How to Start a Consulting Business

If you are an experienced consultant or just starting out, you must have a strong operational backbone to support your business as it grows. From managing projects to billing and invoicing clients, managing independent contractors and team members, logging billable hours, and managing bookings, we at SystemX have a solution to get you started. CLICK HERE to allow us to walk you through our cloud-based Business Management Platform and show you how we can help.

The dictionary defines a consultant as "an expert in a particular field who works as an advisor either to a company or to another individual." Sounds pretty vague, doesn't it? But unless you've been in a coma for the past decade, you probably have a good idea what a consultant is.

Businesses certainly understand what consultants are. In 1997 U.S. businesses spent just over $12 billion on consulting. According to Anna Flowers, spokesperson for the Association of Professional Consultants in Irvine, California, the association has recently noticed an increase in calls for information from people who want to get into the business. "The market is opening up for [the consulting-for-businesses] arena," Flowers says.

Melinda P., an independent consultant in Arlington, Virginia, thinks more people are getting into the consulting field because technology has made it easier to do so. "The same technology that has helped me to be successful as a consultant has made it easier for others to do the same," she says.

A consultant's job is to consult. Nothing more, nothing less. It's that simple. There's no magic formula or secret that makes one consultant more successful than another one.

But what separates a good consultant from a bad consultant is a passion and drive for excellence. And--oh yes--a good consultant should be knowledgeable about the subject he or she is consulting in. That does make a difference.

You see, in this day and age, anyone can be a consultant. All you need to discover is what your particular gift is. For example, are you very comfortable working around computers? Do you keep up with the latest software and hardware information, which seems to be changing almost daily? And are you able to take that knowledge you have gained and turn it into a resource that someone would be willing to pay money for? Then you would have no trouble working as a computer consultant.

Or are you an expert in the fund-raising field? Maybe you have worked for nonprofit agencies in the field of fund-raising, marketing, public relations or sales, and over the years you have discovered how to raise money. As someone who has turned a decade of fund-raising successes into a lucrative consulting business, I can tell you that fund-raising consulting is indeed a growing industry.

Things to Consider Before You Become a Consultant

What certifications and special licensing will I need? Depending upon your profession, you may need special certification or a special license before you can begin operating as a consultant. For example, fund-raising consultants don't need special certification, although you can become certified through the National Society of Fund Raising Executives. And in some states, you may need to register as a professional fund-raising consultant before starting your business.
Am I qualified to become a consultant? Before you hang out your shingle and hope that clients begin beating your door down to hire you, make sure you have the qualifications necessary to get the job done. If you want to be a computer consultant, for example, make sure you are up to date in the knowledge department with all the trends and changes in the computer industry.
Am I organized enough to become a consultant? Do I like to plan my day? Am I an expert when it comes to time management? You should have answered "yes" to all three of those questions!
Do I like to network? Networking is critical to the success of any type of consultant today. Begin building your network of contacts immediately.
Have I set long-term and short-term goals? And do they allow for me to become a consultant? If your goals do not match up with the time and energy it takes to open and successfully build a consulting business, then reconsider before making any move in this direction!

Why an Organization Wants to Hire You

According to a recent survey, here are the top 10 reasons organizations hire consultants:

1. A consultant may be hired because of his or her expertise. This is where it pays to not only be really good in the field you have chosen to consult in, but to have some type of track record that speaks for itself. For example, when I mentioned earlier that I had become an expert as a fund-raising consultant, I knew that every client who hired me was doing so partly on the basis of my track record alone. After all, if you are a nonprofit organization that needs to raise $1 million, it makes sense to hire someone who has already raised millions for other organizations.

2. A consultant may be hired to identify problems. Sometimes employees are too close to a problem inside an organization to identify it. That's when a consultant rides in on his or her white horse to save the day.

3. A consultant may be hired to supplement the staff. Sometimes a business discovers that it can save thousands of dollars a week by hiring consultants when they are needed, rather than hiring full-time employees. Businesses realize they save additional money by not having to pay benefits for consultants they hire. Even though a consultant's fees are generally higher than an employee's salary, over the long haul, it simply makes good economic sense to hire a consultant.

4. A consultant may be hired to act as a catalyst. Let's face it. No one likes change, especially corporate America. But sometimes change is needed, and a consultant may be brought in to "get the ball rolling." In other words, the consultant can do things without worrying about the corporate culture, employee morale or other issues that get in the way when an organization is trying to institute change.

5. A consultant may be hired to provide much-needed objectivity. Who else is more qualified to identify a problem than a consultant? A good consultant provides an objective, fresh viewpoint--without worrying about what people in the organization might think about the results and how they were achieved.

6. A consultant may be hired to teach. These days if you are a computer consultant who can show employees how to master a new program, then your telephone probably hasn't stopped ringing for a while. A consultant may be asked to teach employees any number of different skills. However, a consultant must be willing to keep up with new discoveries in their field of expertise--and be ready to teach new clients what they need to stay competitive.

7. A consultant may be hired to do the "dirty work." Let's face it: No one wants to be the person who has to make cuts in the staff or to eliminate an entire division.

8. A consultant may be hired to bring new life to an organization. If you are good at coming up with new ideas that work, then you won't have any trouble finding clients. At one time or another, most businesses need someone to administer "first aid" to get things rolling again.

9. A consultant may be hired to create a new business. There are consultants who have become experts in this field. Not everyone, though, has the ability to conceive an idea and develop a game plan.

10. A consultant may be hired to influence other people. Do you like to hang out with the rich and famous in your town? If so, you may be hired to do a consulting job simply based on who you know. Although most consultants in this field are working as lobbyists, there has been an increase in the number of people entering the entertainment consulting business.

ASSEMBLING PROJECT TEAMS

Projects, no matter the size and scope, are complex. If they weren’t, they might as well just be tasks on a to-do list. Luckily, projects are also a group effort—for every project, there is a project team working together to make deliverables a reality.

How do these teams come together? Not on their own! There are many ways to form project teams and many factors to take into account.

What Is a Project Team?

A project team is composed of individuals that are working together towards a common goal. This can include executives, a project manager, team leaders from different departments and team members. How this team operates depends on how it’s organized, which can take the form of different project organizational structures.

Within a typical project team structure, projects are headed by the project manager, though they also can be led by an executive that the project manager reports to. The key characteristic of this type of team is that everyone reports to the project manager or another individual at the top of the chain of command.

The project manager often manages the project, the team and all the related tasks in a project management software. Ideally, project management software allows for team collaboration as well as planning, so teams can be at there best.

Three Key Steps to Create a Project Team

As we said, assembling a project team will look different depending on the project and organizational structure. That in mind, here are a few universally helpful details to focus on when putting together your team.

Consider Interdepartmental Needs: Lots of projects require multiple departments to work together to achieve deliverables. Within the project team structure, each involved department should be headed by a leader who manages a team of individuals in their department. So, before getting into the nitty gritty of assembling the team, decide which departments to involve and who will lead them.
Create Communication Practices: Because the project team structure does involve so many tiers of individuals, it’s extremely important to keep communication fluid. Otherwise, the team will begin to feel like multiple, independent departments working toward different goals. The best way to prevent this from happening is by setting a cadence for meetings, requiring status reports, scheduling interdepartmental collaboration time and any number of other ideas.
Clearly Define Expectations: The best way to set communication up for success and keep the entire project running smoothly is by clearly defining expectations. The most successful projects are led by project managers who lay down ground rules and define expectations from the get-go. These rules can also include clear boundaries, what steps to take if something goes wrong and more. We recommend going so far as to put these things in writing and keeping the document somewhere the whole team can reference.

How to Map Team Member Skills for Assignments

Now that you’ve laid the foundation of your project team structure and assembled the team, it’s time to start giving assignments. But, before you do so, it’s extremely advantageous to assess who has the skills to best take on certain assignments. Everyone has strengths and weaknesses, and playing to a team member’s strengths can majorly improve results.

In order to learn which team members are the best fit for assignments, a project manager or team leader needs to take stock of everyone’s experience and specialties. This is done by creating a skills matrix.

What Is a Skills Matrix?

A skills matrix is a table used to quantify and illustrate each team member’s skills, experience and interest level. The project manager and/or team leader must first gauge a team member’s interest in a certain assignment. This interest is then compared to their skills. Then, this comparison is added to a table comparing the skills and interests of all team members.

To make an accurate matrix, you must create a scale to “score” individuals. When these scores are all displayed in one table, it is simpler to make objective decisions that are best for the project. It is also an excellent opportunity to take note of an individual’s interests vs. their experience, and perhaps give them more opportunities in the future.

young people group in modern office have team meeting and brainstorming while working on laptop and drinking coffee

Benefits of a Project Team Structure

When a project team is structured in a top-down way, everyone knows exactly who to report to, whether it be to ask questions, get approval, present results or anything else. There is zero confusion on which team members to collaborate with.

Another benefit of a project team structure is that it is entirely driven by the needs of the project. Different projects have different demands. This type of organizational structure is custom-tailored to these demands. Now, that isn’t to say a project team structure is always the right choice. There are potential pitfalls to be aware of.

Pitfalls of a Project Team Structure

Above we discussed how project team structures are determined by the needs of the specific project. While this can be a great thing, it can also result in waste. How? At the beginning of each new project, a new project team structure must be created, rather than reusing a structure from previous projects.

Another pitfall to be aware of is the potential for the entire team to become disjointed. If the project manager isn’t careful, communication between leaders can fall apart. When this happens, collaboration comes to a screeching halt, and team members start stepping on each other’s toes.

How to Improve Team Collaboration

Improving team collaboration is easier said than done, and assuming that perfect collaboration happens all on its own is a big mistake. Successful team collaboration is the culmination of thoughtful strategies and adapting to challenges. If you’re asking yourself where to start, consider these three tips.

Choose the Right Type of Project Organizational Structure: We’ve talked about the inner workings and benefits of a project team structure, but that doesn’t mean it’s the right fit for every team or project. In fact, if collaboration becomes a big issue, it may be time to take a step back and consider restructuring. There is no “golden” organizational structure that works perfectly, one hundred percent of the time.
Create a Communication Plan: One of the first steps toward improving collaboration is getting everyone on the same page. Within a project team structure, this means making sure different teams all have the same information to work with and know exactly how to communicate with one another to ask questions, express ideas, etc. When this is the case, and the project is made up of various teams and team leaders, a plan for communication lets everyone know exactly how to work together.
Choose Smart Team Management Solutions: Teams are growing every day, but that doesn’t mean we all go to the same office. Team management tools wre created to empower the modern team—made up of individuals in different departments, or even different time zones. Because of this evolution, we need technology that makes collaboration and communication easier than ever. Team management tools create a digital space for everyone to collaborate and see what others are working on.

SYSTEMX BUSINESS MANAGEMENT PLATFFORM Makes your Project Team Better

SystemX offers the smartest team management solutions around, connecting everyone on the team, improving collaboration and cutting down on confusion. Every aspect of our project management software was built with project teams in mind, and we’ve made it easy to collaborate on any and everything you need, like tasks, Gantt charts and more.

Need to know the right person to ask a question? Use the Team page to see what everyone on your team is working on and who might have the answer. And when you’re building a new team for a project, see a roster or individuals broken down into departments or filter individuals by certain skills.