There are a few things you cannot get away from, no matter what business you are in including the consulting business, finances and management are two of them.
Some Financial Issues You Will Face
First and foremost, you will need startup capital. Something to get you going, and keep you going, during the first few slow months.
Startup capital can come from a few places: savings, equity in your mortgage, a loan from a friend or family member, conventional bank financing, or venture capital.
Choosing the right option will depend on your personal circumstances, business plan, and startup requirements.
The good news is, as a service based business, a consulting firm is low cost to start, and you are able to “bootstrap” the business into being relatively easily!
Financial planning and management do not end there though. You will constantly need to review your pricing structures and fees, maintain records and reporting processes, and monitor and address any debts you may run up.
If finance is not your forte, the best advice will be to outsource to a reliable bookkeeper and accountant, to make sure you maintain your finances correctly, and keep you out of trouble in terms of taxes!
By choosing this route, and establishing your role in the financial management of your consulting business early on, with their help, you should have less to worry about on the money front!
No matter what size your consulting business is, there will be management issues that you will need to address from time to time.
While you may not initially have staff to pay, you will need to keep track of procurement, deal with clients, sourcing suppliers and subcontractors, and eventually, hiring and managing staff.
Neglecting these issues is a tempting prospect, but they will not go away – they will just keep building up until you address them, so keep a hand on them.
A simple way to do this is to put management procedures in place from day one. Develop systems for everything, put processes in place, and create whatever systems and paperwork you will need. Keep reviewing, changing and adding to these as you go along, and remember: filing is never fun, but it is important!
Once your practice grows, you will be able to hire managers to take care of issues like business management, human resources or procurement, but then, on the other side of the coin, you will need to learn to let go, delegate and try not to micromanage.
If you have never been involved in managing a business, it may be a good idea to do some research before you launch, or even to take a course in basic business management and administration.
Learning on the fly can be tricky when trying to juggle the trial and error nature of the beast, and the all-consuming hard work of getting a new business off the ground.
Whichever way you choose to put management systems in place though, and however tedious it may seem at the time, remember that good management is often the difference between success and failure of a consulting firm or practice. Take some time and make sure to take care of this aspect of your business!