Starting a consulting business is something to consider if you have a lot of knowledge or expertise in a certain field and you feel it’s time to branch off on your own.
Consider this the article to get you moving – we’ll be covering why it’s a good idea to become a consultant, pros and cons, costs and what you need to start up. We’ll have input from Angela Hodgson, founder of Ignite Improvement Ltd, throughout.
- What kind of consultant can I be?
- Why start a consulting business?
- Pros and cons
- What skills, qualifications and insurance do I need?
- What kind of start-up costs should I expect?
- How much should I charge?
- Contract essentials
- How do I market a consulting business?
What kind of consultant can I be?
It’s best to be a consultant in whatever you have specialised experience in, be that a long career or notable recognition/awards.
Popular fields ripe for a niche business include (but are by no means limited to):
- Marketing
- Finance
- Tech
- Human resources
From there, as with any business, establish your unique selling point (USP). What strengths do you have over your competitors and what unique business experience or services do you have to offer? It also helpful at this point to establish who your target audience is – that could be individuals, other small businesses, corporates or a combination of the three.
See also: Three tests to measure the strength of your USP – Getting your USP right is critical to business success. In this piece, we look at three tests businesses can use to trial and develop their USP
Why start a consulting business?
A lot of freelance consultants value the time and autonomy that comes with having their own consultancy business. They also enjoy getting stuck into the work that really excites them, as Angela Hodgson explains: “For many professionals, consulting offers autonomy, variety and the chance to monetise deep experience. It can be highly rewarding if you enjoy problem-solving, working closely with clients and taking responsibility for your own pipeline.”
Pros and cons
Sometimes it’s just easier to see the good and bad at a glance to get an overview of this decision.
Pros
- Freedom
- Flexibility
- Variety
- Choosing the work that you want to take on
- The opportunity to expand your skills
- Travel opportunities
As we touched on in the first section, the allure of being your own boss is what pulls people into going self-employed. You can set your hours, set your task and set your own goals, rather than being beholden to your employer’s metrics.
“The main advantages [of starting a consulting business] include low start-up costs, control over how and when you work and the potential to scale income through reputation rather than headcount,” said Hodgson. “Consultants also gain exposure to multiple industries and leadership teams, which accelerates learning and impact.”
Cons
- Inconsistent income, especially in the early days
- Loneliness
- Wearing all of the hats
- Work-life balance
- Competitive
As with starting out on your own in any field, loneliness, overwhelm and shaky income should be factored into your decision. The good news is that networking and the wealth of information you can find online will guide you through the initial bumpy stages.
“Drawbacks include inconsistent income at the start, isolation compared to employed roles and the need to constantly balance delivery with sales, marketing and administration. There is also no safety net. If you don’t sell, you don’t earn,” Hodgson told Small Business.
What skills, qualifications and insurance do I need?
The advantage you’re likely to have, over those coming from a different field or starting from zero, is that you’ll have a lot of the skill and experience you need already.
It’ll serve you well to learn and develop the skills that you’ll need as a consultant. Basic business skills such as budgeting, training groups of people and public speaking are often helpful. Sales and marketing are essential, too. In some cases, you can learn through online courses and YouTube videos, whereas for others you might want more focused tutoring.
Knowing yourself and your customers is the most important aspect here. In some cases, you might not even need extra qualifications, as Hodgson explains: “Formal qualifications can help, but experience and results matter more. I have a Post Graduate Diploma in Business Improvement, but this qualification hasn’t gained me business. It’s my results and client testimonials that win the contracts.
“Strong consulting businesses are built on credibility, communication and commercial awareness, not just technical expertise. Being able to diagnose problems, challenge clients constructively and translate insight into action is critical,” she added.
As for insurance, professional indemnity is the first one to go for. This will protect you in the event that you do a less-than-bang-up-job or dish out bad advice, covering legal costs along with other damages.
Depending on what kind of work you do, you might want public liability insurance, covering for any damage done to the public/clients and their property when you’re working.
If you’re predominantly online and hold a lot of customers’ data, a cyber policy is a must. You’ll be protected against hacking, data breaches and cyberattacks.
Other types of cover you might want to consider are business interruption, personal accident insurance and equipment insurance to cover the kit you use for the business.
See also: Business insurance: Everything you need to know – Insurance offers vital protection from the crippling costs of a claim against your business. But which insurance do you actually need and which is merely optional?
What kind of start-up costs should I expect?
You’ll be relieved to discover that start-costs are low, especially when you compare them to other businesses. Figures from Countingup suggest that you could start a consulting business for as little as £500.
For something more fleshed out, Hodgson suggests that it’ll be more costly than that. “Typical early costs include insurance, website, basic branding, accounting support, tools and platform access which is often a few thousand pounds rather than tens of thousands,” she said.
In summary, the costs to consider include:
- Insurance
- Website and domain
- Accountancy (accountant, accountancy software)
- Company registration
- Business bank account
- Marketing materials
- Card reader
- Any other software you might need
How much should I charge?
Give this one some thought as it could affect your ability to attract and build loyalty with clients. You can charge by hour, by project or on a retainer (if you have a client that you work with regularly or on an ongoing basis). If you want to charge hourly, for example, start by taking the average salary for the equivalent employed position and then put it into an hourly salary converter.
The sum you charge will depend on factors such as how much experience you have, what services you offer, how flexible you can be and what local competition is like.
Contract essentials
On a similar note, set out your contract terms early. It could well be worth getting a solicitor involved here until you get a feel for it. Establish whether you’ll be compensated based on time or deliverables. Be clear about any services being provided and deadlines that need to be taken into account. Finally, include any other implications, like check-ins with the client or any other regulations you need to abide by.
How do I market a consulting business?
For person-centric businesses, word of mouth is still crucial, even in the digital age. Make yourself known on social media and, if you provide services in your local area, through local noticeboards.
“Most early traction comes from reputation, referrals and visibility,” said Hodgson. “I’d recommend embracing PR early on to gain visibility and credibility in the market. Also investing time in building strong social media presence so your name and core offer becomes known and is often seen by your ideal clients. Networking and building trust through content are far more effective than paid ads in the early stages.”
She goes into more detail around how she rebranded her business.
Over the last year, I grew my consultancy from £100,000 to £300,000 in revenue, largely by being much more intentional about marketing, positioning and visibility.
Rebranding with purpose
Initially, my business branding was very ad hoc; a logo and colours I’d chosen myself and a name picked without much thought. I made a conscious decision to treat my brand as a strategic asset.
Before renaming the business, I defined my core values – energy, passion and momentum – and wanted a name I genuinely believed in. That process led to Ignite Improvement Ltd, which immediately felt aligned and credible.
I then invested in a professional graphic designer and ran a rebrand launch campaign on social media, which generated strong engagement and a noticeable increase in enquiries.
Making it easy for the right clients to engage
At the same time, I launched a new website and created clear landing pages for specific services, so potential clients could quickly understand what I did and how to work with me.
I also developed curated lead magnets based on real problems my ideal clients were facing, which helped move people from interest to conversation much faster.
Consistent, insight-led social media
I post on LinkedIn 3–5 times a week, combining practical insights from client work with personal observations and lessons learned.
I also run a weekly poll that poses a multiple-choice question (with a right and wrong answer).
Anyone who engages gets a follow-up message – not a sales pitch, but a conversation – which has been an effective way to nurture relationships without cold outreach.
Building credibility through PR and content
I only started working on PR in November 2025, but since then I’ve been featured in 10 publications.
I now have a media section on my website, which has significantly increased trust and inbound enquiries.
People regularly message me to say something I’ve written resonated or prompted them to get in touch.
Clear niche and positioning
Finally, I deliberately niched down, positioning myself as The High-Performing Team Specialist, focused specifically on manufacturing SMEs.
Being known for one thing, in one sector, has made referrals and word of mouth far more effective.
Overall, reputation came from clarity, consistency and usefulness, rather than large budgets or paid campaigns.
Read more
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