Want to start a new consulting business?

Or, are you looking for ways to take your consulting practice to the next level by forming a legal business entity?

Whatever the case may be, follow this comprehensive checklist to get your consulting business started the right way.

The good news is:

We’ve got you covered.

As business owners ourselves, we know what it takes to start and grow a small business and which formation mistakes to avoid.

We’ll guide you through everything you need to create a consulting company – from choosing a consulting niche to completing paperwork, attracting potential clients, and offering services.

Let’s get started.

A 6-Step Checklist to Starting a Consulting Business

As a consultant, you need to consider a lot of factors and fulfill a set of requirements to start a consulting business in the United States.

The checklist below will help you make sure that you have everything you need to start a consulting practice business.

Step 1: Choose a Specific Niche to Target As a Consultant

Anyone with a skill or expertise that can help people solve a problem can become a consultant.

You need to figure out what type of consultant you want to become. Some of the most popular option you may consider include:

  • Marketing consultant
  • Public relations management consulting
  • Accounting consultant
  • Business consultant
  • Legal consulting
  • Human resources management consulting

How can you pick the right niche for your small business?

  • Assess your experience, strengths, and skills.
  • Analyze if you can help people solve problems in a specific area.
  • Hone in on your skill sets and expertise to make sure that you can offer something valuable to potential clients.
  • Analyze the target market you’re considering offering services in. Check out what others are offering and at what prices.

Step 2: Create a Business Plan for Your Business

To build a successful consulting business, you need to start thinking like a business owner rather than just a service provider.

You should create a proper plan to build, nurture, and grow your small business as a consultant.

  • Choose a business name that is unique, relevant to your niche, easy to remember, and scalable.
  • Check whether the names you have listed are available to register as a trademark, legal entity, domain name, and social media handles.
  • Analyze the taxation and operational needs of your business.
  • Decide on the right business structure for your company. Do you want to form a sole proprietorship, a limited liability company (LLC), or a corporation?
  • Find an office space to work on your small business projects and maintain a work-life balance.
  • Define the services and deliverables you’ll offer to your clients.
  • Figure out how to fund your small business. Do you have funds? Will you need to find investors?
  • Calculate the cost of operating a consulting business. You should consider office space rent, overhead expenses, internet charges, legal paperwork fees, and marketing budget while calculating your business cost.
  • Set up an hourly rate for your services or finalize a pricing structure for specifically-curated service packages.

Are you new to the business world?

Then, our Business Start Up guide can be a useful resource for you. It covers everything that new business owners may need to register and run their businesses.

Step 3: Register Your Consulting Business As a Legal Entity

Registering your business is a crucial step to stay legally compliant and avoid any legal hassles or headaches in the long run.

  • Understand your business requirements. How many business owners are there? Do you need help to raise funds? How do you want to be taxed?
  • Figure out which business structure aligns best with the needs of your small business.

As an individual consultant, you may start a sole proprietorship. But you’ll be liable for all company profits and losses.

You can choose to form an LLC single-handedly or with partners. This structure will protect your personal assets from business liabilities. Company profits will directly pass on to LLC members, who will then report them on their personal income tax returns.

If you want to start your consulting business with the help of outside investment, you should form a corporation. You can attract investors by selling stocks in the company.

  • Register your business with the Secretary of the State’s office in your state by submitting the required documents.

To form an LLC, you will also have to file Articles of Organization and appoint a Registered Agent who will be responsible for receiving legal documents. You should also create an LLC Operating Agreement.

If you want to incorporate, you will have to file Articles of Incorporation and appoint a Registered Agent. You should also create Corporate Bylaws.

  • Keep track of the ongoing filing and annual reporting requirements for your registered consulting company.
  • Apply for an EIN (Employer Identification Number) with the IRS for taxation purposes. It will allow you to hire consultants and other employees for your firm.

Completing the paperwork involves a lot of tedious work.

While many business owners hire a lawyer to do the paperwork for them, their services are quite expensive.

But the good news is:

Our well-curated business formation packages can make it easy for you to start a consulting business easily and efficiently. Check out our pricing plans here.

Step 4: Fulfill Other Legal Requirements of Starting a Consulting Business

Registering your business with the state and the federal governments is not enough. There is other paperwork involved as well.

  • Create independent contractor agreements for freelancers or other contractual employees.
  • Create unilateral or multi-lateral non-disclosure agreements.
  • Create employee agreements.
  • Create confidentiality agreements.
  • Check with your state and federal governments to find out about any business licenses or permits you may need.
  • Buy suitable business insurance plans to protect your business from losses and debts.
  • Open a business bank account for your consulting firm to separate business finances from personal finances. This will help you reduce your liabilities and risks as a business owner.
  • Set up an accounting and bookkeeping system to keep track of the cash flow, profits/losses, and tax liabilities of your firm.

Step 5: Create a Robust Marketing Plan to Get Clients

Successful consulting businesses are built on a solid client base. To attract more clients, you need to create an effective marketing strategy and write a marketing plan.

  • Network with family, friends, past colleagues, and professionals to get referrals for your new consulting business. 
  • Build a business website.
  • Create official accounts on multiple social media channels.
  • Identify the right marketing channels to attract, engage, and convert people into paying clients.
  • Showcase your knowledge and skills in your target market by writing blog posts or being involved in industry events. 
  • Leverage paid ads, email marketing, video marketing, and influencer marketing to gain more traction once you have a solid customer base and want to accelerate your growth.
  • Test and optimize your marketing strategies to generate better results.

Step 6: Deliver Great Consulting Services

Last but not least, solving problems and delivering great services is the key to growing your business.

  • Upskill yourself and enhance your expertise.
  • Learn about the latest updates and strategies in your field.
  • Deliver high-quality consulting services to your clients.

Remember, satisfied clients will bring you more business and greater recognition in your target market.

Are You Ready to Start a Consulting Business?

Business owners have a lot of questions when starting a new business. This checklist covers all of the major steps involved in setting up a consulting business.

While setting up and building a business from scratch might take time, it is worth the effort. You should follow your passion and think like a marketer and a business owner at the same time.

Another start-up tip we would like to give you is to keep learning. As a consultant, you need to be aware of the latest things happening in your niche and industry. Make sure that you offer great value to your clients at all times to keep them coming back for more services.

Do you have other questions about starting a consulting business? Ask them in the comments below.