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"Consultancy Business": How to Get Started

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Have an experience of working in a multinational company? Or started a few successful businesses before? Your knowledge will be valuable for others, and it might be just the right time to start your consulting business. For those without any experience, maybe you got something valuable to others. Anyone is definitely good at something, and anyone can be a consultant nowadays, provided you can tackle the two main challenges you'll find along the way: marketing, and pricing.

- Marketing Your Consulting Business

One can argue that your expertise or knowledge doesn't matter as much as how you market yourself in the consulting business, and for some part, it is true indeed. If you are a reputable person in your old company, you can offer your consulting service to former colleagues and business partners, if not, you have to be creative.

Starting a blog discussing your particular forte can help build your reputation, as well as many innovative strategies available in this digital day and age. Cold-calling by sending business proposals can surprisingly work very well, provided you wrote it professionally and you targeted the right people.

- Pricing Strategy

Charge too expensive and you don't get any business, charge too cheap and they will perceive you as cheap. Pricing your service can sometimes be a very frustrating task. Not to mention, you'll need to track your operational expenses to ensure profits. How to manage it?

Start by the very basic rule. Your revenue is your profit+overhead+labor costs. Now ask yourself? What is your target revenue in a year? Make sure to make it a comfortable number, after all, you should be the first one that knows your value. Say your number is $100,000, divide it by 265 days,the rough number of your work days, not including Sundays, holidays, and Saturdays. You got $377,36 as the result, and that is your labor cost.

Now calculate all your expenses, say it's $1,000 per month this is your overhead.

Take a profit margin from the overhead, the average profit margin of the consultancy business is around 20%, so you got 20% times $1,000 equals $200.

Go back to the very first rule and you got your target revenue: $377,36+$1,000+$200=$1,577,36, and that is your daily target revenue, for a ten hour day that'll mean $157,73 hourly, and that is what you should charge your clients.

- Startup Cost

You can start your consultancy business from home, and you can start with no monetary investment. That is, provided you already got a reliable computer, phone, and internet connection. However, if you are planning to lease an office, the rent cost should be included as a startup investment, and it will vary depending on your location.

Earning Potential

As previously mentioned, your earning potential will depend on your personal target, and how good you market yourself. It will also vary depending on the industry in which you consult. However, the U.S. national average earning for management consultant is $81,320 per year or $39.10. Top consultants can make millions in a year, making it a multi-billion Dollars industry in the U.S. alone. Businesses in America spend more than $20 billion annually for consultants.

Think you got a knowledge valuable to others? Maybe the consultant business is for you!