12 Things No-One Tells You About Setting Up A Consultancy Practice

If you're just getting started, what are some of the lessons it would help to know as soon as possible?

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Someone recently asked me what newcomers might not know about consulting.

Here are the 12 things which came to mind:

1. Your niche is almost certainly too big. Your niche will determine most of your success. The smaller your niche, the more successful you will be. I’m not worried about new consultants entering my field and competing directly with us. I am worried about consultants zeroing in on small niches and slicing them away from us (see: 6 Rules For Picking A Niche Where You Can Thrive).

2. You will always have too much work or too little. It’s been 15 years now and there’s never been a time to just relax. The workload always feels like it’s too high and I’m struggling to manage it - or it’s too low and I’m worried about where the next project will come from (see: How Much I Earned In My First Five Years).

3. You will waste a lot of time creating proposals people won’t respond to. You will get frustrated with how frequently someone asks you for a proposal, participates in a few calls, and then vanishes forever when you send the proposal through. This can grind you down or persuade you to set up systems which may do more harm than good (see: Why Prospective Clients Go Quiet And What You Can Do About It).

4. You will spend too much time impressing peers (and not enough time impressing prospects). You will fall into the trap of creating content which impresses your peers but won’t attract new clients. The content which attracts clients is niche content which shows how they can solve six-figure problems. It won’t be popular with the masses. (see: Become The Top Expert On A Big, Expensive, Problem).

5. Your years of experience don’t matter as much as you think. No one cares how much experience you have by quantity. What does matter is the diversity of experience and how you can translate that into specific benefits for a client. What can you do with fifteen years of experience vs. someone with five years of experience? (See: What Experience Do You Need To Be A Consultant).

6. You will slowly realise other consultants are fibbing. At first, you will wonder why other consultants are so much more successful than you. Later you will realise most are fibbing about how successful they are. Pay attention to the number of new case studies and testimonials on their site - not how busy they claim to be (see: Most Consultants Haven’t Worked For The Brands Featured On Their Websites).

7. You will need to improve your design skills. How deliverables look matters a lot. People will evaluate the quality of what you create by how well-designed it is. Everything you produce will sooner or later have to be at a professional standard. This includes your proposal, the drafts you send through, and the final deliverables themselves. (see: Consultant-Quality Design Doesn’t Cost As Much As You Think).

8. You need to be able to show your past results. It’s easy to create opinion-related content to grow awareness of your brand. But awareness only takes you so far. What happens when people ask for proof of your past work? You need case studies or powerful testimonials showing the clear results of your work. If you can’t show results from past projects - it’s hard to get results from future projects. Invest a lot of time in this area (see: How We Capture And Display Testimonials).

9. You only need the right 100 people to trust you to thrive. If 100 senior leaders at key organisations you want to work with know who you are, trust you to do great work, and feel you can help them, that’s all you will ever need. It’s not 1000 true fans at the independent level, it’s 100 strong connections. The purpose of your promotion isn’t to build a huge following - but to get on the radar of the right 100 people. Having coffee with the right person is better than speaking to a room full of the wrong people. (See: Relationships and Distribution As The Key To Success).

10. Building a sustainable client base will take years. If you’re starting from scratch, you should recognise that it will take years to build a sustainable base of clients - not months. But, gradually, if you’re creating great content, engaging with the right people, and speaking at the right events you will become the go-to person to contact when people need support (See: What Separates Success From The Rest?).

11. You need to significantly invest in yourself. You need to spend money to make money. Saving money in the short run will usually cost you in the long run. Every business incurs startup costs and you should be willing to spend $5k to $15k to get started as a consultant. Get high-quality design templates, legal services, and spend money on sponsorship or ads to promote yourself. You need to take training courses and constantly upgrade your skillset (See: The Five Skills You Should Develop To Build A Thriving Consultancy Practice).

12. Your client relationship skills need to get a lot better. I suspect most people think their client relationship skills are much better than they truly are. The more time you spend consulting you more you hone your ability to listen, understand what the client isn’t saying, and figure out the dynamics within different teams. You will gradually figure out how to build a rapport and build trusting, honest, relationships (See: Constant Clarification and Stakeholder Engagement).

Now it’s your turn - what are some of the lessons you didn’t know before you began your consulting journey?

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Richard Millington