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Where to begin when setting up a Consultancy Firm

What are the different types of consultancy services out there and which questions should you ask yourself before you start your own firm?

As a consultancy firm you will be helping businesses to achieve their goals and overcome their challenges through sharing your knowledge and offering expert advice.

Sometimes you will be called in to offer advice on a short-term basis relating to a particular project, or maybe a client will need ongoing high-level strategic advice but haven’t got the volume of work to take someone on in-house.

You will probably fall into one of five categories:

Strategy: You will help your clients to plan ahead and calculate the risks and opportunities for their business. You might be offering marketing strategy to help them reach a new demographic, or advising on policy in the public sector.

Operations: You will be looking at processes, for example helping a cosmetics firm improve the individual elements of their supply chain and logistics to increase their profit margins.

Financial: Businesses will benefit from your expert advice when considering mergers and acquisitions, or when they want to analyse the risk of entering new markets.

Human resources: All companies who employ staff will have questions over employment law and the right way to proceed when hiring and firing. In periods of change – when they are growing quickly or needing to downsize – they will need to call in an expert to guide them through the process.

IT consultant: Maybe you’ll work with a hospital for six months as they introduce a new system for inputting patient records, or you have a global telecoms firm who needs advice on a system to improve their internal communications.

There are several questions you should ask yourself before setting up your consultancy firm.

 

Do you have the skills and industry experience?

If you are going to charge money for giving advice, you need to be confident that you really do have up-to-date skills and wide-ranging experience from across your chosen sector. Clients want to come away from a session with you feeling they’ve benefited from your insights and couldn’t have developed their strategy without you.

You will also need to keep a pace with industry trends. You are responsible for your own professional development and training. This will mean regularly assessing yourself and paying to attend conferences so you can keep up with new developments and best practice.

You can even put yourself forward to speak at these events, which will be a valuable way of spreading the word about your expertise and generating new business.

 

Do you have the personality?

When you are setting up your consultancy firm, clients will have high expectations of you.

They will expect you to be professional. This means when they look at your website they will be able to find clearly presented information, plus pictures of you and your team in which you look business-like yet friendly and approachable. They won’t find you oversharing on social media and you will stay tight-lipped about other clients and their business. And of course, it goes without saying, you’re always on time for meetings!

You will need to be personable. As well as being there to advise, consultants need to listen. Every client’s problems are individual to them, so before offering your guidance you really need to take time to understand their challenges, how they got to this position and the factors that may influence the outcome.

Setting up your own consultancy firm, either with a team around you or as a sole trader, means that you will need to be motivated. This means delivering the work to the highest standards possible, giving yourself a pep talk if your business goes through a rough patch, and always leaving people with the impression that you love what you do.

For your consultancy firm to be a success, you are also going to need to be flexible. You may need to drop everything at short notice to help a client deal with a crisis, you may find yourself working late at night and at weekends, and you may have to think on your feet when a client demands change.

 

Is there a need for your service?

Like all businesses, you are going to need a healthy sales pipeline. A mistake people often make when taking the leap from full-time, permanent employment to a consultancy role is in underestimating the importance of generating a continual flow of work.

Companies who said at one point they will be able to put work your way may later change their minds due to factors outside your control. Maybe changes in the economy affect their decision on whether to outsource, or maybe changes in technology are disrupting the industry (think how human resources has changed since the growth of LinkedIn and online recruitment websites).

Then there’s the importance of getting paid! If you rely on one large firm for your consultancy income there is an element of risk if they are slow to pay their invoices or even go under themselves.

So think about whether there will be a plentiful supply of work for you over an extended period of time and if you will be able to offer something that your rivals don’t. Maybe you can work from home, thus keeping your overheads low and can pass that saving onto your clients through reduced fees. Maybe you’re more flexible and can take on work at short notice and don’t need to restrict yourself to 9-to-5 way of working.

 

How are you going to get new clients?

Networking is a great way of meeting potential new clients. You may not walk away with a big contract after meeting someone for just five minutes, but if you get out there and start making connections and building relationships, then over time you will start generating business.

Tip! Always keep up your networking activity, even if you’re really busy. In fact this is the best time to squeeze it in, because you will be naturally upbeat and will give the (realistic) impression that you are in high demand.

This will also give you a solid lead-in period to new contracts; while you are busy on one project in the spring you have set the wheels in motion for securing more work in the autumn.

Personal recommendations are incredibly valuable too. Why not be upfront about it – if a client is pleased with your work, ask them for a testimonial that you can display on your website or ask them to recommend you.

Tip! Be specific; tell clients who you would like them to recommend you to and for what type of work.

Advertising comes in many forms nowadays. You can pay for traditional print ads, or talk to the editor of your local paper and see if you can write a monthly column on your area of expertise. There are also the magazines that go with trade organisations. People are always looking for content and you might come along at just the right time.

You can also consider Google AdWords, particularly if you can be specific about your service and target audience – perhaps you’re a risk management consultant in Salford, or offer change management to high-growth tech companies. Think about the terms people are likely to be searching for.

 

How are you going to manage the financials?

We’ve touched upon the importance of acting in a professional way, and part of this means keeping on top of your finances. Clients see that you send out quotes quickly and invoice on time, and the tax man will appreciate it if you pay your returns well ahead of deadline.

Cloud-based online accounting software can help you get off to a good start when you set up your consultancy firm.

Customised invoices with your information and branding give a professional impression to your clients, and can be emailed direct in PDF format.

Client records help you keep on top of the contact details and show activity such as invoices sent out and whether they have any outstanding invoices.

Real-time collaboration with your accountant saves you time on face-to-face meetings.

Submit your returns in minutes and hook up with the bank so the payment is made on time (helping you avoid fees from the Revenue).

24/7 support and introductory offers to help you get off to a good start with the online accounts software for your consultancy firm.

There are various steps you should follow when you first set up the company, so take a look at the following websites to make sure you are keeping up with the latest legislation.

1) Citizens Information: Setting up a business in Ireland

2) Local Enterprise Office: Start your own business programme

3) Companies Registration Office: Company registration

4) Revenue: Information about Irish tax and customs such as VAT and PAYE. It also offers essential advice on starting and running a business.

 

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