If you want to run your own consulting business, there are some essential steps you need to take before getting started. Running a business is a full-time job with no set hours, so setting off without the right preparation could lead to more stress down the line. 

To help you get the best possible start, prepare yourself with this checklist for starting a consulting business:

  • Decide what kind of consulting to focus on
  • Write a business
  • Choose a business name
  • Register your business
  • Get insured
  • Promote your consulting business
  • Open a business current account with accounting software

Decide what kind of consulting to focus on

The term consultant can cover a lot of different things. Narrowing your focus will help direct you toward the kind of work you want to do and better target our marketing strategy to find the right clients. 

Broadly speaking, consulting can be separated into five different categories:

  • Strategic consulting
  • Management consulting
  • Operations consulting
  • Financial consulting
  • IT consulting
  • Human resource consulting

You’ll know better than anybody where your strengths and weaknesses are, so let those guide your decisions when figuring out where to focus. 

Write a business plan

A business plan is a kind of mini-checklist all on its own, but it’s also a vital roadmap that outlines your strategy and resources. Most business plans are made up of these different parts:

  • Executive summary
  • Company description
  • Competitor and market analysis
  • Details of organisation and management
  • Breakdown of products and services
  • Marketing and sales
  • Funding requests and financial projections

For a more detailed explanation of each of these parts, try our other article, “What should a business plan include?

Choose a name

Choosing a business name is a big decision. It will have a massive impact on how the public perceives your business. And on top of that, there are legal matters to consider. 

When faced with limitless possibilities, choosing a name may seem a little daunting. So here are some general guidelines to follow when picking out a name for your business:

Avoid difficult spellings

A surefire way to limit your customer reach is by making your business name too complicated to find on a search engine. 

To clarify, incorrect spellings are fine. In fact, it could make help your name seem quirky and interesting like Reddit, Flickr, and Tumblr. 

Say it out loud

Some things read better than they sound out loud. Worse still, some names are near impossible to pronounce consistently. 

If you like the look of a name on paper, say it out loud in some different contexts and see how it feels. Ask yourself, does it roll off the tongue, is it easily recognised, and does it sound similar to something you’d rather not be associated with?

Finally, show the written name to different people to see how they pronounce it instinctively. 

Don’t limit yourself

Your business name should indicate what your business does, but you don’t want to be so specific that it holds you back in other areas. 

For example, you may start as a management consultant business and choose a name that references management. But what if you want to move into different areas a few years down the line? With a name so specific, you could be making it difficult to expand. 

Research the name before you decide

As a small business owner, you can call your business whatever you like. But it’s always a good idea to see how that name is being used elsewhere. 

First, do a thorough internet search. The name, or ones similar to it, might already be in use, making it more difficult for people to find you and confusing when it comes to branding. 

Next, use the HMRC database to check if the name is already a registered trademark. Again, you generally don’t want the same name as another business. 

But practically speaking, two limited companies can’t have the same registered name. So, while you may set up as a sole trader, you won’t be able to use the same name if you decide to become a limited company later on. 

You can check registered trademarks and apply for your own on the HMRC website

Make sure you like it

At the end of the day, it’s your consulting business, and you’ll hopefully be running it for a long time. So make sure you choose a name that you actually like yourself. After all, you’ll be hearing it a lot over the years. 

Register your business

If you operate as a sole trader, register as self-employed with HMRC to pay income tax on your taxable income:

  • Personal Allowance: Up to £12,570 (0%)
  • Basic rate: £12,571 to £50,270 (20%)
  • Higher rate: £50,271 to £150,000 (40%)
  • Additional rate: over £150,000 (45%)

If you set up as a limited company, you need to register with HMRC as an employer. Rather than income tax, limited companies pay corporation tax (19%) on all of their taxable income.

You also have the option of setting up a limited company and registering as an employee or contractor. If you do, you need to sign yourself up to PAYE as an employee of your business. 

Get insured

You might not have any other employees, but even if you hire short-term contractors or freelancers, you’re legally required to take out employers’ liability insurance. It covers the legal fees and compensation if an employee is injured or made ill because of their work. 

Everything else is optional, but it’s probably a good idea to look into these policies:

  • Public liability insurance.
  • Product liability insurance.
  • Professional indemnity insurance.
  • Business interruption insurance.
  • Business property coverage.

Promote your consulting business

The final stage of your checklist is figuring out how you’ll find clients. 

You can always start with friends, family members, and acquaintances to get the ball rolling, but eventually, you’ll need to reach a broader customer base by using these strategies:

  • Build a website for your business. 
  • Create business profiles on social media. 
  • Use professional contacts from your past. 
  • Attend or host consulting networking events. 
  • Sign up for freelancing websites. 

For a more detailed explanation of each of these promotional strategies, check out our other article, “How to promote your consulting business.”

Open a business current account with accounting software

When running a business, it’s important to keep your personal and business finances separate from day one. 

You need to have a clear picture of your business’ financial health, be able to track income and spending, and record expenses for tax returns, all of which is much more difficult if your personal expenses are mixed in. That’s why thousands of business owners use the Countingup app to make their financial admin easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here and start your three month free trial today.