You’ll need a strategy if you wish to work as a consultant. However, the majority of business plan templates were created for merchants, manufacturers, and other businesses, not consultants. Here’s how to make one that’s uniquely yours.
Consultants operate in a unique way.
Working as a self-employed consultant differs from working in other types of businesses. You’re not creating or selling tangible goods like stores or manufacturers. You’re also not employing a team of individuals to supply solutions, unlike service organizations.
Keep in mind that you’re not just selling your time. You will be compensated for the skills, information, and abilities you have acquired throughout your career as a consultant.
We have some background reading on the advantages of working as a consultant or contractor that will assist clarify how such organizations operate. But, once you’ve decided to work as a consultant, what’s next?
You’ll need a plan, just like any other new small business. Funding, growth, pay rates, expenses, marketing, equipment prices, training, and certifications will all be part of the plan. It must also include your objectives and the approach you’ll utilize to achieve them.
Consulting business plans are distinct from other types of company plans. Here’s all you need to know to start your consulting career.
For whom are you drafting the strategy?
Before you begin, you should ask yourself this question. “For the bank and investors,” most traditional businesses will respond. Because small firms typically require starting money to get off the ground, this is the case.
Consultants who start their own business, on the other hand, may not require much – if any – investment. However, a business plan is still necessary – not just to clarify specifics in your mind, but also to assist you grasp the potential risks and rewards.
A solid company plan will include both financial and strategic elements, although the content will differ based on the target audience. Next, we’ll look at your possibilities.
A bank and investor-friendly business strategy
It’s possible that you won’t require financing for capital equipment or office rent. However, you may want a loan to get you through the first few months until you establish a consistent cash flow. Any new business’s initial period can be difficult, and money problems can only make things worse.
You might also decide that hiring office space, perhaps in a shared office atmosphere, will help you make a better first impression. Alternatively, you may require finances for marketing and advertising, especially if you are providing consulting services in a competitive sector.
You’ll need money for all of this. Apply for a bank loan, look for grants, or attempt other capital-raising methods like crowd funding. Any potential investors will want to see the crucial numbers, regardless of the approach you use. As a result, you’ll need to include the following in your business plan:
- Analyze the target market and industry
- Business goals and unique selling proposition (unique selling proposition)
- Expenses and assets associated with the start-up phase, including equipment
- Fixed costs and overheads
- Budget and marketing strategy
- The amount of money needed, the loan collateral, and the interest rate
- Pay rates, revenue forecasts, and cash flow forecasts
- Forecasts for sales at monthly intervals
- Ongoing costs
- Projection of growth and strategy
It will be tough for you to estimate some of this data. It may be even more difficult for you to communicate clearly. To assist with figures and to create professional tables and charts, use your accounting programme. An accountant can then assist you in including the correct information in your plan.
A business strategy made for you
Of course, you may not require any funds. Perhaps you have enough savings to last a few months and a steady stream of clients lined up. You might be starting your consulting profession as a result of an inheritance or a windfall.
You may afford to be less formal when developing your plan if money isn’t an immediate worry. That involves making sound predictions and defining realistic goals for yourself, not simply financial ones, though those should be included as well.
This isn’t a creative writing exercise. The goal of making a plan is to help you focus on what you want to accomplish. Some things to think about are:
What are your motives behind being a consultant?
What is your motivation for doing this? It’s critical to respond truthfully. Write down the response if it is “to make more money” or “because I’m good at what I do.” Make a list of all the reasons you can think of, then go over them again. Do they seem credible? Make sure you understand your genuine motivation, as this will assist you in achieving your objectives.
Make sure to keep some savings
Working as a consultant can result in sporadic income. You might be busy at times, and less so at others. Savings accounts are a good idea, especially if you’ll be paying taxes at the end of the year rather than while you’re working.
Consultancy may bring risks in your relationships
Consider how consulting might affect your family or friends. Consultants frequently work odd hours, sometimes from home, and they may be required to work on weekends. Relationships may be strained as a result of this. Set boundaries around when and where you will work and be practical about it.
Beware of the types of clients you want to work for
Because you know the sector, you’ll already have an understanding of the types of clients you don’t want to work for. For example, notorious late payers can wreak havoc on your cash flow, so it’s best to stay away from them as much as possible. Look for clientele who are trustworthy, since they will contribute to the development of your company. Know that you have the authority to ‘fire’ clients who are causing you more difficulty than they’re worth.
Certification and training
It’s critical to maintain your abilities up to date in many areas, particularly IT. Your clients are unlikely to pay for you to attend training classes, so you’ll have to cover that cost yourself. How will you stay current? Consider industry periodicals, websites, forums, news feeds, conferences, courses, distance learning, peer groups, and ways for self-teaching.
Make a list of objectives and keep in mind when making decisions
Perhaps you intend to work as a consultant for the remainder of your career. Perhaps you’d like to do it for a few years and then return to work as an employee. Alternatively, you might wish to hire other consultants at some point and build up an agency, which you could eventually sell. It makes no difference what your personal objectives are as long as you have them. Make a list of them and keep them in mind when making major decisions.
What are your plans for your profits?
This is an excellent time to consider how much money you want to make. Think on how much you’ll charge and how you’ll spend your commission. For example, you might decide to utilize 50 percent to cover bills, 30 percent to pay yourself, and 20 percent to reinvest in your firm.
Some of this material would be unacceptable to include in a bank or investor’s financial business plan. However, it can be really useful in assisting you in the early stages of your consulting profession.
Five helpful guidelines to come up with a strong consulting business plan
Writing a business strategy can be a difficult task. It may be difficult to think clearly and logically about your business strategy if you’ve never done it before. Here are some pointers to get you started:
- Don’t hesitate while making first draft
Don’t be concerned with the language, structure, or neatness of your writing. Simply get your thoughts out of your head and onto paper or a computer screen. In a casual situation, such as a library or café, some people find it easier to do this.
- Do your homework regarding the industry you’ll be working for.
Learn about the industry you’ll be working in. Learn as much as you can about the intricacies so you can build a more effective consulting business plan.
- Determine your unique selling proposition.
That is your one-of-a-kind selling point. Why should businesses choose you over one of your competitors? Consider what you’re particularly strong at, and use that as a foundation for self-promotion.
- Obtain feedback
Speak with your coworkers, friends, former business associates, and potential clients. Show them your plan and pay attention to what they have to say.
- Maintain a straightforward approach.
Don’t waste time writing dozens of pages. You’ll boring the investors, and your strategy will wind up in a pile where no one – including you – will ever look at it again. Keep it simple and to the point.
Regularly update your company plan.
A business strategy is not a one-dimensional document. As your business expands, it should change and evolve. In your first few months as a consultant, you’ll pick up a lot of expertise, which you should apply to your company plan. Reviewing your plan once a month is a smart idea.
You may discover that some of what you originally stated was incorrect, inaccurate, or simply incorrect. That’s quite typical. Nobody can foresee every move a company will make. The main thing is to learn as you go along and apply what you’ve learned to better your strategy.
Make a strategy for consulting success.
A consulting business plan is designed with you, the consultant, in mind as much as it is for anyone else. The purpose of writing it is to focus on what matters. It is this clarity that will enable you to succeed.
So don’t think of a business strategy as merely another thing to check off your to-do list. It’s an important step in launching any business, but especially a consulting firm, where you’ll need initiative and determination to thrive.