Need advice from experienced people on my consultancy start up idea

Discussion in 'Starting a Business' started by closeguy, Jul 30, 2011.

  1. closeguy

    closeguy
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    1. I am IT professional with no consultancy background, but I have done lot of reading on services provided by consultancy firms . I want to start my own business consultancy by hiring consultants as per my client's needs.

    2. Before renting office space, I am planning to take advice/knowledge from experienced people in consultancy field , about what business strategy I should have , rate structure used by consultancy firms etc. I will have these experienced people on my advisory board . (3-4 of them with diverse experience in different consultancy field , For example, CRM or Growth Strategy etc).

    3. Initially, I will rent office space and keep lady office receptionist/assistant to answer inquiry calls.

    4. Advertising/Marketing :
    (a) I will hire one or two marketing guys to visit companies and advertise our services.
    (b) I am in dilemma about advertising in newspaper since the rates of advertisement in leading newspapers are very high but at the same time I feel, it's the most effective medium for business since most of the CEOs/directors read these newspapers.
    (c) I will use experience of people on my advisory board to attract customers. ( With their consent of course)

    5. Once I get inquiry for the service, I will hire consultant/s .


    Challenges in front of me :
    1. Do you think my plan is feasible ? If no, why and what can I do to make it feasible?:cool:

    2. I cannot hire consultants who are working as a full time employee in some organization as my start up will not have enough business in the initial phase . So, I will have to look for consultants who are free but experienced. This is the biggest challenge. I may require a team , hence for one client I may require 2-3 consultants . Any idea/source from where can I get consultants who will work for me but not as a permanent employee of my company ?

    3.
    (a) Consultants may ask client to call them directly for next assignment. Is there I can do , so that, consultant should feel there are advantages working with me rather than direct assignment with the client ?? :rolleyes:
    (b)Experienced people on advisory board will charge higher amount as salary . What are the alternatives ?
    (c) Can you suggest any alternative(s) to advisory board to avoid salaries ?

    4. Any advertising strategy and how much percentage of cash available I should invest in advertising my business according to your opinion ?

    5. What can be done to avoid non payment by client ? And if client is simply postponing your payment, till how much time you should continue giving service ?:(
     
  2. Fergal

    Fergal
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    Welcome to Business Advice Forum closeguy, thanks for joining and posting your business questions. Your idea sounds very exciting and you obviously have big plans for your business, which is great.

    Are you planning on starting a general business consultancy or will your consultancy services be restricted to IT?

    You mention hiring office space, is this something you need to do from the beginning? Would it be possible for you to start the business from a home office and avoid the additional rental expense until you have the revenue and clients on board to provide you with the required cash flow?

    Hiring an advisory board would be great if you have the funding available for it, but it would be very expensive. Perhaps you have some contacts in your business or personal network who would be happy to be at the end of the phone for you and give you some advice and suggestions as and when you need them. If you could access some expertise in this way it would save you a lot of money.

    As regards hiring consultants / contractors, I'd suggest finding consultants who are currently self-employed but who are not working to full capacity. Agree a day rate with them and have them available to work on projects for you, as and when you get the business.

    You will need to have a contract drawn up that governs how you work with your clients and another one for the consultants you hire. The terms of both of these contracts could state that the consultant can only work with the client company, with your express permission and upon agreement of your fee. This would help protect you from a situation where consultants start working directly with your clients.

    If you are setting up a website for your business (I would recommend that you do) you could do a lot of online marketing through SEO and an advertising network such as Google Adwords. It's difficult to give a figure for what your advertising and promotion percentage should be. However, if I was to estimate this I would suggest that your total sales and advertising costs should be in the region of 10% of your annual revenue.

    For issues concerning non-payment and how much credit you give your clients, this is also something that your contracts should address. Have a look at what the standard credit terms are for the industry and take a view as to whether those terms could work for your business. Where possible you should also get clients to pay a proportion of their fees up front.

    I hope those suggestions help at least a little and I wish you every success with your business.
     
  3. closeguy

    closeguy
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    Reply from closeguy

    First of all thank you for encouraging reply and your help.

    General business consultancy with services like New product launch & marketing strategy, Business process improvement , Customer relationship management etc.

    I somehow feel , for an independent consultant, business from home is good option. But, the fact that you are consultancy company offering multiple services, and you don't have your own office space , may impact negatively . Clients may feel you don't have sufficient revenue and may think twice before giving you order.
    I stay in residential apartment and not in separate individual house. So, what I am thinking is I would hire small office space , so that for the namesake at least on business card or on website I can give office address. I think this expense is unavoidable. I would like to know your opinion.

    Good suggestion.


    Yes, SEO would help my site to come front in online search. But, advertising in leading newspaper will give me brand name & visibility to client base in my country. I would like suggestions for advertising strategy in newspapers.
     
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  4. Fergal

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    I can see your point about having an office address and yes I do believe that it is something that could impact on the professional reputation of your business. Other options that you could consider to help you reduce your start up costs, would be using something like a mail and telephone forwarding service. This would allow you to provide a business postal address to your clients, without incurring the expense. Saying all that, if you have the need for a receptionist / administrator having an office could work very well for you.

    Have you done any research into the applicability of newspaper advertising for a consultancy service? Personally I would have doubts as to how many businesses chose consultants by responding to newspaper ads. One very important source of business would be through networking and word of mouth. It would be important for you to be strongly associated with your industry and to meet potential clients by attending business networking events.
     
  5. allenadv

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    There are some tips to b remembered in consulting work. The business consulting firm helps the in planning and managing process of organization. They have to deliver practical, cost-effective solutions for their clients.
     
  6. HorizonPath.net

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    Hi Closeguy,

    Establishing a firm of diversified consultants can certainy work. I believe it serves a great purpose if built upon sustainable practices and the demand supports it in your area and demographics. I suggest to always keep a wide perspective in your value chain when planning. Consider the value and benefits to not only your company, but what will be valuable and attractive to consultants, and what are the attractable benefits to a company seeking consultation from your company as opposed to seeking consultants directly; and also what is the value for your employees, suppliers, and partners. Starting any new business requires an open mind capable of seeing the big picture and the detailed perspective at the same time. Key factors include great organization, efficient workflow, good policies and procedures, well done contracts, trust building factors, effective marketing, good human resources, and value effectiveness across all stakeholders. Many consultants (and small businesses) don't want to, or don't have the resources, to take on many of these tasks effectively. Or it's not their strong point or passion. And many companies don't have as much trust in consultants who don't have a professional and established front, even if they are very competent at what they do. Be sure that your role in this business is what you want to do, and what you feel passionate about! Surround yourself with people who love what they are doing. Consider that when successful five years ahead, will everyone be happy in their role and purpose in this business. Don't only consider that you can be financially successful, but strive for passion working every day at this company.

    Best wishes!
     

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