How Do I Structure a Consulting Business?

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Guide to Starting a Consulting Business

Here’s how to start a consulting business in 10 simple steps:

  1. Define your niche
  2. Evaluate your target market
  3. Build your network
  4. Establish an online presence
  5. Manage your time effectively
  6. Start with smaller projects
  7. Understand needs of your clients
  8. Develop a tailored strategy
  9. Create financial projections
  10. Focus on clear objectives

Consulting Business Structures

What is the best structure for a consulting business?

There are four primary business structures to consider:

  • Sole proprietorship
  • Partnership
  • Limited Liability Company (LLC)
  • Corporation

For larger firms, a two-tier structure works well. One senior executive oversees operations, and a second tier of managers oversees each business unit. The top executive is a partner or owner.

Key Considerations in Consulting Firm Structure

When structuring a consulting business, focus on:

  • Exploiting knowledge gaps
  • Building relationships, not just revenue
  • Setting up operations to maximize profits and minimize tax burdens

Consulting Firm Organizational Structure

The management team of a consulting firm with a matrix structure is usually made up of practice leaders and leaders from geography. The hierarchy in consulting is usually flat, including roles like analyst, consultant, senior consultant, engagement manager, partner, managing partner.

Types of Consulting Business Structures

In consulting, there are four basic business structures: sole proprietorship, LLC, C Corp, and S Corp. Each structure has its advantages and disadvantages that need to be considered before choosing the right one for your consulting firm.

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