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How to start a consulting business ?

I am becoming skeptical that one can break in this industry of software consulting . All examples I have seen have started through one of the founders having some sort of a relation with their first client and branching out from their employer (usually one of the mainstream consulting firms , such as IBM , Delloitte , Andersen , etc.) to take on projects with a new consulting venture . Any thoughts ? Is there a way to start a consulting business otherwise ?

10 Replies

Tom Maiaroto
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Tom Maiaroto Entrepreneur • Advisor
Full Stack Consultant
Mindshare. You need to have a strong presence and blog with useful information. Clarity.fm is another great outlet. ...and yes, you will need to have relationships with people and be able to rely upon those. Consulting is a very up and down kinda thing. It is basically freelance.

I do it on the side because it's not sustainable as a full-time "business." I suppose it could be if you can get put on retainer for a few clients.

The problem with tech is everyone is a brain surgeon. Everyone has an opinion and there's a ton of options out there so it's confusing. I focus on educating my clients so they can learn to make their own decisions, but that also kinda writes me out of the consultant role at the same time =)
Christopher Cho CSM, PMP, CPIM
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Project manager/Scrum Master/Scrum Product Owner
I've seen some cases where you start with pro bono work through networking events and/or user group of the technology that you want to work wtih. What type of software consulting are we talking about? That would dictate your first recommended step is my thought at this point
Gil Allouche
2
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Gil Allouche Entrepreneur
Founder @ Metadata
Word of mouth is certainly the easiest entry. Also - contacting all of your previous employers and partners who have seen your work and asking them for work.
Bon Ndu Osonwanne
1
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Bon Ndu Osonwanne Entrepreneur
Business System Analyst at Business Integration Group
you're right, its about building relationships - that's how you find your first client (usually someone that trusts your work, from prior experience you've had with them - contracts etc). you can also start by doing some freelance work or pro-bono consulting on Catchafire.org. Check out the book, "Never Eat Alone"
Jim Houghton
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Jim Houghton Entrepreneur
General Manager Global Field Operations, Cloud Business Unit at CSC
Hi Daniel, With respect I believe you're drawing the wrong conclusion...yes, the first client of many new consulting organizations is a former employer, but that's because it always easiest to sell to people you know. There's implicit trust as well as understanding of the business challenges (having been an insider). The real challenge with starting a consulting firm is figuring out how to sell and deliver at the same time...unless you are financially comfortable or have a great Angel investor you'll find it very difficult to manage the cash flow challenges since generally have to do the work before you get paid. There are ways to mitigate this ranging from getting a percentage of fees up front to selling your receivables, but all have a cost. My recommendation is to find 3-5 peer level colleagues who can live without a paycheck for a few months. Figure out who can sell and who is better 100% focused on delivery and start off with that approach. Doing it all yourself is exhausting and very difficult. Jim Sent from my iPad
Howard Postley
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Howard Postley Advisor
Advisor / Investor / Designer / Entrepreneur
There is an old saying that a consultant will borrow your watch to tell you the time. While that it is meant as an insult, it is also somewhat true in a positive way. Consulting is about finding out what a client needs and delivering it to him or her, not convincing someone to buy a solution that you have. If you're wearing a watch and ask me the time, well... Before you can meet with a client and get him or her to tell you his or her needs, you need to be introduced. If you worked together somewhere else, hey, good start. If not, networking; find someone who knows both you and your potential client and ask for an introduction. Personally, I get about 50-100 contacts a week from one software consultancy or another that I don't know wanting to do work that I don't need. If I got a cold email from someone I didn't know, I'd have to have a really burning problem their message addressed directly, probably in the subject line, for me to pay any attention at all. If I got a message from someone I know who said, "Dan is really great at X. You might want to talk to him." I would at least consider it.

Ultimately, I find myself a bit confused by your question/comment. It sort of implies that you don't have any relationships with potential customers who might need what you want to offer. If that's true, what makes you believe that there is demand for what you want to offer? If not, it sounds like you're also a founder who has some sort of relationship with his first client. Regardless, sooner or later you're going to have to cultivate new customers who you don't already know. I don't imagine that most customers of IBM Consulting Services (where I worked in the past), Accenture, etc. are going to be all that interested in a sole practitioner or even a small firm. That's not why clients go to them. I think the real questions are why should people hire you and how to they know that?
Edward Robertshaw
1
0
Started TinyCall
Why are you special?

People go with big companies because they know they have resource and a history. Its boring but a safe bet. No one ever got fired for hiring IBM type thinking.

To get people to use your (new/small) company you need something thats harder to find. With Aperations, we develop MVP's, we say we turn ideas into products. We have a track record of doing it (I as founder have been through 500 start ups twice, I started lots of companies and had some success along the way).

So really its more about your secret sauce.
Aleksandra Czajka
1
0
Aleksandra Czajka Entrepreneur
Freelance Senior Software Engineer, Developer, Web Developer, Programmer - Full Stack
I'm a senior software engineer consultant. None of my clients I knew previously. Many have been through referrals, but not through companies I knew. I suggest you start working out of a co-workings space, get yourself known, go to meetups, give out your card, become a part of a bunch of websites that look for great consultants like AngelList, etc. etc. etc. Just spread the word. I get my clients from everywhere.
Gaurav Garg
1
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Gaurav Garg Entrepreneur
Vice President
A virtual nod to all member on this page; all good advice.

Here is another approach - traditionally consulting was centered around, "What do you need? I can do it better, faster, cheaper." I believe, the world has moved to an App store mentality. Unless you are Google and building your own switch for the scalable datacenter, there is pretty much NOTHING that you are doing that someone else has never done before.

My point, build a proverbial app (not a mobile app); something that solves a specific problem. It can be an approach, a methodology, a MVP, slides (you get the point). Something that says, you have done your homework.

Evangelize it for free, learn from it, refine it, charge for it. If there is value, your customers will find you and pay for it. Pretty soon, you will need more of you. I believe in "see one, do one, teach one" approach to build a team.
Howard Postley
0
0
Howard Postley Advisor
Advisor / Investor / Designer / Entrepreneur
To the point about app-ification, on the one hand, the trend has always been away from custom toward COTS. In general, customers prefer COTS and are becoming more willing to adapt their business processes to an existing product rather than building a solution to fit their existing processes or even customizing packages (which is where most of the work of the big consultancies lies). On the other hand, it is difficult to solve specific problems with general purpose solutions. In fact, all of the large consultancies package and market certain types of custom development. One of the objections that they encounter is from the client who believes his or her business process is unique, wants to maintain and support it and questions how a generic solution can do that (even though it's really a custom solution).For example, there are countless calendar apps in the App Store and not one of them is exactly what I want.The question for me is whether I want what I want enough to pay to the cost to develop it or whether I change to use what already exists. Different clients will come down on different sides of that question. In my view, software product developers and software consultants serve different clients with different needs. In general, a client won't trust a vendor to make a recommendation about build vs. buy (that vendor's product). IBM tries to do that and, after a decade of promising to steer customers to the best solution, whether or not it is an IBM solution, most customers still don't really trust them to do it. In fact, a lot of companies will hire a consultant to help them decide which product to implement. Ironically, I have seen that consulting service packaged as a product.

All that said, I would also bring up the point that, especially in a world where there are millions of apps, for small vendors, the question of how to get clients' attention isn't fundamentally different whether you're selling an app or a service.
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