Starting a Consulting Practice

The most successful consultants solve a specific, painful problem for a defined audience. Instead of I do marketing consulting, say I help B2B SaaS companies increase trial-to-paid conversion through onboarding optimization. Specificity makes you referable, searchable, and premium-priced. Your niche should sit at the intersection of: skills you have deep expertise in (10+ years or equivalent intensity), problems companies pay good money to solve, and a market large enough to sustain your practice (at least 500-1,000 potential clients in your target segment).

Template: I help [target client] achieve [specific outcome] through [your approach or methodology]. Examples: I help e-commerce brands reduce return rates by 20-30% through product page optimization and sizing technology. I help Series A startups build their first sales team and close their first 50 enterprise deals. Test your positioning statement with 5-10 people in your target market. If they immediately understand what you do and can think of someone who needs it, your positioning is working.

Formula: target annual income plus business expenses (insurance, software, taxes), divided by billable hours per year. Most independent consultants bill 1,000-1,200 hours per year (not 2,080, because unbillable time includes sales, admin, professional development, and vacation). If you need 150,000 USD income and have 30,000 USD in expenses, your minimum hourly rate is 180,000 divided by 1,100 hours equals 164 USD per hour. Round up to 175 USD. This is your floor, not your target. Set your actual rate 20-30% above your floor to account for slow periods and non-billable work.

Hourly billing punishes efficiency (the faster you work, the less you earn) and creates client anxiety about the meter running. Project-based pricing (15,000 USD for a complete brand strategy) aligns your incentives with the client's and removes time-tracking friction. Retainer pricing (5,000 USD per month for ongoing strategic advisory, 20 hours of availability) provides predictable income for you and predictable costs for the client. Most successful consultants eventually move to value-based pricing: fees tied to the value of the outcome rather than the time spent delivering it.

Standard consultant payment terms: 50% deposit before work begins, 50% upon completion. For larger projects: 33% at signing, 33% at midpoint, 34% at completion. For retainers: full month paid in advance on the first of each month. Net-30 payment terms (client pays within 30 days of invoice) are acceptable for established clients but not for first engagements. Include late payment fees (1.5% per month) in your contract. The deposit requirement filters out non-serious clients and ensures you are never working for free on a project that might not pay.

Send a personal email or LinkedIn message to 50-100 contacts: I am launching a consulting practice focused on [niche]. I help [target clients] achieve [outcome]. If you know anyone dealing with [specific problem], I would appreciate an introduction. Be specific about who you help and what you solve. People cannot refer you if they do not know exactly what you do. Former employers, colleagues, industry contacts, and conference connections are your warmest leads. Most consultants land their first 3-5 clients entirely through their existing network.

Write 2-4 articles per month on LinkedIn, a personal blog, or industry publications demonstrating your expertise on the specific problem you solve. Share frameworks, case studies (anonymized from previous employer work), industry analysis, and actionable advice. Thought leadership content builds credibility and attracts clients who find you through search or social sharing. A single well-received article on LinkedIn can generate 5-10 inbound inquiries. Content marketing has a compounding effect: each piece adds to your searchable body of work over time.

A free strategy call serves as a sales conversation disguised as valuable advice. During the 30 minutes: ask about their current challenges (15 minutes), provide 1-2 actionable insights that demonstrate your expertise (10 minutes), and explain how your consulting engagement would address the full scope of their problem (5 minutes). This shows your thinking quality without giving away the full solution. Conversion rate from free strategy calls to paid engagements: 20-40% for well-targeted leads. Limit free calls to prospects who match your target client profile.

A professional proposal includes: executive summary (the problem and your proposed approach in 1 paragraph), scope of work (specific deliverables and activities), timeline (phases, milestones, and delivery dates), investment (fees and payment schedule), terms (cancellation policy, intellectual property, confidentiality), and about you (brief bio and relevant experience). Keep proposals under 5 pages. Send proposals within 48 hours of a discovery call while the conversation is fresh. Use a tool like PandaDoc (19 USD per month) or Better Proposals (19 USD per month) for professional-looking proposals with e-signature capability.

Essential contract clauses: scope of work (prevents scope creep), payment terms and schedule, confidentiality and NDA provisions, intellectual property ownership (typically the client owns deliverables, you retain your methodologies and frameworks), termination clause (30-day notice for either party), and limitation of liability. Have a lawyer review your template contract once (500-1,000 USD) and reuse it for every engagement with minor modifications. Never start work without a signed agreement. Verbal agreements lead to disputes about scope, payment, and ownership.

Exceeding expectations on your first 5-10 engagements builds the reputation that sustains a consulting practice long-term. After each engagement, ask two things: Would you be willing to provide a brief testimonial I can use on my website? and Do you know anyone else facing a similar challenge who might benefit from this type of work? A warm referral from a satisfied client is 10 times more likely to convert than a cold outreach. Three strong testimonials on your website provide the social proof that converts website visitors into strategy call bookings. This guide is informational only, not business or legal advice.