Owning a consulting business means sharing your business expertise with people who need assistance in starting and operating a small business.
Many aspects that you’ll find yourself consulting with your client range from choosing an appropriate business structure, dealing with the legalities, developing a marketing program, business plan, etc. Actually, it will be your job to help your clients solve any problem they might be facing in their small business. Here are four things you need for starting a profitable consulting business.
Ideally, you need to have a business degree coupled with a solid track record as a successful small business owner.
You will need some basic equipment that includes computer and office software and mail. Additionally, you need a good quality printer, my preference is for a color laser which is more affordable these days. Either a physical fax machine or fax software is also a good idea, and a cell phone is a must. The easier you make it for your clients to contact you the better.
You should also add business cards, letterhead, envelopes, and other basic office supplies to your shopping list. Depending on the equipment and software you select, you can expect to spend between $4,000 to $5,000 setting up your home office.
It is advisable to set up your office in an area of your home that can be shut off from the rest of the house. You will also need to invest in some office furniture, at the very least a desk, filing cabinet and an office chair. Setting up your office furniture will cost between $500 to $1,000. Apart from your equipment costs, you should invest in insurance.
At the very least, you will need professional indemnity insurance. Public Liability Insurance if clients are going to visit your office, Business Continuity Insurance, Income Insurance, Equipment Insurance, etc. Depending on your business needs, your insurance costs can range anywhere between $500 to $2,000 per year.
Fee to charge
Typical fees for a business consultant are between $40 to $50 per hour. Bear in mind though, that as a business owner it is unlikely that you will be able to charge for every hour that you work in your business. You will need to set aside some time for actually running the business, which will include basic administration tasks, and marketing your services to potential customers.
Initially, you should expect to charge out less than half of your working hours. Typical earnings for this type of business range between $30,000 to $45,000 per year.