Top 5 Things to Consider Before You Start Your Consulting Business

So you want to start your own consulting business, but do you even know where to start? What should you know before you run your own business?

These 5 questions below are critical to know and be able to answer before getting your consulting firm up and off the ground. Here are 5 questions that will allow you to dig deeper.

1. What is my area of expertise?

When the question is posed most persons will answer well I know this or I know that, however when pressed to define their area of expertise they cannot in one sentence tell you what they are about. Can you define what your area of expertise is in one sentence?

2. Do I have certifications or memberships to back up my area of expertise?

Certifications and memberships to organizations aligned to your area of expertise help to legitimize your knowledge and experience. It serves as verification that you are who you say you are, giving your future clients confidence, you can get the job done.

3. Do I have a business plan?

I mentor many of my clients who want to start a business and I always ask the simple question: where is your business plan? Yes, without a business plan, you are planning to fail. Very simply put you are spinning your wheels. You must have short-term and long-term goals in mind and documented in a business plan with the steps to show how you will get from one goal to the next goal.

4. What are my finances currently?

Consider where you are financially. The very nature of the business is feast or famine, before you start down the road, ask yourself, do I have enough money to cover 6 months to 1 year of living expenses coming out of the gate? If the answer is “no”, then you are treading on dangerous grounds. You and your family could be in jeopardy financially.

5. Do I have sound legal advice and financial advice?

It is important to speak to a legal advisor; do you want to start a LLC or S corporation or C corporation? What are the requirements in my state of residence? How do I protect my family and assets? The same applies to financial advice, speaking to a financial advisor or your accountant is critical. Good and sound financial advice can save you from over paying or underpaying taxes or protecting your family and assets. Many entrepreneurs only think of legal advice and financial advice after the fact. Deep into the journey where it becomes much more costly.

If you own your own consulting business, weigh in on the topic. What should one consider before starting a consulting business?