7 Hacks for Starting a Consulting Business

I remember vividly being in front of the Angel Investors. I was pitching a coupon company with a social good component. The idea was solid, the website and infrastructure built, and my presentation was on point. They asked good questions, and I left with a confidence that I would receive some, if not all, the investment capital I needed.

Fast forward a week and I was sitting in the office of the main investor and being told why I was not receiving any money. He explained, “we almost unanimously agreed that was the best presentation we had heard, but you simply didn’t ask for enough money. That let us know you were too green to succeed.”

What a punch in the face. Not asking for enough money? How could that have been my mistake? In retrospect, they were correct. We were competing amongst giants and trying to fight on a shoe-string budget. Ultimately, the business starved to death.

Why am I bringing up an angel investment story when talking about launching a consulting business? Because this is the fatal mistake most consultants make. They don’t value themselves enough.

They assume that a more reasonable cost will be more attractive to business owners, when in reality, it is communicating that you don’t value yourself. Why would they want to hire someone that doesn’t know how to value their services in a highly profitable way?

Additionally, most business owners and companies are aware that financial investments they make are just that, investments. They aren’t throwing away money. They are opportunities to find strategies, insights, or simply objective feedback they couldn’t get anyway. An inexpensive investment is typically a poorly performing one.

So that’s hack no. 1.

1. Value your services at the absolute maximum level you feel comfortable. You might not land every client, but you’ll have more buy-in and effectiveness with the ones you do.

2. Value yourself. Not the “knowledge.” I once worked with a billionaire who was also a consultant (for fun, didn’t need the money). He would consistently say, “truly successful people believe they are smart enough and resourceful enough to bring value. Their confidence isn’t in what they know, but who they are.

3. Your client knows their industry better than you. In 99% of cases, your client will know far more about whatever industry they are in. However, because of their proximity to the industry they will often get lost in the weeds. It’s the case of being the fish unaware they are in the fishbowl. Your job is not to “educate” them about their industry, but to reveal what they are missing or what they can’t see because they are too close. Often it’s the simple things “we all know” re-applied that make the biggest differences.

4. People are Priority over Products. We often over-estimate the logistics of a business running successfully, and under-estimate the influence of the individuals. Businesses are just people. Which mean, their attitudes, personalities, shortcomings, fears, passions, and interpersonal issues all affect the business. If you can help the people working in the business to be happy and healthy. The business will become happy and healthy.

5. You are not their solution. Their solution is their solution. Many consultants put far too much pressure on themselves to create the solutions, answers, strategies, and insights necessary to make their client’s businesses succeed. Instead, approach consulting with a curiosity. Communicate openly and honestly. Get to know the people involved. Often, solutions emerge when we are present when consulting. It might come from the clients, a 3rd party, a competitor, or possibly from you. But regardless, anxiety does not produce results. So the pressure to have the answers can never be front and center.

6. You’re already better than you think. A consultant draws upon their experiences. They don’t reinvent the wheel. If you are considering becoming a consultant, you likely have a wealth of experiences to draw from. They might be business experiences (successes and failures), things you have learned, or experiences from daily life. Regardless, your life has been a wealth of challenges and learning opportunities that equip you with significant value. The most impactful offerings you give your clients will be the things you have personally earned in your own life first.

7. If it feels too heavy, it is too heavy. Most newbie consultants think that they must do everything right. Have the right marketing plan, the best website, keep up with social media, be on Linkedin regularly, etc. And in most cases, that only accomplishes two things: Burn out or Paralysis. Either way you don’t get the results you want. Many consultants I know don’t have a website, don’t have a business card, never use social media, etc. But, every good consultant does what works best for them. Some of you naturally enjoy social media, others enjoy networking, still others want businesses primarily online. The important thing is to remember to be you, and pay attention to whether your activities are bringing you pleasure, or feel like things you “should” do.

At the end of the day consulting is a person-to-person business. It is the ability to build rapport with someone inside of a business, likely the owner, and provide value to them. The more experience you get, the more effective you will become at recognizing familiar patterns, recognizing potential gaps or opportunities, and building confidence in your consulting skills.

That being said, the best thing you can do is launch. Launch ugly. Launch messy. Just launch. Within a few years you’ll be more polished, capable, and likely working with more affluent clients. But without the real-world experience of being a consultant, you won’t be able to sharpen your skills. You’ll be stuck in the same place, different year, and waiting for the stars to align to “do what you really want to do.”