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Structuring Your Consulting Company

By Consulting Success
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Setting up a consulting business is much like starting any company. There are administrative, structure, regulatory and legislative issues to address.

One of the very first you will need to address is the structure of your business. Choosing the right form can save a lot of time and hassle down the line!

Sole Proprietorship

There are many types of ownership for your consulting business. The first, simplest, and least difficult to set up is a sole proprietorship.

In a sole proprietorship, you are the only owner of the business. Your assets, and liabilities, and the assets and liabilities or the business are indistinguishable by law.

The pros of a sole proprietorship: cheap to set up, and virtually no paperwork whatsoever!

The cons? If you, or the business, get into financial difficulty, you run the risk of losing everything!


Similar to a sole proprietorship, in that there is usually very little in terms of paperwork, aside from the partnership agreement, required to set them up; they share similar pros and cons.

A partnership is an agreement between two or more people to start a business, and the partnership agreement sets out the ownership percentages, rights and responsibilities.


Corporations are separate legal entities, set up when one or more people start a business, to become a separate legal person.

A corporation owns it’s own assets, and has its own liabilities. It affords the owner(s) some protection in the event of financial difficulties, and vice versa.

Corporations can also list on stock exchanges, be publicly traded, and have many owners, or shareholders.

It is possible to start your consulting business using one of the cheaper and easier forms of business, and change the structure later on.

Organizational Structure

No matter what type of legal entity your consulting business will be, you will have an internal organizational structure.

Deciding what your style is can help when you take on employees.

Organizational structures these days range from the traditional, conservative hierarchies, to looser, less formal arrangements, and everything in between.

It is impossible to say which structure will be right for your business, as it depends largely on your personality, and what you are comfortable with, as well as, to some extent, the industry you are involved in.

Certain fields, such as law, have firmly entrenched standards and traditions, which may be harder to break free from, while other fields, like marketing consulting, have more leeway and scope for flexibility within an organization.

At the end of the day though, it is up to you, the consulting business owner, to decide on your organizational structure, and, as with most things in business, nothings written in stone, so do not be afraid to change things as you go along!

Staffing Issues

One of the last issues you will want to think about when starting a new consulting business is how you will address staffing when the time comes.

Perhaps you are more comfortable with full time, or even part time employees. Maybe you like the idea of sub contractors, or maybe you fall somewhere in between.

Again, go with your gut, and review and change as you go along.

Evolution, in your consulting company, as in life, is key to staying on top of your game. Try things out, and change them to suit your unique business.

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