Updated: Feb 20
Maybe you’ve been dreaming of being a consultant. Or maybe your life circumstances have changed, and you need to make a quick decision to start consulting. Being a consultant can be a wonderful way to earn a living and have the life you want. There are many steps involved in becoming a consultant. Doing those thoughtfully can mean the difference between quickly becoming a wildly successful, in-demand consultant or struggling to make it work. This overview will give you the basic path for becoming a consultant and the process for doing it well. Following these steps will make your life easier when you make the transition and increase the likelihood of success.
Here’s the good news. You don’t have to do everything I advise in this overview, and you don't have to do everything perfectly to be successful. But the more you do well, the more you can avoid mistakes others have made and, instead, go down a path that has worked for other consultants.
In the best of all worlds, you can work through these steps before you leave your current job. But if you’ve already left, I urge you to take the time to do this work before you launch full speed into promoting your services. You will be more likely to get clients faster, build up a reliable pipeline of work, and skip the awkward hit-or-miss first steps that would-be consultants often make.
The goal is for you to be ready and able to spend more of your time executing on a well-thought-out plan once you take the leap into consulting. That will enable you to get clients faster than if you wait to create a plan after your regular income stops or act without having a plan at all.
So let’s begin.
Step 1: Know Why You Want to be a Consultant
A great first step is to understand why you’re doing this and how it fits your goals and preferences for work and the rest of your life. Knowing your “why” will help you clarify the best way to go about becoming a consultant and operating as one. It also will give you something to keep you motivated when difficulties arise. Here are questions to consider:
Why do you want to be a consultant?
What expertise, skills, and knowledge do you have that you want to use to help others?
What do you hope becoming a consultant will do for you and your life?
Why do you want to serve people, companies, or organizations as a consultant rather than an employee?
What do you want your life to be like? What do you want your days to be like?
Who are you and how could you do this?
What expertise, skills, and knowledge do you have that could help others achieve their goals?
Are you a self-starter who takes the lead from start to finish?
Do you need to be part of a team where other people lead but you help make things happen?
Do you need external structure or can you build your own?
Do you need a lot of financial security or are you willing and able to take more risks because you think the payoff is worth it?
Are you good at networking or would you be willing to learn to be?
Are you comfortable having transactional conversations to get business or are you willing to learn to do that?
You’ll probably ask yourself a slew of other questions, but it’s important to assess who you are, why you want to be a consultant, and how you think you could do this. The answers to these questions will help you decide if being a consultant is right for you and, if so, the best way to go about it—for you. If you’re already sure you want to be a consultant, the answers will guide how you do it and inform a lot of other choices you’ll make along the way.
For example, if you need structure coming from somewhere else or you need a steady paycheck, a consulting firm is likely your best bet. Or you might need to do a lot more preparation to make being an independent consultant more structured and secure. If you’re a self-starter who wants more control over your days, then being an independent consultant might be best for you.
Step 2: Choose a Market
Once you know more about why you want to be a consultant, who you are, and what’s important to you, you need to decide who you will serve. You need to pick your market. That could look a lot of different ways. It may be a particular industry or a sector within that industry. It could be companies and organizations that need a particular set of services and it really doesn’t matter what industry it is.
At the beginning, I always encourage new consultants to “niche down.” You don’t want to try to be all things to everyone. You want to be the right thing for the right clients. For example, if you’re picking an industry as a market, you don’t have to serve the entire market. And, in fact, that can make it harder to sell your services because it’s more difficult to have a focused approach to business development and to deliver a clear and compelling message to prospective clients when you’re saying you can do anything for that industry.
So focus as much as you can as you start. That doesn’t mean you’re going to end there. I’ll give you an example for myself. I’m in the healthcare industry in the United States. That sounds pretty specific. It’s the healthcare industry. It’s in a particular geography. But the U.S. is really big, and the healthcare industry is very broad and has many different sectors and types of work within it. So when I started, it was easier to do business development once I figured out that I needed to describe what I could do for a particular niche within that industry. In my case, that was a particular type of provider within the industry. It was much easier to describe what I could for folks in a way they could understand and care about. That got me started. It enabled me to get my initial clients and build a name for myself, but it didn’t lock me in. Now I work for many different sectors and businesses related to health and healthcare. But I had to start somewhere.
Step 3: Articulate Your Value Proposition
Once you know who you’re going to serve as a consultant—your market—you need to figure out what you can do for them. When I first started, I didn't know how to describe myself. The difficulty was that I was trying to say that I could do too much. I am a generalist, so the value I could offer was broad. But that didn’t help me because it wasn’t focused enough for prospective clients to get it and, more importantly, want to pay for it. You can avoid this trap by asking yourself what specific value you will bring to clients.
Here’s the key: This is not about you and what you know. It’s about what results you can help clients achieve. The more specific you can be in your value statements and the more you can quantify value, the more compelling it’s going to be once you step into your market.
It’s not just that you can help organizations succeed, but you can help these specific types of organizations increase their annual revenue by 10%.
It’s not just that you can help companies grow, but you can help companies develop and implement successful merger strategies—when 75% of mergers typically fail.
Once you have a set of specific value statements, you want to be able to demonstrate that you can actually do those things by describing your expertise and accomplishments in a clear and concise way.
Next, look at your initial market and your value proposition together. You may adjust your market and/or your value proposition based on looking at them holistically. You want to make sure they match. If not, make changes. I also suggest doing research to make sure there is a demand for your particular value in the market you picked. There are a lot of ways to do that.
Ask people who have experience in your target market what they think of your value proposition. Do they think there’s a significant demand for what you can do?
Do online research to validate your market niche and value proposition. Who’s out there doing similar work in your market? What do they offer and how do they describe it?
Again, adjust your market and/or your value proposition based on what you find.
If you need a deeper, step-by-step way to develop a crisp and compelling description of what you can offer in your market, you can use my workbook Know Your Zones: The Consultant’s Guide to Describing What You Can Do. It will help you nail down what you say about your value when you’re in front of prospective clients.
Step 4: Develop a Clear and Compelling Consulting Brand
You’ve clarified why and confirmed that you want to be a consultant. You’ve identified your market and articulated your value proposition. The next step is to develop your brand. This doesn't have to be a lengthy process, but I would suggest that it's a very thoughtful and deliberate process.
So what do I mean when I say develop your brand? Your brand is what you want people to think and feel about you and your consulting business and what you want them to experience when they interact with you. These answers should guide your decisions about how you enter and operate in a market. For example, part of my brand is that I am generous with my value and empathetic to my clients’ particular circumstances. That’s different from consultants who just offer proprietary, one-size-fits-all solutions. Plenty of consultants do that, but that’s not how I want to operate or be known in the market. Clients come to me—and stay with me—in part because they feel and experience my generosity and empathy. By staying true to my brand, I build the market reputation I want.
Notice that I didn’t say a brand is a logo, website, business cards, and such. Those are visual elements of your brand, but they are not the brand. You need some or all of them depending on your market, but I wouldn't jump into developing them before you know what you want people to think, feel, and experience when engaging with you. I also wouldn’t spend a lot of time laboring over getting your images, colors, and all the pretty stuff perfect before you launch your business because those aren’t the things that will drive most of your business.
You also want to be clear about your brand because it will inform how you're going to price and market yourself. I suggest doing this before you go out into the market because, once you’re out there, people are going to start developing and sharing opinions about you, which creates your reputation in the market. Your reputation will drive a lot of your business, so you want to make sure it matches what you said you want your brand to be and the actions you take to cultivate your brand.
If you want more information on how to build your brand as a consultant, check out Episode 13 of the Craft of Consulting podcast where I interview branding expert, Shaunice Hawkins.
Step 5: Decide on Your Pricing Model
Deciding what and how to charge clients is a challenge. You want to make sure that what you charge and how you market yourself match deliberate decisions you’ve made about your brand as well as what your market will bear. Once you start to say what and how you charge for your value, it’s really hard to change your pricing strategy later.
A word of caution before we talk about how to develop your pricing model. Many new consultants start out thinking they should be the low-cost option. So they price themselves low and try to get as much business as possible by being the cheapest option. There are several problems with that. One is that price denotes value. If you price yourself too low, you're going to tell your market that your services aren't going to be as valuable. Under pricing yourself may get you clients in the short term, but it will be a challenge to build a robust business and sustainable life by “bargain basement” being part of your reputation. If you are going to deliver high value, then you want to be a premium brand with a price that signals that.
Pricing models, however, aren’t just about what you charge. You also need to decide how you will charge. I'm in an industry where a lot of consulting is billed on an hourly basis. You can develop a great business doing that, but your income will always be limited by the amount of time you can work. It can also put you at the mercy of waiting until you get paid by your clients. Value-based pricing options—meaning charging for the value of the results you will help your clients achieve—can bring more stability to your income because you often are paid up front or at defined times during the project. It can free you from the model of trading your time for money. It also can let you focus on providing value for your clients. On the other hand, it could take a little longer to secure engagements with value-based pricing because many clients aren’t used to anything but the hourly model.
Step 6: Prepare, Prepare, Prepare
Once you've done steps 1 through 5 and decided that you're ready to be a consultant, my advice, and I can't emphasize this enough, is to spend as much time as you possibly can preparing your back-office operations.
You want to free up as much of your time as you can to do the things only you can do and avoid spending your time trying to make up for the fact that you don't have the right team and systems in place. If you prepare up front, it will be easier to focus on getting and serving clients when you’re ready to take the leap.
If you're in a situation where you just don't have a lot of lead time, you're going to have to prioritize the things that matter most. But for most people who are thinking about being consultants, it’s best to set up as much as you can before you leave your job.
Here are the operational (back-office) areas you’ll need to consider:
Get Your Finances Right
You have to make a number of decisions related to finances and the life you want to have. You decided what and how you’re going to charge clients in step 5. This step is more about having a financial cushion if it takes a while to get clients and/or to get paid. Again, if you're going to become a consultant, unless you have other sources of income to support you, I encourage everyone to have at least 6 months of reserves. Having 12 months is better if you can swing it.
When I became a full-time consultant, I chose to work at a consulting firm because I needed a steady paycheck. So having a financial cushion was not an issue for me. When I became an independent consultant, everything changed. I had to have reserves because I knew there would be delays in my clients paying me. I was shocked at how long it took to get paid! Even though I had reserves, I could have used more. I thought 5 months was enough. It wasn’t. I needed at least 8 months—and that’s without any surprises in my financial situation. In my case, a couple of really expensive trips to an emergency vet with one of my pets threw off my plan.
I will also tell you that you will not always be paid according to what’s in a contract. If your contract with a client has a 30-day payment period, expect that not all clients pay you within 30 days. I’ve had to wait 4 or 5 months for some clients to pay. This is another reason having a reserve is so important, especially if you’re going to charge on an hourly basis.
If you’re going to be an independent consultant, you will need money to replace benefits you once had as an employee. You also will need to pay for new external resources to start, maintain, and grow your business.
Get a Team to Help You
If you're an independent consultant, it’s a great idea to rely on others who can help you be successful, reduce risks, and free you up to get and serve clients. At minimum, I encourage everyone to have an accountant who can make sure your finances and taxes are in order and a lawyer to make sure you are protected from legal risks.
Here are some other resources you may want to have at the beginning or ongoing:
Administrative Assistant who you can rely on to do all the things you can’t get to, shouldn’t spend time doing, or don’t do as well as they can. I have a virtual assistant who enters my expenses, helps me schedule, and handles other administrative tasks.
Graphic Artist who can develop your logo, business card, and other visuals for your business. If you want a distinct visual presence, pay someone to do it, but it isn’t 100% necessary. For example, when I became independent, I used a customizable template to create a business card.
Website Developer who can design, develop, and maintain your website. Again, there are many templates that you or your developer can use and customize if you want a website. I’d suggest spending money on a great copywriter rather than creating a fancy new website.
Marketing Expert to help you develop and execute a marketing plan, including developing and editing content (emails, website, e-newsletter, social media, case studies, etc.). If you are well known and well connected in your market, you may not need this support up front or ongoing, but I suggest at least investing in setting up an email list with a way for people in your market to subscribe and hear from you, having a LinkedIn presence, and developing case studies.
Professional Coach or Mentor who is a trusted professional that can encourage you and give you concrete advice for growing your business.
Get Your Systems in Place
Set up solid systems and automate as much as you can! This will make your life easier and allow you to focus your time on getting and serving clients and building your business pipeline. It’s much more difficult to fix processes and put these systems in place once you're busy with clients. (Tip: With your guidance, your virtual assistant can set up a lot of this for you.)
Here are basic systems consultants need:
Scheduling – Find a system that lets you send someone a link to schedule with you.
Emailing – Get your business email account set up and an email management system for storing email addresses and sending out email marketing communications.
Finances – Have financial software that can track your revenue and expenses and calculate your profit and loss.
Budgeting – Have a template for creating contract budgets. These sometimes are included in financial software or you can create one in Excel.
Invoicing – Have a way to do electronic invoicing. This often comes with financial software.
Time tracking – Have a way to track your billable hours if you bill hourly.
Contracting – Have a way to send contracts and have clients sign and return them electronically.
Communications – Have a social media management platform that lets you create social media content in batches and schedule them ahead of time.
Taxes – Have a tax system if you do them yourself.
Customer Relationship Management (CRM) System – Have a system for tracking and managing your relationships and interactions with current, past, and potential clients.
Step 7: Develop Your Business Development Plan and Take Your First Steps
The last thing you need to have in place is a plan for how you're going to get new clients and keep your pipeline full. Your business plan should at least include strategies for how you will get your initial clients as well as a financial plan with assumptions for your revenue and expenses as you build your business. It won’t be perfect, and it doesn’t have to be fancy. And it should change as you learn from being a consultant in your market. But it’s good to have something to guide your actions as you transition into consulting.
Most of your business is going to come from people who already know you and know you can deliver value. It will also come from people who are going to hear about the wonderful things you do from your clients and others in your market and want to hire you based on that word of mouth. So start with your network. You’ll need to have multiple ways to connect with people in your network, such as attending events that attract people in your market who might need your help or could recommend you to potential clients. You’ll need to have your communications ready for networking, exploratory conversations, and follow up. These might include an email to your network, a brief description of what you can offer to help clients get the results they want, a strong and enticing LinkedIn profile, social media posts, case studies, or e-newsletters you can share when reaching out to your contacts and attending events. The more you can plan ahead of time what you will do to get business and create some of your marketing elements in advance, the more quickly you can move forward to get clients.
If you can, start some exploratory conversations before you leave your job. It’s helpful to lay the foundation with folks you know in your market and get them ready to help you. Of course, you have to be careful with this if saying anything to anyone puts your current job in jeopardy.
Should you consider marketing yourself on online professional marketplaces like Upwork and and Fiverr? Many new consultants do. There's nothing inherently wrong with that, but, depending on your market and your brand, that choice could work either for or against you. For example, in my market, which is healthcare consulting, being on one of those sites would diminish my brand and signal that I’m less valuable in the market. It might be different in other markets. Make the decision based on what’s normal and valued in your market. If you’re not sure, ask people who are in your market.
Being a consultant can be a wonderful way to earn a living and help clients achieve great things. If a consultant’s life is the right one for you, then take the time to take thoughtful, deliberate steps to get there. As I said, once you move into the world of consulting, you want to spend the majority of your time executing on your plan rather than creating it. You don't have to do everything, and you don't have to do everything perfectly. But the more you do to lay a foundation for yourself, the faster you can build your business and have the life you want.