Biz Flash: What to Know Before Starting a Consulting Business

Knowing everything or how to solve every challenge is impossible, particularly when running a business. Suppose an organization struggles with a particular issue that its internal team cannot resolve due to a lack of expertise or resources. In that case, they often will call on a consultant who can help them.

Consultants are problem solvers, offering solutions to meet their clients’ particular challenges and helping to improve business performance. They operate across various sectors, from business to finance and IT to marketing. While some consultants may work independently, others may be part of a group of experts.

Often, people begin consulting because they have completed advanced education such as an MBA or have worked in a given field for several years and have gained a high level of expertise, as is the case for Jamie Levin, founder of JLevin Communications: “Consulting to me is serving again in an advisory role. If someone’s looking for a consultant, they’re looking for someone who can be a natural extension of their team and serve as a subject matter expert. This can be because they don’t have someone internally; they just need someone to fill a void for a certain amount of time, they need extra hands or whatever the case may be,” she shares.

“I work in the communications realm, so anything regarding public relations, reputation management, internal communication, and executive messaging related. I essentially serve as a seamless extension of the team, aligning with their strategic goals and supporting their vision.”

However, getting started with a consulting business can be a daunting proposition: “Do your research first. Figure out what you really need, especially if you are jumping from a full-time position,” advises Levin.

“For me, I knew I needed one steady client who would offer me at least 40 hours a month. Don’t try to build out your whole book of business and then make the move to consulting. If you’re trying to build your business at the same time, you’re working for another company, you’re going to burn out before you even start.”

Keep reading to learn Levin’s top reasons for working as a consultant, the potential challenges of working in this field, and her tips and recommendations to keep in mind as you get started.

Meet the Expert: Jamie Levin

Jamie Levin is a strategic communications consultant with nearly 20 years of experience spanning internal and external communications, events, community initiatives, and engagement. She is a versatile executive with an excellent record of achievement and a collaborative partner supporting business objectives and bringing vision to life. She has demonstrated her commitment to being a proactive leader and innovative problem solver who is recognized for implementing effective team-building skills, successfully identifying opportunities, employing cross-functional initiatives to support company culture, and utilizing creative business-building analytical and problem-solving skills.

Levin prides herself in being an excellent communicator who is strategically adept at translating strategy into a sound agenda that directly connects to overall business goals while reinforcing a people-first mentality.

Upsides and Downsides of Running a Consulting Business

Running your own consulting business has significant upsides. One of the primary pluses of this field is the ability to choose when you work, who you work with, and what you work on: “Flexibility for me, at this point in my life, has been a big one. While I can put on a million-dollar event, at this point in my life, it’s not something I want to do,” says Levin. “I’m very appreciative when people ask me to do something, and I’m able to say to them that it’s just not the right time.”

Another positive for Levin has been the variety of work. “One of the things that is exciting is getting to dabble in different industries. I came from agency life, where I only had one client. That seemed interesting during agency life because I was pulled in a million directions, to now where I have clients in nonprofit, beauty, automotive, commercial cleaning, and even energy. I’m admittedly learning some of them as I go, but it’s exciting and fun,” she shares.

However, there are also some significant downsides: “When I don’t work, I’m not getting a paycheck. I can go on vacation with my family, but I don’t get PTO,” says Levin. “Tracking time isn’t always fun, but it’s necessary. For some people, unpredictability can also be an issue. You don’t have that steady paycheck, and while you may have steady clients, you’re not getting a set dollar amount every two weeks. That can be really exciting when you see month over month, and you can show yourself progress.”

Another factor that can be challenging when running a solo consulting business can be isolation and loneliness: “Some people need to be around people. I go to my clients’ offices, and I’m on phone calls often, but 80 percent of the time, I’m by myself. I thrive in that environment, but for others, it could be a challenge. I’m trying to be more mindful of getting out in the world and doing things like getting up and walking away from my desk. Otherwise, I could be working 24 hours a day because my computer’s always there,” remarks Levin.

Keys To A Successful Consulting Business

Over the past two decades, Levin has learned many lessons on running her consulting business successfully. Here are her top tips:

Know What You Offer

For Levin, understanding what she brings to the table has been instrumental in her success as a consultant: “There’s value in your experience, and there’s power in your perspective. If someone is willing to go outside of their company and not have a full-time team member, it’s typically because you have something that they’re in search of—whether that’s experience, access to someone, or something else that they don’t have. That is your value.”

Choose Your Clients

Picking the right people to work with is critical to being successful as a consultant: “A lesson learned is to be mindful of who you work with. As a consultant, if you’re in a situation to be a little picky, it can make a world of difference. Because I have been selective about choosing my clients, my experience has been really positive, and I’ve enjoyed it. I think some people feel the pressure to chase the dollar, understandably, so they start working with the wrong clients and then they’re miserable, ” Levin advises.

“Everybody’s situation is different, and sometimes we’re not so lucky to be picky, but if someone’s hiring you and it’s not working out, just like any other relationship it’s okay to part ways.”

Set Your Prices Appropriately

Running your own consulting business also means setting your own prices. However, setting the appropriate rate can be daunting. “I did a lot of market research before setting my prices. I’ve always been very open about my salary with colleagues because I think it can only benefit everybody,” shares Levin.

“When I started, I talked to some people who had been consulting for a while in similar industries, with similar backgrounds and years of experience. I was also mindful of what types of clients I wanted to work with. Do I want to work with clients that are always in a crisis communication situation? Respectfully, no, I don’t—even if they come with a bigger price tag.”

Levin opts against a retainer with her clients and instead bills her work hourly. “I do not want to prioritize one client over another. Sure, some projects are more timely, so naturally, I prioritize them. But for me, it was really important that I wasn’t going to say, ‘Okay, this client always comes first in my book.’ It is too much of an internal struggle for me,” she shares.

Along with setting pricing, Levin has found that it is critical to communicate with clients about what an hour of work entails: “I have to help guide them in their expectations. A client may book for 20 hours a month, but their expectations align with something that will take 60 hours. I have to be mindful and say to them, ‘I would love to be able to do it for you for 20 hours, but respectfully, as the person you have hired as a subject matter expert, it’s not something that I can get done in that time frame successfully for you,’ she says.

Finding Clients

The number-one hurdle to starting a consulting business is finding clients. While there are many strategies to this challenge, Levin has one tried and true method: “For me, it has all been old-school word of mouth. Many of my clients are people I’ve worked with in a past life, and we have moved on to other companies. I don’t do any advertising,” she says. “A few months ago, I decided I wanted some credibility for myself, so I created a website. Is it helpful? Yes, but have I gotten leads through it? Not that I’m aware of because everyone I’m working with is through word of mouth. Fortunately, I have kept in touch with some great people over the years.”

She continues, “Your work product will speak for you. If you put forward work that a client appreciates, of course, they’re going to share your name. They will want you to continue getting business because they want you to keep doing business for them.”

For some successful consultants, the art of turning away clients can be as important as finding them. “It’s unfortunate, but sometimes I have to say no because I have to be mindful of being able to service my existing clients. Typically, when I tell clients I can’t take them on at this time, I can refer them to a great person who does have the time or is not in my specific focus area. I’m always happy to refer to people who will reflect positively upon me just like I would expect anybody who would share my name, that they would think I would reflect positively upon them,” Levin adds.

Communicate, Communicate, Communicate

Setting and meeting clear expectations is critical to success as a consultant: “It’s very similar to when you’re in different departments within a company. No one else has any idea what’s on your plate at any given moment,” says Levin. “I always tell my clients that I will meet their deadline, but they need to tell me what it is so I’ll be sure to meet their expectations. Be clear and consistent in your communication.”

Communication is equally critical when things don’t go well. “I’ve had to have conversations with clients where it’s not always so pretty, but are necessary. It helps us all in the long run to just tell them that their expectations are completely outrageous,” she says.

Stay Organized

Staying as organized as possible is a key to juggling multiple clients, deadlines, and projects: “I’m extremely type A and efficient. I pride myself in never letting myself get too far behind, whether on invoices or my list of work,” Levin says.

“You need to be mindful that you are running your own business while helping other people run their business, and so there can be some competing priorities. If you don’t stay on top of your work and invoices, why would you expect your clients to pay you on time? Recognize what tools are out there that can help you stay organized and not take on too much so that you feel overwhelmed. When that happens, you’ll never be organized.”