Guide to Setting Up a Consultancy Business

Be a Successful Consultant: An Insider Guide to Setting up and Running a Consultancy Service

Consulting can be defined as providing independent services to meet a variety of clients’ needs in exchange for money. The critical factor is money. It is different from contracting because, among other things, consultants:

-Have more than one client
-Are not told how, just what
-Have their own place of work
-Are responsible for their own output

Business life is changing drastically and these changes are creating new opportunities in the world of work, which is moving from a stable business environment in earlier decades to radical, complex and increasing change. Thirty years ago companies saw the future as somewhat predictable and manageable with gradual incremental change. Change occurred in a linear fashion where one cause produced only one effect, with a simple additive property, i.e. 1 + 1 = 2. Change now is being driven from a variety of perspectives and is happening exponentially. There are non-linear relationships between causes and effects, where there can be multiple solutions to one problem and there is synergy with the interaction of the parts, i.e. 1 + 1 = 4! The role of consulting is part of the self-employed service industry. Consulting remains a lucrative growth industry for those who are able to innovate for their clients’ benefit and it continues to be a productive outlet for thousands of solo practitioners who choose this profession over a 9-to-5 job working for someone else.

Consulting is a service business, which means that:

The deliverable is somewhat intangible (there may be tangible components such as products).

It is harder to standardize.

The person providing the service plays a considerable role in the success of the service.

It requires less start-up costs and often lower overheads – it can be you and an office!

The types of services that consultants provide will vary from industry to industry and individual to individual, and will include such support as problem-solving, assessing needs, making recommendations, providing additional resources and implementing ideas.

Consulting can be viewed as a state of mind: a common approach to a situation whether you are internal or external to an organization. Consultants can range from, to name but a few:

Strategic planning consultants who help organizations define their vision and direction.

Process reengineering consultants who provide support evaluating and recommending process improvements.

Training consultants who provide services such as training programmes and curriculum development.

Computer consultants who may assess current systems effectiveness, and recommend or implement systems improvements.

Marketing consultants who help design new product improvements and design product launch strategies.

Consulting is growing as organizations focus on their areas of specialty and use consultants to provide additional services. Many consulting companies originate when organizations lay off individuals and then use their services on a contract basis. Oracle has its own consulting division, and yet many consulting companies have sprung up to supplement its services.

Because of the many changes in the business industry, there are many more consultants today than ever before.

The consulting industry is diverse, unregulated and broken into several categories:

Large national and multinational firms employing more than 50 consultants, e.g. strategic consulting firms such as McKinsey and Company, and Bain and Company, the large accounting firms such as KPMG, Ernst and Young, etc.

Medium-sized firms employing between ten and 50 consultants.

Individual practitioners. Venture magazine (a US publication for small business startups) estimates that more than half of all consulting firms are one-person operations.

Internal consultants. These consultants work with only one company’s divisions, subsidiaries and new acquisitions. The money they receive is their salary.

Public Agency consultants such as the General Accounting Office and the Service Core of Retired Executives provide consulting both to private and public businesses and to Government agencies.


The Consultant Singularity

We all understand that consultants come in every shape, size and flavor. Consultants, to be effective, take the “lessons learned” from decades of experience and couple those experiences with strong investigative skills and tools to define a path forward that will result in the outcome that the client is anticipating. We consult on business processes, management approach, specialized applications and we even apply our ability to uncover need such that it results in consultative selling. Regardless of the client’s mission, the desired outcome, or the impetus for the consultation, there is one overriding truth (a singularity) that must always be maintained. Consultants, to be true to their calling, must always be the client’s advocate.

I define an advocate as someone who supports and defends a particular group or cause. To be a client advocate, the consultant must be willing to forego any personal bias or preconceived notions to become a proponent and promoter of the client’s intellectual capital (and by intellectual capital we mean “everything that goes out the door at the end of the day”). Some synonyms for a good consultant might be Champion, Supporter, Campaigner or Crusader. To be effective, the consultant must be able to assume the role of a dedicated defender against anything that detracts from the client’s mission.

Client advocacy may seem contrary to those in a consultative selling role but without this singularity the consultant can never achieve the credibility that is crucial to a successful consultancy. Even in consultative selling, acting in the client’s best interest has to be the foundation of every action. Each consultant in a selling role must ask themselves “Are you first a consultant, or a salesman? ” If your answer is Salesman, this article isn’t for you. But, if you are promoting an effective solution, and if you truly believe in that solution, resolving the need for promoting the sale and the paramount need for acting in the client’s best interest can be complimentary. Just be aware that there will be times when your solution may not be in the client’s best interest, and in those cases you must suggest that the client take an alternative path. The credibility you gain by staying true to the role of an advocate may be of more value than that single sale.