If you’ve decided to begin working for yourself, you’ve taken an exciting step towards new challenges and opportunities. One way to set up on your own is to become a consultant. But what’s involved in being a consultant, is it the right decision for you, and what steps do you need to take to get there? Read on to find out.
What Is A Consultancy?
A consultant is an expert who offers their services to businesses in order to advise them on matters within their area of knowledge. For example, a management consultant identifies problems within a business and helps find ways to solve them. They might review opportunities for growth, improving operations, or accounting and tax processes. A management consultant could make the world of difference to a company, helping them to tackle problems they are unable to face alone. As with many consultancy types, this work can be very rewarding.
Other types of business consultant include IT consultant, human resources consultant, operations consultant, financial advisor consultant, risk and compliance consultant, and strategy consultant.
Is Being A Consultant Right For You?
In order to be an effective consultant, you need a skillset that includes excellent communication and organisation – being an expert in your chosen field is just the beginning. If you enjoy solving problems, working with data and analysing situations, then being a consultant could be a great career change for you.
Depending on your business, this career may give you the opportunity to travel and to work alongside C-suite staff members at companies you’d be proud to put on your CV. You could find yourself working in fields from healthcare to hospitality to technology. Your clients will expect you to deliver results on budget and on time, and you'll be working towards goals such as cutting costs, increasing profit, or improving productivity. Your work will also include modelling outcomes and making recommendations. Not only will you complete these projects, but once they're done you will also measure their success. You may find that every working day is different, which could suit you if you crave variety.
It’s a good idea to write a business plan that will help you to tackle issues you need to consider before you get started. Writing a business plan will help you outline what you want to achieve and how you’re going to get there, which will help you think more about whether being a consultant is right for you.
What Steps Do You Need To Take To Set Up As A Consultancy?
1. Check Your Qualifications
If you have plenty of experience in your field already (which is a prerequisite to being a consultant), you’re likely to already have the qualifications you need. However, it’s worth checking that your certifications are up to date. For example, is there a certificate that is specific to your field and could boost your knowledge and desirability? If you already have certifications, make sure they are up to date and not about to expire before you get started.
2. Create A Business Plan
A business plan is an important part of getting your business up and running, and mapping out where you want to go and how you will get there. For example, how will you fund your business and find clients? What is your target market? How much will you charge, and why will people go to you over your competitors? This may involve writing up a SWOT analysis to identify your strengths, weaknesses, opportunities and threats – what are these, and how will you either mitigate them or use them to your advantage? A business plan is also something you will need if you’re looking for investment, loans or funding from outside sources.
3. Register Your Business
You will need to register your business, and as a consultancy firm or a consultant, you’ll likely want to set up as either a sole trader or a limited company.
Registering as a sole trader is the easier option, but it means you will be personally liable for any financial losses and debts, which means any assets you own could be at risk. You will need to register as self-employed, submit tax returns to HMRC, and keep your National Insurance contributions up to date.
On the other hand, registering as a limited company means your business is a separate legal entity owned by shareholders and any debts will be with the company rather than you personally. You will likely need an accountant and you’ll need to submit your accounts annually with Companies House.
4. Take Out Professional Indemnity Insurance
Professional indemnity insurance can cover you for the legal cost of defending your business against any claims such as libel and defamation negligence, breach of confidence or loss of information. This is very important and some clients won’t work with you unless you have this in place as a consultant. You may also want to take out public liability insurance, which will cover you if you regularly attend meetings at other companies’ premises, or if they come to you. It will also cover you if someone tries to claim against you for an injury they sustain or property that is damaged as a result of your work.
5. Reach Out To Your Current Professional Network
Now you’re up and running, it’s time to find your customers – and one way to do this is by using your existing professional network. Can you reach out to people you’ve worked with in the past to let them know about the new services you’re offering and see if they are interested in meeting with you? Even if they aren’t currently looking, word of mouth can do wonders for growing your business at those early stages.
How Can Paramount Company Formations Help?
Paramount Company Formations can help you to set up your business. Our company formation packages come with a free business bank account for twelve months, and we offer ready-made companies and vintage companies, as well as registered address services, VAT registration, confirmation statement services, and more.