Top 10 Tips for Starting a Small Consulting Business
by Jim Peake
Top 10 Tips for Starting a Small Consulting Business
If you are going to be starting a consulting business we have to assume that you have some experience in a certain area of expertise that people will pay for your experience because it will add value to their business.
Small Business Side of Consulting:
1) Focus in a Niche – too often we all get caught up in the “oh I can do my craft for any business syndrome.” I fell into this category and it did not work. The best advice I ever got was from Glenn Livingston, Ph.D. and he said “we have to be niche focused, this is what Google wants and this is what the clients want.” Why? Because being focused on a niche reduces risk in the clients’ minds. A niche is industry specific, i.e. Fly Fishing in Montana, Addiction Treatment Center Marketing are niches. Small business is not a niche, healthcare is not a niche because they are both too broad. Clients want specific areas of expertise and focus.
2) Brand the Consulting Firm – A brand is all about trust. It is delivering on a promise. It is too easy to just go down to Staples and order some business cards and not get a logo and a branded identity. If you are offering professional services you must look like a professional. You can get logos for cheap $300 – $500 at 99Designs.com or if you want to step it up and “do it right” call SpeechRep Media for a professionally executed custom branded identity with all the bells and whistles for $1,500 – $50,000. But seriously, for a consulting business you are going to be more around the $1,500 range. When I hired my branding company I shared with them that I managed a huge successful chess event. I wanted something with a checkerboard precision and strategic meaning of a chess board, because after all consulting is often strategic. We now use this identity on several different websites and in several different colors.
3) Legal – Just like the branding we have to look “professional” and we will need contracts in place so we can set expectations and deliverables. It makes you look a lot more professional if you provide the client with YOUR contract for professional services. I have done business in the past just on a handshake but it does not always turnout like we planned. Here’s a humorous video called “F you pay me” on the value of legal binding documentation as a service provider. In this case they are talking about web designers but it could be just as easily a “web consultant” or any other consultant for that matter. If you are in the marketing and internet space I can recommend an attorney for you.
4) Telecommunications – You are going to need reliable telephony. Make sure you have a wireless smart phone, a conference calling bridge so you can host conference calls (see FreeConferenceCall.com), optional computer screen sharing service for $20.00 per month, a reliable internet connection, get Google Voice which will ring all of your phone simultaneously, get a Skype Account (If you don’t have one you can appear out of the loop). Obviously you can go nuts in this area with office phones but we are assuming it is one or 2 of you starting a consulting business.
5) Financial – Set up 2 bank accounts, a business account and a payroll account. Make sure you have both a bookkeeper and a CPA. Bookkeepers can save you a ton of fees vs. a CPA. Recommendation is to use Quickbooks Online because both your book keeper and CPA can see your books online, this saves a lot of back and forth as well as file versions and FTP’ing large Quickbook files which never seems to be a smooth process. Get a payroll processing company to do your payroll. I use Citibank and their payroll processing is $25 per month flat fee to process as many payroll checks for one employee per month. ADP and Paychex are two other payroll processing companies that work with small businesses. Expense recording, I use – Shoeboxed.com by mailing all my receipts to them and they image them then post them online and my bookkeeper can then import them into Quickbooks, this service is very reasonable. Getting Paid – this is of course a very big deal so we need to make it as easy as possible. So start with the Intuit Payment Network which is the next best thing to a wire transfer but only costs $0.50 per transaction. Wire Transfers – Make sure you know your ABA # and your bank account #. I printed them on a label maker and put them up on my computer screen border because I refer to them so often. Take credit cards, a lot of clients like to pay using credit cards. You can either get a merchant account and/or definitely get a Paypal Account. Paypal is not only a great way to receive money it is also a great way to pay vendors. Keep in mind that credit cards are expensive this is why the Intuit Payment Network is such a great deal. I would also encourage you to get a Paypal Business Debit Card so you can spend the funds without waiting the 2 days it takes to transfer them to your bank account. You can also import the transactions into Quickbooks online.
6) Product – In the consulting business the “product” is you. Some folks will tell you, that you need to be certified. I think that this “depends” on the field you are in. If you are the “product” then you need to start writing. Write white papers and write reports. Write articles for your blog. Write for other people’s blogs. Write for magazines. You have no idea how much this will make a difference in your business. It creates authority and it creates visibility. You probably already have a bunch of older papers or proposals or documents that you can re-edit and make your own and re-publish in some sort of a generic way in your niche.
7) Marketing – This will not come easy for many, but you have to keep the phone ringing with new inquiries all the time. The first two most important things you can do is 1) build a list of potential prospects, 2) get press or PR both of these two things offer the most leverage for any small business. Next get a website professionally developed, as a matter of fact if you have more than one niche I could get a handful of websites. SpeechRep Media can produce a SEO ready and serious lead generating website that you can update yourself for as little as $1,500 and $250 per month to maintain. You only need a few good calls every month to keep the business rolling along to profitability. An example of a niche consulting site is Addiction-Rep.com where all I do is put my services on the site and nothing more. The reason is, too much information actually will confuse the prospects. I only get about 250 visitors per month to the site, but the phone does ring from those 250 visitors and I do get business from them. Once you have your “professional website(s)” deployed and you are continually adding great content to it you can now drive traffic to it.
8) Driving Traffic to Your Website – Hopefully you already have a couple of clients but if you don’t there are some ways to deliver traffic to your business/site immediately. I would use Google Adwords to make your phone ring immediately, you can do it yourself or you can hire a professional. I would and do hire professionals like PPC for Small Businesses. The long and short term play is SEO or Search Engine Optimization. The problem I see for many businesses is that 90% of all websites are developed not to be found by the search engines but to please the owners’ egos. Doing this the right way the first time can be absolutely critical. You have to get the tracking mechanisms in place so you can see how users use your website as well as track the incoming calls and how many you are actually getting from each website. Social media sites like Facebook, Twitter, Youtube and LinkedIn are also great ways to drive more traffic to your website(s). Of course you can also buy banner advertisements on other people’s websites but that can be expensive and unless it is an exact match as far as niches go it might be a stretch. What I do know works is writing on other people’s blogs and websites and getting them to link your author profile back to your website. Many subject matter experts do this for the Huffington Post as an example. Another great way to go is using direct mail postcards and driving the prospects back to the phone and your website. We take this one step further with Postcards-Rep.com when we give the prospect a personalized landing page that we can track their visits on and then we can have them opt into our e-mail list, Facebook Fan Page follow us on Twitter etc. PR or public relations is the absolute best bang for your buck because you can do it yourself. There are 3 PR Podcast training calls here that will help you navigate a newsroom like a PR professional. E-mail is another great way to drive traffic back to your site. You can use Aweber, MailChimp or Infusionsoft which is what I am using.
9) CRM and Automation – This is the place where you can get a lot of leverage. Chet Holmes said in his book The Ultimate Sales Machine that he spends a portion of his time working on systems and automation in making his small business more productive. The allotment can be different for each of us but if it is an accounting system, marketing system or CRM system it is important to keep improving our efficiency using systems. One small business CRM and Marketing automation system that fulfills this is Infusionsoft.
10) Hire Professionals – I think Red Adair said it best, “if you think it is expensive hiring a professional wait until you hire an amateur.” In my experience I would much rather take less profit and hire someone who knows what they are doing so they will hire me back multiple times in the future.
I’d love to hear your ideas that would help make a consulting business better and more productive for you and your clients.
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