Are you a driven entrepreneur with substantive expertise in your industry? Are you looking to disrupt the business and policy consulting industry dominated by big firms by providing your evidence-driven solutions to partners?
A consulting business can help you achieve these goals and in this article, we’ll take you through the ins and outs of starting a consulting business in Australia.
Read along!
What is a Consulting Business
A consulting business comprises individual consultants who provide expert advice to clients. Consultants rely on a mix of qualitative and quantitative evidence to analyse, make an expert judgement, and then deliver actionable advice.
Consulting businesses may also work with other businesses to provide solutions to business problems or partner up with governments and NGOs to provide advice on implementing policies or social programs.
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How to Start a Consulting Business in Australia: The Pre-Steps
Before you register and begin operating your consulting business, you need to conduct comprehensive research on your target audience, competitors and create a strong business plan. Below we discuss some of the pre-steps that are crucial for your business to thrive:
- Create a business plan
If you are wondering what you need to start a consulting business, your starting point should be a good business plan. Before registering your business, you will need to create a plan for your business. This will involve research on your competitors, target audience, business structure and business name.
- Business name: You will need a business name in order to apply for an Australian Business Number (ABN).
- Competitor analysis: Your business plan should have research on your potential competitors, their strengths and weaknesses. Consulting is a competitive industry with big companies dominating a large part of it. That does not mean that a small boutique consultancy cannot thrive. However, that requires a landscape review of your competitors and the services they offer.
- Target audience: Your target audience is individuals likely to be interested in your products and services. Your business plan should outline your target audience based on your research. You can also decide to focus on one type of audience. For instance, you can choose to work only with corporations, only with governments or only with NGOs.
- Business structure:
You will need to decide the type of business you want to establish. Is your company a sole proprietorship, a partnership or a company?
- A sole trader is someone who owns and operates a business under their personal name.
- A partnership is when two or more people come together to form a business.
- A company has a complex structure and can legally sue and be sued. In other words, it is a legal entity in itself. Companies are incorporated under the Corporations Act 2001 (Cth) and are governed by the Australian Securities and Investments Commission (ASIC).
Your business structure can have a strong impact on your business finances and long-term success. Therefore, you should do your research before making a decision.
- Business structure and goals
Generally, new businesses will take the form of a sole trader, partnership or company. How your business is structured will impact how you take on debt, distribute profits and pay taxes.
You should also consider the size of the company and how (or whether) you will employ people. Contemplate forming company policies, employment contracts and a business model to structure your enterprise. Having both a legal framework, as well as a clear goal for your business, will provide a strong foundation for your business.
- Finding your niche
Consultancy businesses provide expert advice on a range of issues which could help businesses, organisations and governments make sound decisions rooted in evidence. Since it is a competitive business environment, you can establish a niche or a specific topic area that is your speciality.
This could help you gain stable clients from a specific sector. For instance, you could provide consultancy services only to governments on poverty issues. Or, you could target only Food & Beverage businesses in helping them improve their business outcomes.
- Financing
If you are the sole consultant in your business, you might not have very high costs. However, as you grow and take on more projects, you will require funding to execute your research tasks.
For instance, if you need to do a large-scale survey to gather evidence, you will need to cover those costs yourself before the client pays for your final service. You can finance your consultancy with grants or loans.
You can also raise money from investors. This way you will avoid a lot of the issues associated with debt. The issue here, however, will be that you relinquish some of your power and funds to your investors.
- Registering your business
To operate within Australia, you will first need to register for an Australian Business Number (ABN). This number is what the government uses to identify your business, and is important for processes like tax and invoicing.
You will likely also want to register a business name. It’s important to stand out from the crowd where you can.
- Insurances
Insurance is the most important step when setting up your business. It is imperative that you protect yourself and your business from any legal action. Firstly, you will need a type of public liability insurance, this will be beneficial for you and your business if any of your staff experiences injuries on the field or otherwise.
Public liability insurance from insurance companies such as BizCover can help you protect your property and your employees from injury.
- Intellectual Property
You can protect your cutting-edge research methods and visualisations from competitors using the copyright on all your material. This can outline who can use your work and under what conditions.
- Hiring Employees
Unless you are the sole consultant providing advisory services to your clients, you will need to hire other consultants to conduct a range of tasks–from finding new clients, conducting research and devising strong communication material to get your point across. You can hire casual, part-time or full-time employees:
- Part-time employees: Part-time employees generally work for less than 38 hours a week. They can still receive some employment benefits, such as sick leaves or annual leaves, on a pro-rata basis.
- Full-time employees: Full-time employees work consistently for fixed pay, subject to change on employer discretion. Generally, full-time employees receive a wide variety of employment benefits such as sick leaves, health insurance, etc.
- Independent Contractors: Independent contractors are freelancers or individuals who offer their services for a fixed period of time to a company for a fixed price.
Here is a webinar on how to hire the right employees for your business.
Marketing Your Business
There are a few ways you can use it to attract more customers to your business. For example:
- Social networking: You can use social media applications such as Facebook and Twitter to connect with your target audience and advertise your services.
- Advertising: You can also use print media to run advertisements about your business. This can often be expensive as you will need to produce an ad before it can be aired on television. Print advertisements could be a cheaper option.
- Online marketing: Once you set up your business, you should also create a website with your branding. You can run ads directing potential customers to your website and generate interest in your business through Google ads, Facebook ads, etc.
- Word of mouth: The best way to connect with your clients is through word of mouth. Attending networking events and conferences can put you in a room with like-minded people. Talking to people around you to tell them about your business, discussing it with potential partners, etc. could be a good way to reach your target audience.
- Newsletters: You can also reach your audience via newsletters or emails. But you should be aware of the Spam Act 2003 (Cth) that deals with electronic communications with customers.
Consulting and the Law
As a consulting business, you will need to ensure you are aware of your legal obligations and legal risks. Here are some of the legal considerations you should make while setting up your business.
- Licence: All consulting businesses do not require a consulting business licence. However, if you wish to provide expert advice in certain industries, such as law or real estate, you will require a legal degree and a real-estate licence respectively.
- Employment contracts: You will need to draw up employment contracts, non-disclosure agreements and other employee documents for new hires to work in your consultancy business.
- Workplace health and safety (WHS) regulations: Your business must comply with workplace health and safety standards.
- Consultancy agreement: A consultancy agreement can outline roles and expectations from all parties involved, your liability for the advice you provide, monetary terms of your service as well as copyright and/or trademark associated with the deliverables you provide to your client.
- Trademark and copyright: You can apply copyright to your work to ensure competitors cannot use it without your permission. Trademark also provides exclusive rights to a product to a person.
How Lawpath can help
Setting up a consulting business in Australia can be a time-consuming job. Considering that you can be held liable for the expert advice you provide, without proper protections, it can be a high-risk job. Therefore, you should consult a lawyer before starting your own consulting business. Lawpath can help you hire an expert lawyer!
Get a fixed-fee quote from Australia's largest lawyer marketplace.
Frequently Asked Questions(FAQs)
- Do I need a licence to be a consultant in Australia?
You might need a licence to be a consultant in some industries. For instance, to be a real-estate consultant, a real-estate licence is preferred. To practise as a legal consultant, you need a law degree.
- How do I start my own consultancy in Australia?
You can start by building your own business plan which will include competitor and audience research, financing options, etc. You will then need to showcase your work and expertise to build a client base. In order to do so, you need to market your services and your prior work to potential clients.
- How much money do you need to start a consulting business?
Starting a consulting business can be fairly cheap if the client is willing to finance any research projects you undertake as a part of the project.
- How do I start a private consulting business?
You can start a private consulting business by registering your business and starting to provide your consulting services to clients.
- Can I start a consulting business?
If you are an industry leader or have substantial expertise in your sector, you can consider starting a consulting business.
