Are you looking to set up a consulting business? If so, you will have to consider several costs when setting up. Some factors might be more or less relevant to you, depending on your business plan. 

In this article, we’re going to go through some of the main costs when starting a consulting business: 

  • Type of consulting firm
  • Required licenses
  • Location
  • Property 
  • Tools and equipment
  • Compliance
  • Accounting
  • Marketing
  • Business insurance
  • Travel and other expenses

Type of consulting firm

The first significant cost of setting up a consulting firm in the UK comes from deciding which industry will be best suited for you. There are several different sectors you can choose from, including:

  • Business
  • Hotel and hospitality
  • Financial services
  • Healthcare
  • Human resources
  • Marketing
  • Legal
  • Management
  • Architecture
  • Engineering

In addition to these sectors, there are more specific businesses or people that you could consult for within these sectors, such as:

  • Marketing – business to business
  • Human resources – recruiting for tech companies
  • Architecture – property development companies

Whichever sector you pick will impact set-up costs. Your choice might also depend on your background and your level of expertise in the subject. 

Required licenses

When you become self-employed in the UK, you need to notify HMRC (HM Revenue and Customs) within the first three months of opening your business. They also offer helpful support and guides to help you to get your enterprise started. It only costs £12 to register your business online. 

Location

Another deciding factor when it comes to the cost of setting up your consulting firm is your choice of location. For example, will your firm be based in the centre of a small town? Or will you want to be in a big city with plenty of people as potential clients? 

Setting up a consulting firm in central London will come with a heftier price tag than in a small town on the outskirts. Or maybe you could set your firm up in a business park instead of a busy high street if you want to keep costs lower, especially at the start. 

The average rent for a commercial property in London’s West End is £14,355 per square meter, meanwhile, in Cardiff, it is significantly less at £1,030.  

The final option is to go fully remote, conducting all your business online from your home. There are a lot of advantages and disadvantages to this. Being fully remote, you could reach more clients online, but you might never meet them face to face. Read more information on building a remote business here.

Property 

If you’re not growing your business from home, you need to either buy, rent, lease or build your office facility from scratch. If you’re renting or leasing a property, then there is only so much you can change about it. However, it would probably be a lot easier and less time consuming than buying a property to construct your own office space in. 

Tools and equipment

Tools and equipment are another considerable upfront cost. You will have to decide what equipment you need to get your consulting business up and running. For example, will you need to fully set up a workspace, buy a new computer, stationery and other items? Some examples include (prices may vary depending on your budget):

  • Laptop: £300+
  • Desk: £50+
  • Chair: £30+
  • Headphones: £15+
  • Office 365 membership or Google Suite: £8 per month or free
  • Printer: £50+ 
  • Buying a domain and setting up a website: £75+

So those items are the essentials.  You could start with these and set up a relatively decent office for less than £500.

Business current account

When setting up your own consulting business, you will need to open a business current account. Setting up a business account is vital for anyone setting up a new business because it is separate from you. If you’re a sole trader, it’s not a legal requirement, but it helps to stay organised and avoid confusion between business and personal expenses. 

You can learn more about setting up a business account here. If you decide to open a business current account with Countingup, you will receive 3 months for free. 

Compliance

There are many government regulations when setting up a business; you will have to make sure that you comply with the following:  

  • GDPR (Data Protection)
  • Financial regulations
  • Health and safety
  • Contracts and agreements with third parties
  • Permits, licenses and permissions

You can get a complete checklist of compliance tasks on the UK Government website. If you wish to hire a solicitor to help you with compliance, it will cost anything ranging from £120 – £450. 

Accounting

Keeping track of your finances is crucial to running your business, but doesn’t have to be complicated. You will need to keep track of:

  • Sales
  • Invoices
  • Costs 
  • Taxes

Countingup, the two in one business current account and accounting app, automates time-consuming bookkeeping processes to help small business owners save time. Learn more about setting up a free account here. If you would like to hire an accountant then it will cost you £35 per hour for a basic service and up to £150 per hour for more complex services. 

Marketing

No matter how good your service is, you will still need to invest in marketing. It can be a costly expense for businesses, especially at the start, but it has to be considered. You will need to let people know your business exists and they need to know what it offers. Fortunately, you can set up a business website relatively cheaply and set up social pages for free. A little bit of marketing can go a long way. At the start, you could focus on:

  • Optimising your website
  • Getting set up on Google My Business
  • Social media content
  • Consider allocating a small budget for paid ads

In the early days of establishing your new consulting firm, you may struggle to attract customers, so you can’t afford to neglect marketing completely.  

If you wanted to work with an agency, you could outsource your marketing for approximately £500 – £1.000 per month, depending on the services you need. 

Business insurance

Most businesses will need insurance from the first day. Without it, you could face massive losses if anything goes wrong. Business insurance doesn’t have to break the bank, but you should choose the one best suited for your business. On average, the cost of insurance for a business in the UK ranges from £50 to £500. The main ones to consider are:

Different ones cover property and equipment. No matter what your requirements are, there should be an insurance policy tailored for you. Countingup’s partner, Superscript, offers a wide range of business insurance packages suitable for small businesses.

Travel and other expenses

When setting up your business, you might need to travel to sales meetings or to visit clients. It’s important to factor this into your business expenses because you can get tax back on these if you have kept track of them. You will also have to decide if you want to:

  • Use your personal vehicle as a commercial vehicle
  • Rent or buy a commercial vehicle
  • Use public transport (if you’re cutting costs or don’t need to travel far) 

Check out our article on reclaiming tax for the self-employed

Save time and focus on what matters with Countingup

Launching a new business takes time and effort – so don’t let bookkeeping admin steal time away from doing what you love. The Countingup app will help you save on the time and stress of maintaining well-organised financial records.

Countingup is the business current account and accounting software in one app. It helps you to automate your business’ financial admin and keep on top of your bookkeeping easily. This will let you focus on other aspects of setting up your consulting business.

Get paid faster with instant invoicing and make sure your accounts are always accurate with instant invoicing, automatic expense categorisation and receipt capture prompts. 

Find out more here and sign up for free today.