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Why Building a Consulting Business Is Harder Than It Initially Seems If you're trying to be a consultant, remember the words, "Customers buy for their reasons, not yours."

By Anna Johansson Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.


If you've experienced difficulty building up a consulting business, you aren't alone. The number of consultants in the United States has grown every year since 2012, reaching more than 637,000 in 2016. So, it's unlikely that every one of these people will achieve succcess.

Related: How to Get Started as a Paid Consultant to Companies

The turnover rate for consultants is also high compared to industry averages, yet it remains a popular choice for new entrepreneurs due to its perceived simplicity. To be a consultant, you don't need to invest in heavy machinery; you don't need to buy a franchise; and you may not even need to build a brand or get an office -- you just put our your shingle and charge money to give people advice.

But once you do get started as a consultant, you'll likely discover things aren't quite as simple as they initially seemed. So, what are some reasons for that? Why is consulting so much harder than you'd imagined?

Consulting complications

These are some of the biggest complicating factors in consulting:

1. The need for results

If you want to get and keep clients, you'll need to prove that you're worth what they're paying you. As consulting maverick Sam Ovens told The Epoch Times: "Helping clients get customers is absolutely the most important thing."

In short, you may be able to give your clients good advice, but if they can't see that advice translating into bottom-line revenue, they aren't going to keep you around. What's worse: if you aren't able to prove results with your first few clients, no new clients will want to hire you. Your consulting business needs to come out of the gates strong, with a results-oriented process that proves your worth.

2. Underestimation

Another problem in setting yourself up as a consultant is the perceived simplicity of the consulting model. It's true that consulting businesses don't require much startup capital (depending on your niche), and that anyone with experience in a given industry can technically qualify as a consultant, but that doesn't translate to early success in the consulting world.

You'll need to create a formal business plan, as with any other business, and to think carefully about the services you'll provide, your marketing and sales strategy and how you're going to scale.

3. Competition

Remember those 637,000 consultants already mentioned? They are your competition. Businesses looking for consultants have access to an enormous talent pool, with specialists and generalists to be found all over the country. What's more, they cover all price ranges and almost every conceivable need.

So, if you don't have a way to differentiate yourself, you're going to be lost amid the white noise.

4. Risk tolerance

There are tried-and-true ways to start a consulting business, and they're relatively easy to follow. The conventional path has proven fruitful for thousands of consulting entrepreneurs in the past, and will be for countless entrepreneurs in the future.

But building a business that follows the traditional model isn't necessarily the best approach. Instead, it's often better to take a risk and pursue a new angle, or think about consulting in a new way; it's riskier, so fewer entrepreneurs choose this path, but it will make you stand out.

Related: 12 Ways to Generate Leads for Your Consulting Business

5. Audience-targeting

Business author Orvel Ray Wilson once said that, "Customers buy for their reasons, not yours." And there's a lesson there.

When most professionals start thinking about consulting, it's for self-centered reasons. They think about the skills they have, the experiences they've gained and what they could do for potential customers. On the surface, there's nothing wrong with this, but you need to reverse your thinking if you want to succeed.

Don't think about what you want to do. Instead, think about what customers will need you to do. Target the audience members you can serve best, and pitch to them in a way that they'll find valuable.

6. Pricing

Price ranges for consultants are all over the place, ranging from less than your old salary to $1,000 an hour or more. So, setting the right price point is key, if you want to succeed; the problem is,there's no surefire calculation that can help you do that.

Clearly, setting the price too high will scare away potential customers, but setting it too low could make you seem inexperienced. On top of that, you'll need to consider your profitability, and that means estimating not only the value of your time, but the extra costs it takes to run your business.

7. Reputation

Much of your consulting success will boil down to your reputation in the industry. If you try to start a business before you've made a name for yourself, you'll fight an uphill battle to try to develop yourself at the same time that you're building your client base.

Without having a pre-existing reputation, you'll find that the effort to secure those first few clients is brutal.

Taking the first step

Despite the unique challenges it presents, the consulting industry is not an unapproachable one. Most of these obstacles present themselves in the earliest stages of your business's development, so if you're prepared enough to get past them, you'll be able to build enough momentum to keep your company alive for years.

Related: 4 Essentials That Persuade Companies You're the Expert They Should Hire

With a strong reputation, a way to differentiate yourself, a reasonable price point and the offer of true value for your clients, you should find that nothing can stop you from building the consulting business of your dreams.

Anna Johansson

Freelance writer

Anna Johansson is a freelance writer who specializes in social media and business development.

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