market for the ideas you have is important. Someone should be able and willing to pay for your service. Know your potential clients. Will you provide an expertise that’s specifically designed for small businesses? Or, maybe your services will be centered on huge corporations. Before doing anything, make sure to spend time preparing a market plan and a business plan. Once you do, you will not be disappointed with the outcome, particularly when customers start paying you.
Employees and Location
Your consulting business may not need a huge capital investment at the start. Consider having a home office. It offers several benefits like low overhead costs and flexibility. You don’t need to worry about paying utilities or rent for your office. Working at home also offers you great flexibility as you can take time off and set your own working hours. Your home office might also be tax deductible. Check with your income tax or account prepare to see if you’re eligible for this deduction. These days the rules are changing so make sure with your country because some of the countries need more than 1 employee and more than 1 client to come under consulting company.
As your business starts to grow, you might need help in dealing with organizational details and completing the actual consulting tasks. There are lots of options when it comes to deciding if you need help with the paperwork. There are many benefits to having somebody in the office with you, including saving time and money. Having someone focus on the more common tasks allows you to concentrate on other important things like recruiting new clients. You also have somebody to provide another point of view. Having another person around the office who can offer another viewpoint can be valuable.
Billing and Profits
Once you’ve made the decision to put up a consulting business, you have to get serious about the amount of money you’ll charge your customers. If you charge very little, you will not succeed and if you charge a lot, you will not get any client. One way of determining the amount you should charge is to find out the rate of competition. Before setting the fees you’ll charge, ensure you’ve listed all of your expenditures. You don’t want to set your rates, have your clients pay you on time and then realize that you failed to include some of your expenses.
You should also find out the amount that other consultants in your area charge for their service. When setting your rates, you have quite a few options such as project fees, working on a payment basis and hourly rates. Assess each one closely and pick the best choice for you.