The job market is changing. More and more people are exploring entrepreneurship as a career, side hustle, passion, or necessity. According to Intuit Canada, 45 per cent of Canada’s job market will be made up of self-employed people by 2020. This is worrying, given that 30 per cent of small businesses fail within five years of entering the marketplace and nearly 7,000 businesses go bankrupt every year in Canada. The main reason these businesses fail is due to lack of planning and inexperienced management, according to an Industry Canada study.
A consultant is an expert in a particular field who gives professional advice to entrepreneurs and companies to help their businesses thrive. As the number of small businesses increase, so does the need for consultants. If you’re looking to start your own consulting business, these are things you’ll want to know.
Identify What Your Area of Expertise Is
There are several different kinds of consultants; business, legal, marketing, and technical are a few examples. The first thing you’ll want to do when starting a consulting business is to figure out your strengths and areas of expertise. It’s important to be honest with your self-assessment, and ask yourself questions like “Is there a demand for this service?” and “Do I have a unique point of view?” You should consider areas you excel in at work, hobbies you’ve mastered, or other areas of interest as the focus of your consulting business. Whatever niche you choose, it should be one you enjoy, especially if you’re consulting full-time.
Other valuable assets for a consultant include good communication and interpersonal skills, strong time management abilities, sound organizational skills, and acute critical and analytical thinking. Whether it’s software, cutting-edge information, or professional certifications, it’s crucial to find out what’s important in your industry and expand your knowledge in that area.
(How Do I) Get Certified
The licences and certifications required for you to start your consulting business will depend on which field you specialize in. Consulting for certain fields, such as real estate or engineering, requires you to get special licences for legal and competitive purposes. In other fields, it’s common for consultants to hold special designations such as a CGA (Certified General Accountant) or a CPA (Chartered Professional Accountant). The Certified Management Consultant (CMC) designation is the only international certification for consultants that’s recognized in over 40 countries.
Most municipal governments will require you to have a municipal business permit even if you’re working from home. Starting a consulting business doesn’t necessarily mean you’ll have to start and register a corporation – in many cases, you can simply work as a sole proprietor. Also, register your business with the Canada Revenue Agency (CRA) if you plan to hire employees or will make more than $30,000 a year in profit. Regulations vary from one jurisdiction to the next, so it’s wise to contact your local government’s business agent. BizPaL, a partnership between multiple levels of government, is designed to streamline access to information on certifications, licenses, and other permits you may need.
To compete with other consultants, it’s helpful to know what qualifications employers are looking for. Most employers require consultants to have a minimum of two years of working experience or a bachelor’s degree majoring in a subject like business, accounting, marketing, or finance.
Find Your Target Audience
If you’re an insurance consultant, it’s not enough to say that your target audience is people looking for insurance. You need a clear idea of who your target audience is and how best to serve them if you’re going to be a successful consultant. Consider the following questions when trying to narrow down your target audience: “Where is your target audience?”, “What are the biggest challenges they face?”, “Why are they seeking your help?”, “Who is your competition?”, “What makes you unique?”, and “What are your clients’ end goals?”
It’s important to match your skills to your prospective clients, particularly when you’re just starting your business. Don’t be afraid to say no if you don’t think you’re a good fit for the task. If possible, recommend the client to someone who’s a better fit for their needs. Also, beware of spreading yourself too thin in the early stages of your business – it’s better to avoid doing too much rather than lose sight of what your business does best.
Networking
Networking means connecting with people involved in your industry as well as having a digital presence to connect with potential customers. A recent Local Search Association report finds that 63 per cent of consumers use websites to find or engage with businesses. Also, 30 per cent of consumers won’t even consider a business without a website. Google gives your business more authority in local rankings if you have a website, so be sure to make it SEO (search engine optimization) compliant. Services like WordPress and Squarespace make building a website easy, and you can secure a domain name through services like GoDaddy.
Networking and referrals are crucial for building your business, so consider joining Facebook or LinkedIn groups that your target audience might frequent. It could also be useful to develop an outreach strategy. Writing and sharing posts will make you familiar with the community (and vice versa), allow you to show your expertise, and keep you in the know with events, workshops, and networking opportunities.
Set Your Rates
It’s easy to charge less than you’re worth when you’re new to consulting, especially with no proven results. Your best bet is to first research what consultants in your field are charging in your area, which sites like Glassdoor.com can help accomplish. It’s important to be realistic, and also remain competitive, when setting your rates. You’ll want to figure out if you’re charging clients an hourly rate, by day, by project, based on their goals, or by some other measure. Consider how you’ll bill your clients and how you’ll accept payment. Platforms such as FreshBooks, Invoicely, and Due allow you to automate billing cycles, track and manage invoices and payments, and run reports on your earnings.
Marcus Medford | Contributing Writer
