How to Start a Consulting Business?
Consulting business is about specialized analysis of a business and arriving at solutions while also helping companies meet their goals. Consultants advise companies and industries to create positive impacts and results. Businesses and industries often hire consultants to seek erspective on their chosen path or to get a catalyst for change in their companies.
Prerequisites for a professional consultant
To be a consultant requires one to use knowledge to provide solutions. For a start in this business, the important steps are to know what you want to consult in, which is often defined in terms of what the consultancy will not do. Consulting business like other streams of entrepreneurship also calls for hunger for opportunity.
We have talked to industry bigwigs about the right ways to start a consulting business keeping in mind the ever changing reality of today’s world. Here is what they shared.
Ashok K Laha, President and MD Interra Information Technologies, has been leading the company for a significant period and has the experience of different phases of the consulting business cycle. InterraIT has been a leader in the Information Technology Industry since its founding in 1996. Headquartered in California, the company’s operations are spread across 5 countries, with a sales network spanning the United States, Canada, United Kingdom, India and Japan. Laha touches upon some significant points, imperative in the game.
Focus on business plan
The consultants, who would aspire for success in the increasingly competitive market today, need to focus on a business plan which should work as the architectural plan for a building under construction.
You must decide on your funding strategy beforehand so that you can survive the struggling period and reach the plateau of break even in X time period without undesirable setbacks. You may procure funds from personal sources or go to bank or financial institutions or derive help from the angels who would trust your ability for certain duration and on specific set of terms and conditions.
Creating the core team consisting of people you would work with on a day to day basis to develop your business to enduring value and profitability needs to be priortised.
Today’s world as Stephen Covey said so rightly said is increasingly a knowledge oriented world and technology is the prime and possibly greatest knowledge asset you have to address your issues in business.
A consultant has to have his or her passion riveted on providing most creative work at least cost and hassle for his or her client and there lies his or her key to success.
In any business and particularly consulting you need to have an enormous storehouse of patience and never say die attitude. The entrepreneur consultant should create an internal storage of patience and endurance because however cautious and lucky you may be, you would not be able to do away with all the accompanying hiccups and glitches that go as part of your necessary education to become a mature consulting entrepreneur.
N. Chandramouli, CEO, TRA Research is a Chemical Engineer turned Communicator who began his entrepreneurial journey straight after his engineering in 1990. He shares some important decisions to be taken before starting a consulting business:
Choose your Niche – You should consult on the area that you are passionate about and also knowledgeable in. Only then can you enjoy a lifetime of consulting. Knowledge is a very important requirement, but it can incrementally accrue over time. Try to sharpen the area of consulting – the sharper you go, the better the consulting. General consulting businesses have a low probability of success as all competitive ends would be open in such a wide arena.
Knowing your Target – Once you have narrowed down on the consultancy of your choice you have to be able to target the right client. Knowing the client’s end of things is also a great advantage as it helps the consultant see things from the client’s shoes.
Selling your Idea – This will require you to brush on your selling skills in order to propogate and build a strong network. Networking is the core success to any business. It helps in building a reputation and also generates a wider audience to elevate your consultancy.
Uniqueness – At the end of the day you've got to have a unique proposal to offer your client. In a time where it can be difficult to really differentiate from what has already been covered, it is absolutely essential to provide something distinctive. Something that will pull the clients to the service and delivery you'll offer.
Roopen Roy was the managing director of PWC India, thereafter managing director of Deloitte Cosulting India and is the founder and CEO of Sumantrana, (a strategy advisory firm). Roy has been a consultant since 1986. For almost three decades, he has consulted with a diverse set of clients both in the private sector and the government. He had the privilege of being the consulting country leader of both PwC Consulting, and Deloitte Consulting. He highlights the changing trends to the aspiring consultants.
Winds of change in consulting
“The pyramids of consulting teams are shrinking,” feels Roy. “Clients are no longer willing to buy vast amounts of “junior hours”; they want the heavy hitting experts to weigh in. That creates a new scenario, where the old “Rules” acronym works not, new rules must be written,” he adds.
Consulting companies have responded to this challenge by creating IP based solutions and “products”. Some are reaping revenue streams from subscriptions. The ‘solutions’ are like IP or products that are created by a team using advanced analytics and other knowledge tools. The profitability comes either through volume users who pay subscription fees or by using the tool to architect a solution. This is a very different revenue model from the time billings of lawyers and traditional consultants.
Technology calling the shots
According to him, “The consulting industry is disrupting much the way large consulting firms are using connectivity tools and the internet to harvest the knowledge and expertise residing within their global networks. There are a number of large, global companies which are knitting together virtual networks of independent experts and consultants to deliver outstanding value to clients.”
“Future consulting companies would use technology to harness the power of distributed talent scattered across geographies but connected by a common brand and network,” foretells Roy who had the privilege of serving on the global leadership teams of both PwC and Deloitte and, therefore, had a close view of how the consulting industry has grown and evolved.