PDF Summary:Start And Grow Your Own Consulting Business From Zero, by Matthew Robson

Starting a consulting business may seem like a daunting task, but the digital age has made it easier than ever to reach potential clients and offer valuable services. In Start And Grow Your Own Consulting Business From Zero, Matthew Robson walks you through the process of building a consulting firm from the ground up. You'll learn how to develop a mission statement that guides your business, identify what sets you apart from competitors, and choose the right legal structure for your enterprise.

Robson covers strategies for acquiring and converting clients, including how to generate leads through a strong online presence and how to craft proposals that emphasize client benefits. He also explains how to manage your finances, maintain strong client relationships, and scale your business over time. Whether you're launching a home-based consultancy or planning for long-term growth, this guide offers practical steps for building a sustainable consulting practice.

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(Shortform note: While starting a home-based business can save you money, it can also expose you to legal and financial risks. In Legal Guide for Starting & Running a Small Business, Fred S. Steingold warns that standard homeowner’s insurance policies often exclude or severely limit coverage for business-related injuries and property damage. This means that if a client, delivery person, or other visitor is injured on your property in connection with your business, you could be personally responsible for the full amount of the claim. Steingold explains that this liability can extend to your personal assets, including your house, car, and savings.)

Reserving funds is vital for expanding your business. By reinvesting your earnings in the business, you'll enhance its value, as opposed to using the profits for extravagant purchases. Eventually, reinvesting earnings may let you hire contractors. This yields a strong return on investment since it frees up more of your time for important tasks while they handle lower-priority duties that were consuming your schedule. You might also invest financially in the business by implementing methods and structures to automate the consulting firm. Anything that simplifies and speeds up processes gives you more time to focus on your strengths.

(Shortform note: Reinvesting in your business to hire contractors and automate your consulting firm can be beneficial, but it also comes with risks. The Internal Revenue Service (IRS) warns that misclassifying employees as independent contractors can lead to significant back taxes and penalties. If you hire contractors who work exclusively for your business, follow your schedule, and use your equipment, the IRS may reclassify them as employees. This could result in you owing back taxes, Social Security, and Medicare contributions for those workers. To avoid these issues, ensure that any contractors you hire maintain their independence and work for multiple clients.)

Having a mentality focused on development and continuous goal-setting necessitates dedicating resources like effort, finances, and vigor. You might choose to author a book, develop a course, learn new skills, and hire additional team members; all of these actions are investments in expanding your company. You could put money back into your business by investing in consultations with experts who have thriving companies, allowing you to gain their insights and strategies. Reinvesting in marketing will yield a positive ROI by attracting more clients to your consulting firm.

(Shortform note: If you have limited resources, you may have to choose between these options. To decide, consider which of these options will most directly address the biggest bottleneck in your consulting firm. For example, if you’re struggling to find clients, reinvesting in marketing may be the best option. If you’re struggling to keep up with your current workload, hiring additional team members may be the best option. If you’re struggling to develop new skills, investing in consultations with experts may be the best option.)

Robson suggests completing the following fields to help you determine your costs: 1. Expenses: What will the monthly costs be? (Keep in mind you may also have startup costs that are not recurring but are only for when you establish your business—like legal documents or contracts.) Will you have to pay salaries to employees? 2. Additional expenses: memberships, gear, bookkeeping, paychecks? 3. Combine your expenses and additional costs, then subtract the revenue.

(Shortform note: You may want to add a field for taxes and statutory payments. This will help you to ring-fence the money you need to pay these non-negotiable costs, rather than having them get lost in the general expenses. This is important because, as a consultant, you’ll be responsible for paying your own taxes, and you may also have to pay taxes on behalf of your employees.)

Legal & Administrative Compliance

Robson advises choosing the right organizational structure for your consultancy. The four main business structures are sole proprietorship, partnership, corporation, and limited liability company (LLC). The simplest structure is sole ownership, where you have complete control of the business and are individually liable for all its debts and obligations. It's easy to dissolve, but the business failing can affect your credit.

A partnership involves multiple people who share responsibility for the business, including profits, losses, and decision-making. Having multiple owners makes securing business financing easier. A corporation is distinct from its proprietors, protecting them from personal financial responsibility for the company's debts. It's a good option if you plan to seek financing. LLCs are the typical form for small companies. It provides the protective features of an incorporated business and the tax advantages of being a partnership.

What Is an LLC?

A limited liability company (LLC) is a business entity that is legally separate from its owners, like a corporation. However, unlike a corporation, an LLC can be taxed like a partnership, meaning that profits and losses pass through to the owners’ personal tax returns. This can be beneficial for small businesses because it allows them to avoid double taxation, where both the company and the owners are taxed on the same income. In contrast, a sole proprietorship is a business owned and operated by one person, and a partnership is a business owned by two or more people. Both of these structures are not legally separate from their owners, meaning that the owners are personally liable for the business’s debts and obligations.

Robson also recommends enrolling your company with the appropriate government agencies. In the US, register at the state’s Secretary of State office where your business is located. In the UK, enroll your business at Companies House and HMRC.

(Shortform note: These are the official names of the government offices that keep the public register of companies and administer the country’s tax system for businesses and individuals. In the US, the Secretary of State office is the government agency that handles business registrations.)

Launching and Scaling a Consulting Firm

Robson says that to stand out in the market, you should identify what makes you unique as a seller. Your USP is what makes your consulting business distinct, superior, and more attractive to clients than your competitors. It could be your skills, experience, expertise, a unique approach, flexible scheduling, or offering a complimentary service with your projects.

(Shortform note: To discover your USP, start by interviewing recent clients or ideal prospects. Ask them about their last consultant-hiring decision and what single factor would make choosing you feel like the safest, most credible option compared to anyone else. This approach helps you identify what truly sets you apart in the eyes of your target market.)

Next, we’ll discuss strategies for acquiring and converting clients and for maintaining strong client relationships.

Client Acquisition & Conversion

Robson suggests using various pricing models to attract and convert clients. Providing a complimentary or low-cost service can help you gain the confidence of a prospective client. Once you've established a relationship, you can offer them a higher-priced service.

(Shortform note: This strategy works because it leverages the social norm of reciprocity. When you provide a complimentary or low-cost service, you create a sense of obligation in the client to reciprocate. This psychological principle makes them more likely to accept a higher-priced service later on, as they feel they've already received value from you.)

He also recommends forming partnerships with different companies to gain clients. For instance, a web designer might collaborate with a marketing firm that doesn't offer web development, and they could refer clients to each other.

(Shortform note: One risk of forming partnerships with other companies is that you may become dependent on them for a large share of your deal flow. If your partner’s priorities change or their performance drops, your pipeline could dry up quickly. To avoid this, diversify your partnerships and maintain your own direct marketing efforts.)

Additionally, Robson advises requesting that satisfied clients refer you. Referrals are powerful because they come with a strong recommendation from someone who has already benefited from what you offer. Identify clients who were especially pleased with your work and request that they refer you to other businesses.

(Shortform note: Requesting that satisfied clients refer you can backfire in several ways. First, if you repeatedly ask for referrals, clients may feel exploited, which can erode their long-term loyalty. Second, if your request for referrals emphasizes your own benefit, clients may feel that you’re more interested in your own success than in their needs. This can make any referrals they give you seem less credible to others.)

Finally, cross-sell and up-sell to existing clients. Cross-selling is when you present a service that complements what a client has already purchased. Up-selling is when you present someone with a higher-cost version of the service they’ve already purchased. These techniques can help you expand your market share by addressing more of your clients’ needs. To cross-sell, consider which services you offer complement each other. To increase sales, put together offers that include extra features, discounts, or limited-time offers.

(Shortform note: Cross-selling and up-selling can be counterproductive in consulting, especially when your business model is based on building trust with your clients. If your clients feel that you’re more interested in increasing your revenue than in helping them, they may lose trust in you and take their business elsewhere. This is especially true if you’re trying to sell them something they haven’t expressed an interest in. Instead, focus on providing value to your clients and building long-term relationships.)

Next, we’ll discuss some strategies for generating leads and converting them into clients.

Lead Generation Strategies

Robson recommends building a strong online presence to attract prospective clients. This helps you connect with prospects, stay relevant, and build credibility and trust. Most consumers research businesses online before hiring them, so to stay competitive, you need a presence on as many online platforms as you can. Your online profile must be polished and highlight your knowledge and what makes you different from the competition. To achieve this, ensure your site is accessible, modern, and easy for users to navigate. Ensure the material is current, precise, and pertinent. Consider hiring a professional website designer and putting resources into SEO to increase your site's visitors.

(Shortform note: In This Is Marketing, Seth Godin argues that you should focus your marketing on the smallest viable audience—the smallest group of people you can realistically serve and delight—because you don’t need everyone to pay attention to you, only enough of the right people who truly care about your work. This means you don’t need to be on as many online platforms as you can. Instead, you should focus on the channels that reach your specific audience. For example, if you’re a consultant for small businesses, you might focus on LinkedIn and industry-specific forums rather than trying to be everywhere online.)

Start a professional blog to increase your keyword usage and enhance your reputation. Use social media to attract followers and engage with them, and use hashtags to make your content discoverable. Get your consulting work included in pertinent online directories, and request reviews from clients. Additionally, leverage paid ads to appear on platforms like search engines, social networks, and online pages. Use email marketing to grow your mailing list and target your audience. Feature posts by guest authors on your blog, website, and social media to boost your SEO. Create videos to share on YouTube and various social media platforms. Encourage devoted clients to leave reviews and repost content. Work with influencers to reach the people you're aiming to target. Make sure your marketing is optimized for mobile devices. Share updates about speaking engagements and showcase trust badges and accreditations.

(Shortform note: These activities may not be appropriate if you’re working in a highly confidential consulting niche. For example, if you’re a consultant for a high-profile celebrity, they may not want you to have a public profile. They may want you to keep a low profile and avoid any activities that could draw attention to your work with them. In such cases, it’s important to respect your client’s wishes and maintain a discreet approach to your consulting business.)

Converting Leads into Clients

Robson suggests creating a consulting offer that clearly outlines the advantages for the client. A consulting proposal serves as a written presentation that promotes your services and leads to a mutual work agreement. It outlines the steps you’ll take to solve the client’s problems, including your concepts, plans, and contractual stipulations. It establishes mutual expectations before the work begins. Your proposal should guide the sales journey toward closure. It should demonstrate the benefits the client will receive, emphasize your unique offering, and request feedback. It should have a title page, a summary, a plan, deliverables, costs, and a timeline.

(Shortform note: A proposal guides the sales journey toward closure by presenting the client’s goals and commitments in writing. In Influence, Robert Cialdini explains that people have a strong desire to act consistently with their previous commitments. When people make a choice or take a stand, they feel internal and external pressures to act in ways that align with that commitment. This drive for consistency is so strong that people will often go to great lengths to justify their earlier decisions, even if those decisions no longer make sense. By presenting the client’s goals and commitments in writing, you tap into this psychological principle, making it more likely that the client will feel compelled to follow through and approve the proposal.)

It should emphasize the advantages for the client, such as how much time or money you'll save them or how much you'll increase their profits. This allows the client to envision how your service will benefit them. If you don’t stress this, they may opt for a less expensive alternative because they don’t realize the caliber of service you provide. You can also reference additional services you provide. If your service is technical, avoid complex terminology and make sure to clarify things for people without technical knowledge. Before presenting your proposal, arrange a meeting with the prospective client to establish trust.

(Shortform note: In some cases, emphasizing how much time or money you’ll save them or how much you’ll increase their profits may not be as effective as Robson suggests. For example, in Winning Government Contracts, Malcolm Parvey and Deborah Alston explain that public-sector procurement is highly regulated, and there are strict rules about how suppliers can interact with government agencies. In many cases, you can’t arrange a meeting with the prospective client before presenting your proposal. Additionally, government agencies often have standardized scoring systems for evaluating bids, so emphasizing how much time or money you’ll save them or how much you’ll increase their profits may not have as much impact as you’d like. This is also true for many large companies that have formal procurement processes.)

Ask questions to understand their professional requirements and how you'll fulfill them. Discover their obstacles, desired outcomes, and their timeline for a resolution. Pose questions that invite detailed responses and pay attention to their answers. Demonstrate to the client how you’ll fulfill their requirements with measurable results. Come to an understanding about when you'll deliver the outputs. Draft a formal proposal and have the client sign it before you begin the project.

(Shortform note: In addition to the questions Robson suggests, you should also clarify who will be involved in the decision-making process. This will help you understand who you need to convince to secure the engagement. For example, the person you’re speaking with may not be the final decision-maker, or there may be other stakeholders who need to approve the project. By identifying these individuals early on, you can tailor your approach and ensure that you’re addressing the concerns of all relevant parties.)

Client Relationship & Growth

Robson explains that building strong client relationships is crucial for growth. Clients are the lifeblood of your company. Without them, there's no one to serve. Building strong relationships helps you retain them, increase the business you receive from them, and earn referrals to new clients, which is how your business grows.

To build strong relationships, pay attention to what clients are saying and customize your communication to what they require. Stay in touch even during periods of inactivity so you remain on their radar.

The Psychology Behind Staying in Touch

Staying in touch with clients during inactive periods can help you build strong relationships because it leverages two psychological effects: the mere exposure effect and the availability heuristic. The mere exposure effect is the tendency for people to develop a preference for things simply because they’re familiar with them. By maintaining regular contact, even during quiet periods, you increase your familiarity with the client, making them more likely to think of you positively. The availability heuristic is the tendency for people to rely on immediate examples that come to mind when evaluating a situation.

Next, we'll provide additional information about client engagement and maximizing client growth and value.

Client Engagement & Retainers

Robson emphasizes that retaining customers is less expensive than acquiring new ones. It's five times as costly to acquire new clients as it is to retain current ones. Marketing efforts for existing clients to buy again are typically lower.

To retain clients, offer exceptional service. Focus on your client and ensure that every choice you make helps them. Communicate well and fulfill their needs. Develop a connection built on trust and communication. Have contingency plans in place to ensure a successful relationship.

(Shortform note: The claim that it’s five times as costly to acquire new clients as it is to retain current ones is a common rule of thumb, but it’s not always accurate. In Customer Centricity, Peter Fader argues that the idea that serving existing customers is always more economical than recruiting new customers is an oversimplification. He explains that the optimal balance between acquisition and retention spending varies widely across companies, industries, and customer segments.)

Client Growth & Value Maximisation

Robson advises focusing on client retention and satisfaction to advance your business. You need to become essential to your customers, making them depend on your expertise and fostering a long-term collaboration.

To retain customers, you can: maintain frequent communication with them; request their input; generate content of value; reply promptly to questions; have confidence in your knowledge; pay close attention to what clients say regarding work and personal matters; offer personal touches like handwritten notes; promise less and deliver more; take initiative; be straightforward and set expectations; be accessible to clients; treat your employees kindly, so they reflect well on your business; and establish a board of advisors.

Implement a Client Success System

Another way to retain customers is to implement a “client success” system. In Customer Success, Nick Mehta, Dan Steinman, and Lincoln Murphy explain that a client success system is a set of practices and tools that help you ensure your clients achieve their desired outcomes with your product or service. This system involves tracking key metrics like customer satisfaction scores, renewal rates, and expansion opportunities. By monitoring these indicators, you can identify at-risk clients early and proactively address their concerns. This approach allows you to focus your retention efforts where they’ll have the most impact, ensuring that your clients remain satisfied and loyal.