“Tell me a little bit about your business and the market you plan to target?” If this is how you plan to start an online consulting business and grow it fast, then think again! You are yet not ready to take the leap, as your approach is nothing but professional.
Perhaps you are inspired by some impressive statistics and wondering how do I start an online consulting business and make six figures from the first month!
Remember, to start an online consulting business you need to possess something more than specialized knowledge and advising ability. Actually you need to master many things. But most importantly, you have to tune yourself to THINK like an entrepreneur and not just a mere provider of business consultant services
What Are The Key Facts You Should Know About Consulting Business Growth Worldwide?
Over past few years, demand for business consulting services have grown by leaps and bounds. The consulting industry generated massive job opportunities in the United States of which accounting service remains the most popular one. However when it comes to high revenue generation, three types of business consultants minted more money in the United States, i.e., Management, Technical and Scientific.
Adroit Market Research predicts that by 2025, the management consulting services worldwide, will hit a whopping figure of USD 343.52 Billion. At the same time, competition will be quite high, as many new players will jump on the bandwagon to make the most of this thriving business consulting market.
Before delving deeper into your topic, i.e. how do I start an online consulting business, let’s take a look at few more interesting facts about online business consulting services.
The Good, Bad and Ugly Faces of Online Consulting Business
Let’s start with the good points. It’s actually easy and economical to start an online consulting business. You can start it right from your home. If you are employed, you can chose weekends or define own schedule to offer online business consulting services. Yes, it’s that convenient!
The bad part is that initially your job involves more of marketing and less of consulting. Before you ask yourself, how do I start an online consulting business, you should also ask yourself this question. Do I have sharp marketing skill to continually acquire leads and turn them into clients?
The ugly part, as already mentioned is cutthroat competition. The fact that anyone can start an online consulting business, has resulted in not-so-efficient ones entering the field. To acquire new clients, they are often selling their time at a cheaper rate. They accept time-based transaction model and often end up executing the project inefficiently. This is creating a challenging scenario for efficient business consultants who find it difficult to convince SME clients to accept value-based pricing model.
What Are The Resources You Need to Start an Online Consulting Business?
As already mentioned you can start an online consulting business with whatever resources you have at home. Basically you need a small office space which can be your home or a shared cubicle. You really don’t need a fancy office with lots of decoration but what you need is a quiet place to think and plan.
Also, you need a telephone line with voicemail, a proper mailing address, and most importantly a computer or laptop with strong internet connection.
The next question is whether you need to incorporate your online consulting business. The answer is it is not very important initially, but you must consider it at a later stage, especially as your income starts growing.
Now coming to the accounting part of your online business consulting services, it is suggested that you hire an accountant for the purpose. Initially you might be tempted to do it on your own to save the cost but it can be a serious mistake. If you have little idea about invoicing and taxes then you may end up committing serious mistakes which will prove to be costly in the long run.
And last but not the least, you should be in touch with a lawyer or a legal expert to efficiently run your online consulting business. Because as a consulting business owner, you may need to consult the lawyer on behalf of your client, from time to time.
Now let’s start with the step by step procedure to set up an online consulting business.
Know Your Strengths and Skills
It is easy to start an online consultancy business, but staying in the game is as challenging as any other business. Keep in mind that the prime aim of business consultants is to offer value to their customers.
Determine your strengths and weaknesses. You should take a close look at your skill sets, and your previous experience. As you ask yourself how do I start an online consulting business you should also ask yourself what you enjoy doing and what is your passion.
This way you can easily determine your niche and define exactly which types of clients you want to serve.
Remember, to rope in high-profile clients, you must have a deep understanding of your strength and limitation. To deliver the best to your customers, be the best in a specific field. Don’t try to make everyone happy!
Figure Out What the Market Demands
After identifying your niche, strengths, and skill set, think about the pain points that businesses face in your field of work. To efficiently offer business consulting services online, it is not enough to have tons of knowledge, expertise, and skills. These are of no use if you attempt to offer a consulting service whose market demand is practically “zero!”.
Doing online research is an easy way to figure out what the market demands. Begin your research by going through blogs in your niche. Take a look at what industry leaders are sharing. Follow them on social media to know what types of problems and solutions they are talking about, what are the trending topics they are discussing, and so on.
To start an online consultancy business, you can also tap your offline network to spot issues that need solutions. Take for instance, you offer reputation management services to a logistics company and the client is very happy with your services. Now you feel you have developed enough expertise and confidence to offer specialized consulting services in this particular field. To validate demand for this particular consulting business, you should interact with more people belonging to this specific industry.
Chances are, you will get a clear idea whether or not demand for reputation management consulting indeed exists in the Logistic Industry or your client is just an exception. Accordingly you can strategize what value you can add with your reputation management consulting service.
You Need to Invest in the Right Tools to Start an online consulting business
In this digital age, all types of business consultants, particularly online business consulting services use various tools and resources to provide better and faster solutions. HR consultants, for example, deploy MightyRecruiter, which automatically screens candidates and brings them on a single platform from various job sites.
Another common tool to start an online consulting business is video conferencing software. TrueConf is a very popular video conferencing software which lets you host a webinar for free.
Then there are few more communication tools like Slack and Yondo that have become very popular among online consulting firms.
Prepare a Stellar Elevator Pitch to Attract New Clients
Having the most advanced tools, a rock-solid plan, and exceptional skill set won’t serve any purpose if you cannot close a deal. To make potential clients choose your consulting service, design a convincing elevator pitch to highlight the best features of your online business.
An elevator pitch is basically your company’s value proposition, which concisely highlights how your business stands out from the crowd. It is a persuasive sales pitch, which gives your target audience an idea of the solutions you offer.
Experts recommend keeping the elevator pitch short, preferably 3-4 sentences. If a potential customer finds the pitch interesting, you can then provide further information about your business consulting services.
Write Clear Consulting Proposals to Convince Prospective Clients
Your consulting proposal is a way to show your client how you are going to solve the problem. But before sending a consulting proposal, t it is important to have a face to face meeting or video conferencing with the client. And yes this meeting is very crucial as a lot depends on how you present yourself to the client, what kind of questions you ask and what kind of information you manage to gather (the client might not be keen to reveal key info to a stranger!).
As I mentioned in the beginning a question like, “tell me a bit about your business “, is bound to create not-so-good impression. Why? Because when you are meeting a prospective client it is assumed that you have done enough research work about the client’s marketplace and the challenges. Take some time to prepare yourself for the meeting with the right set of questions.
Based on information and data collected from the meeting you can prepare the consulting proposal and send it to the client for approval. Every business consultant has his or her own way of writing client proposals, but the basic structure is the same.
Ideally the client proposal should describe the work you propose to complete and how, your charges and the billing method. The client may ask you to provide an approximate time frame within which you propose to complete the project. And also it’s important to clearly mention what you DON’T propose to do as a part of your business consulting Services
Set Up a Competitive Pricing Structure
Many internet entrepreneurs find it difficult to price their services accurately, especially when they start an online consultancy business. Fortunately, there is an easy formula they can adopt. For example, if you are in the HR field, take the average salary of an HR manager and convert it into an hourly rate.
Since you are an independent service provider, not entitled to the perks of a salaried HR executive, you can always charge double the hourly rate. This works well for organizations, as they can lower their overhead by getting rid of the fixed liabilities of employing a full-time HR manager.
In general, hourly rate is the common pricing structure followed by most online business consulting firms. However, the efficient and experienced business consultants prefer to follow some other fees structures like daily rate, project-based cost, monthly retainer plan, value and ROI based charges.
You can stick to the formula that best compliments your experience and expertise. Also, to make your proposal more lucrative, you can share with your clients a cost-benefit analysis, to show them the money they are saving.
Stay Focused and Deliver Results As Promised
Once you start an online consultancy business, It is very important to stay organized and focused to ensure everything is on-track from the day one itself..
Look out for openings where you can automate your business processes. From budgeting to managing expenses, accounting to workflow management, there are free and paid apps for small businesses that you can put to use. If it is your first online consulting project then you might need some extra help.
Feel free to hire a freelancer or a part time employee for the purpose. Because there is no point trying to complete everything on your own and then ending up missing the deadline!
Build up a Strong Marketing System
By now I am sure you have your answer, i.e, how do I start an online consulting business? However, it’s not yet the time to celebrate success of your online consulting services, if you have landed your first project.
Rather the most critical part of your consulting business starts from here i.e., marketing your business and making it visible to the right audience. You might be a great consultant, knowledgeable, skillful and dedicated but if people don’t know about your online consulting services, your business is not going to grow.
Now you need to find out what’s the best way to market your online business consulting services. The good part is that online businesses now have a multitude of options to promote their services. Your marketing plan should ideally include, social media marketing, blogging, networking, Email marketing, public speaking, paid ads online, direct outreach, referral programs and so on.
A little suggestion I would like to share with you. If you are trying to run an online consulting business on your own then better not focus on so many marketing strategies at the same time.
Initially you may have to go through a trial and error process and find out which marketing trick is working best for your consulting business. Let’s say you find out blogging, LinkedIn and referral programs are delivering the best results. Accordingly you can focus on strengthening those channels.
Industry-Wise Fee Structure for Business Consulting Services
Since online consultants typically start with an hourly fees structure, here we have provided the per-hour consultancy fees for 7 leading industries . Also to mention, these rates just provide a gross idea of the market standard right now. You can always negotiate own deal, based on the nature of the project and the work involved.
Customer and Administrative support
A Virtual Assistant can charge $11, whereas an administrative support consultant can ask for $12. For customer support service, the per hour rate is $12.
Marketing and Sales
For Social Media Marketing, you can charge $16 and for customer relationship management around $18. If you are a sales consultant, you can ask for $18 whereas search engine optimization rate is $19.
Finance and Management
Accounts consultants usually charge $18 for their services, whereas HR consultants charge $18. If you are a project consultant, you can ask for $20, business consultants can charge $21. Financial consulting online rate is around $21.
Manufacturing and Engineering
The online consulting service charge for telecommunications is $21, product design is $22 and hardware support is $23.
IT and Programming
If you are an IT support consultant, you can ask for $21. Quality assurance consultancy rate is $18. A database programmer can charge $21, whereas as a web programmer can charge $21. Mobile programmer’s consulting fees is around $22, a developer’s rate is $23 and a game programmer’s consulting charge is $24.
Multimedia and Design
If you offer online business consulting services as a graphic designer, your approx. per hour rate can be $17, whereas an illustrator can charge $19. A web designing consultant can ask for $21 and a multimedia consultant can charge $23.
If you want to start an online consulting business as a fraud analyzer, you can start with $27 per hour. As a contract consultant, you can charge $28, whereas paralegal consulting rate is around $28. General legal consulting fees is approx. $29. You can offer online services as a tax consultant and charge $30 per hour.
It is easy to start an online consultancy business, but to run it efficiently is a challenge. Therefore, prior to setting up a business consulting service firm, devote quality time to plan everything thoroughly. Also, review your business consulting services list regularly, to make necessary adjustments as and when required.
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