Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.
The point of your Executive Summary is to get the reader’s attention quickly. Tell them what kind of consulting business you have and where it stands. For example, are you just starting out or do you have a consulting business that you want to grow?
Next, give an overview of each part of your plan that follows. For instance, you could give a short summary of the consulting business industry. Talk about the kind of consulting business you run. Detail your direct competitors. Tell us about your ideal customers. Give a brief overview of your marketing plan. Find the important people on your team. And explain what your financial plan is.
In your company analysis, you will describe the type of consulting business you are running.
For instance, you could run one of the following:
- IT Consulting: This type of consulting business creates custom software, plans for IT system infrastructure, and/or manages computer systems and data processing facilities.
- Management consulting is a type of consulting business that helps businesses, nonprofits, and government agencies with things like corporate strategy, marketing, organizational design, and so on.
- Environmental consulting is a type of business that gives advice on things like pollution, hazardous materials, and other environmental problems.
- HR Consulting: This type of consulting business gives advice on how to set up HR and personnel policies, employee benefits, pay, hiring, and keeping employees.
- Other Business Consulting: People need and will pay for consulting services in almost an endless number of areas.
In the Company Analysis section of your business plan, you need to describe the type of consulting business you run and give background information about the business.
Answers should be given to questions like:
- When did you start your business, and why?
- What important steps have you taken so far? Some examples of milestones are reaching your sales goals or opening a new office.
- Your legal structure. Are you set up as an S-Corporation? An LLC? A single-person business? Explain your legal structure here.
You need to give an overview of the consulting business in your industry analysis.
Even though this may seem pointless, it has more than one use.
First, learning more about the consulting business industry gives you knowledge. It gives you a better idea of the market you are in.
Second, market research can make your strategy better, especially if it shows you what the market trends are.
The third reason to do market research is to show your readers that you know a lot about your field. You do just that by doing the research and putting it in your plan.
In the industry analysis section of your consulting business plan, you should answer the following questions:
- How much money does the consulting business make?
- How big (in dollars) is your consulting business niche (like management consulting)?
- Is the market going down or up?
- Who are your main rivals in the market?
- Who are the main market suppliers?
- What changes are happening in the field?
- How fast is the industry expected to grow in the next 5–10 years?
- How big is the market that matters? That is, how big a market do you think your consulting business could reach? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the population in your area.
In the section of your business plan about consulting called “Customer Analysis,” you must describe the customers you serve and/or expect to serve.
Corporations, the Federal Government, non-profits, consumers, etc. are all examples of customer segments.
As you might guess, the type of consulting business you run will depend a lot on the customer segment(s) you choose. Obviously, nonprofits would want different prices and service options than the federal government, and they would respond to different marketing campaigns.
Try to figure out who your ideal customers are based on how they look and how they think. In terms of demographics, you should talk about the sizes and types of businesses or consumers you want to serve, as well as their ages, genders, locations, and income levels.
Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to get customers and keep them coming back.
In your competitive analysis, you should list your business’s direct and indirect competitors and then focus on the direct ones.
Other consulting businesses are direct competitors.
Indirect competitors are other places where customers can buy things that aren’t direct competitors. This includes, among other things, doing it themselves and having experts on hand. You need to talk about this competition to show that you know not every business or customer hires a consultant.
When it comes to direct competition, you should list the other consulting businesses that you are in direct competition with.
Give an overview of each of these competitors’ businesses and list their strengths and weaknesses. Unless you’ve worked at one of your competitors’ companies, you won’t know everything about them. But you should be able to find out key facts about them, such as:
- What kind of clients do they work with?
- What kinds of services do they give?
- How much do they charge (high, low, etc.)?
- What can they do well?
- What do they do wrong?
The last part of your competitive analysis section is to list the ways you are better than your competitors. As an example:
- Will you provide superior services?
- Will you offer things that your competitors don’t?
- Will you make it simpler or quicker for people to use your services?
- Will you price things better?
Think about how you will do better than your competitors and write them down in this part of your plan.
Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. Your marketing plan for a business plan for consulting should include the following:
Product: In the product section, you should repeat the type of consulting business you described in your Company Analysis. Then, explain in detail what services you will be providing. For example, do you offer IT security consulting in addition to IT infrastructure consulting?
Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In your marketing plan, the product and price sections are basically where you list the services you offer and how much they cost.
Place means where your consulting business is located. Write down where you are and how that might affect your success. For instance, maybe your consulting business is in an office building with a lot of potential customers.
Promotions: The last part of your marketing plan for your consulting business is the section on promotions. Here, you’ll write down how you’ll get people to your location (s). Here are some ways you could promote your business:
- Pay-per-click advertising for keywords
- Putting on seminars or giving keynote speeches
- Putting ads in newspapers and magazines in your area
- Trying to get in touch with local bloggers and websites
- Social media advertising
- Local radio advertising
In the other parts of your business plan, you talked about your goals. In your operations plan, you talk about how you will reach those goals. Your plan for operations should have two separate parts.
Everyday short-term processes include all of the tasks you do to run your consulting business, such as serving customers, looking for new clients, getting supplies, keeping the office clean, etc.
Long-term goals are the goals you want to reach in the future. Some of these dates could be when you expect to serve your 100th customer or make $X in sales. It could also be when you expect to hire your Xth employee or open a new location.
A strong management team is essential to show that your consulting business can succeed as a business. Showcase the backgrounds of your key players, focusing on the skills and experiences that prove they can help a company grow.
You and/or your team members should have worked as consultants before. If so, talk about your experience and skills. But also highlight any experience you think will help your business succeed.
If your team is missing something, you might want to put together an advisory board. A two-to-eight-person advisory board would help your business in the same way that a mentor would. They would help answer questions and give advice on how to plan. If you need to, look for advisory board members who have worked with businesses as consultants or who have run small businesses well.
Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.
A more common name for an income statement is a Profit and Loss statement, or P&L. It shows your income and then takes away your expenses to show if you made a profit.
You need to make assumptions in order to make your income statement. For example, how many clients will you serve each month? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.
Balance Sheets: Balance sheets have a lot of information on them, but your assets and liabilities are the most important things to know. For example, if you spend $100,000 to grow your consulting business, you won’t make money right away. Instead, it is an asset that you can use to make money for years to come. Also, you don’t have to pay back a check from a bank for $100,000 right away. Instead, you will have to pay that back over time.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realize that you can make money but still go bankrupt if you run out of money.
When making your Income Statement and Balance Sheet, make sure to include some of the most important costs of starting or growing a consulting business:
- Location build-out, which includes construction, design fees, etc.
- Cost of keeping up a structure (i.e. data warehouse, database subscriptions, etc.)
- Payroll or salaries given to employees
- Business insurance
- Taxes and licenses:
- Legal expenses