If you have a business background, you already have the knowledge necessary to start your own consulting business. If you do not have such a background, this article will provide you with the essential tools you need.
Starting a Small Business
There are many steps involved in starting your own business. Approach this process one step at a time, and be careful not to overwhelm yourself. Seek guidance and input from others while keeping your own goals firmly in mind.
Be prepared to be flexible in this process. New information can steer you in a different direction than you'd originally intended. If you find yourself off track, just be sure to get right back on.
Many resources exist for helping people start their own small business. These include: Small Business Administration (www.sba.gov), which has at least one office in every state; SCORE (www.score.org), which is staffed by over 10,000 volunteers eager to help new businesses start up; Nolo.com (www.nolo.com), which offers useful legal advice and necessary forms with regard to business formation and human resources.
Create a Business Plan
A business plan is your plan to do business. Creating one forces you to think clearly about what you want your business to be and how you intend to materialize your goals. There are many samples available online, you could purchase business plan software, or hire a company or an individual specializing in this area to develop one for you. The business plan answers such questions as the services you will provide, who your competitors are and how your company will be better and different, who your customers are and how you will reach them, how you will market your business, what you intend to charge for your services, how much money you will need to start up and where you will get these funds, and your operating costs. The websites listed above generally offer samples of business plans.
Choose a Business Name
In the business of etiquette consulting, as in most businesses, your business name needs to identify your services but not limit your growth. For example, if you are thinking you would like to specialize in business etiquette so you name your business "Business Protocols," it will be difficult for you to reasonably add services such as dining etiquette or manners for children if you later decide you would like to offer these services as well.
It's a good idea to use creative but easily identifiable names. Don't try to be too cutesy or funny with your business name, and be sure to avoid names that are difficult to spell or pronounce or words with unclear meanings. In deciding on a business name, you should consider your target customers, the benefits you will bring to them, words or phrases that will appeal to this target market, and your competitors' names.
A good strategy for deciding on a business name is to sit down and brainstorm several possible names – at least 8-10 to start. Then seek the input from several close friends and family members whose judgment you trust. To help get your creative juices flowing, do an internet search of etiquette consulting companies. Of course you can't use the same names as they have, but you can get an idea of what companies in your field are calling themselves. Be sure that your name is distinct enough from all of your competitors so as not to be confused with them, and to avoid any sorts of legal issues that could arise from having a name that's too similar to an existing company. You might also consider using a DBA, or doing business as name, which allows you to conduct business under a name that is different from your own or from the parent company you register. For example, you might decide to register the name "Manners and Protocols" as your official business name, and then register a DBA such as "Codes of Courtesy." The advantage here is that you can easily change the DBA if you decide you want to change the name of your company, without having to go through all of the paperwork of creating a brand new business under a different name – instead, you just change the DBA, or add another one.
Business Structure
There are several options available to you for the type of business you would like to register. Each has advantages and disadvantages, and you should review the conditions of each type very carefully before making a decision. For example, the sole proprietorship is the simplest and least expensive to construct, yet in the event of being sued, you are personally liable (meaning your personal assets can be attacked) and all business income is considered personal income. At the other end of the spectrum, a corporation protects you from all sorts of legal liability as it is considered an entity in and of itself, yet you are required to file quarterly statements and there is a considerable amount of mandatory paperwork involved in this sort of structure. Be sure to do your homework and understand the strengths and weaknesses of each type of business structure clearly before making a decision. There are multiple resources online to help you understand these differences clearly, including pages with the Internal Revenue Service (IRS) website. If you choose the wrong business structure for your needs, you may be very displeased with your decision in the long run.
Insurance
It's not a bad idea to consider investing in insurance policies to ensure your investment isn't wiped out in the event of some unforeseen circumstance. Types of insurance worthy of consideration include life, disability, vehicle, and of course health insurance.
Hiring an Attorney
If you have any questions about these very important decisions or are at all unclear about the differences between your options, it's wise to seek the advice of legal counsel. Paying for an hour or two of an attorney's time can save you much trouble and time in the long run, and may well be a worthwhile investment. You can either pay for advice only, as a one-time appointment to answer your questions and help clarify your options, or pay the attorney to develop your necessary paperwork, which will be much more costly of course but may save you stress and frustration in trying to figure it out for yourself. Business attorneys make a living helping people with these sorts of decisions, and a good, well-seasoned one has been through this process literally thousands of times with people in all sorts of business endeavors. They have seen the outcomes of certain decisions, know the advantages and disadvantages of each option very clearly, and can help you choose what is right for you. When you stack up this sort of experience against your one-time endeavor, you may (or may not!) wish to seek this sort of assistance.
Finances
As an etiquette consultant, you can actually start earning quite quickly. You really don't need to rent an office space, at least at first, and you might already have the necessary office equipment such as a telephone, computer, scanner, and printer. You can also start your consulting business on the side, while maintaining your regular-earning job, until your etiquette consulting business makes you enough money that you can quit your other job. To go into this business full time, the rule of thumb is to have at least six months of living expenses, beyond your startup funding, in the bank before you start your business. This gives you a little time to build up your business and earn sufficiently before you run out of money.
Additional Capital
If you would like to seek external funding sources, there are two types to choose from: equity financing and debt financing. In equity financing, someone offers you money for a share of your business in exchange for their investment. In debt financing, you borrow money, such as a loan or line of credit. There are numerous options available for both of these possibilities. Once again, be sure to do your research carefully before making a decision, and be sure that any fees involved with your funding source are reasonable for your budget.
Budgeting
Wherever you get your money from and however much you have to work with, you need to have a clear idea of where money is needed and where all of your money is going. If you need a service but don't want to pay for it, consider bartering for that service. For example, you might trade an etiquette consultation for five employees in exchange for 1000 business cards. There are also bartering groups you can join to expand your bartering options.
Tracking your Finances
You will need to open a business account at the financial institution of your choice. This is necessary for paying your company bills and for paying your own salary. When selecting check styles, it's a good idea to choose the kind that requires you to record checks you've written. This creates a nice paper trail which will benefit you at tax time and make it easy to create balance sheets when you need them. Be sure to keep your personal and business expenses separate.
You will need a ledger book or some other ledger system, such as an accounting software like Quicken or Quickbooks, to record your accounts payable and accounts receivable. Also keep two small additional ledgers in your briefcase or purse to log 1) mileage and other travel expenses, and 2) your daily spending. Also carry an envelope with you for receipts for your business purchases – a cup of coffee you buy for a prospective customer, relevant magazines and other materials, client-related supplies, or admission to a trade fair, for example. Make it a habit to ask for a receipt for all business-related expenses, and jot down on the receipt the expenditure's business purpose. File these receipts in their appropriate file in your filing system, and staple receipts to order forms for each client purchase and service. Whatever tracking system you design, make sure it's well organized, it works for you, and you can find anything you need instantly.
Taxes
Be sure you consider the tax situation for your business structure prior to determining your business structure. You need to know how your business will be taxed and when you must pay those taxes.
Setting Fees
Etiquette consultants set fees in various ways, sometimes depending on the individual consultant and sometimes depending on the service provided. Fees are charged either hourly, daily, per-person (based on number of people in the training), or per-project/per-service. Your fees are determined by considerations of your hourly rate for your consulting service, costs of materials supplied, travel to and from the training site, and rental of presentation space. A portion of your overhead fees (e.g. insurances, telephone bill) should also be included in your fees. Your preparation time is another consideration when setting your fees. If you are asked to design a custom program, your prep time will be much higher than if you are asked to do a general presentation on telephone etiquette.
In calculating your hourly consultation rate, remember that you will likely only work a few billable hours per week. Your fees will have to be high enough to cover all of your expenses and your salary, however. This is where the budget you set out becomes very useful. You don't want to overprice yourself, and you don't want to underprice yourself either. Many people equate price with value, to setting a price that's too low suggests to them that the value of your services aligns with the low price. Similarly, you shouldn't be far above your competition. If you are, you should take another look at your budget as you may have expenses that can be cut.
Hourly Fees
Hourly fees are common for etiquette consultants, particularly those working with individual clients. Additional expenses are extra. The hourly fee applies to the initial consultation and the time it takes you to customize programs to suit a particular purpose. You may also develop a flat rate for these services. If you tend to work much faster than your competitors, for example, a flat rate fee might be more beneficial to you.
The beginning etiquette consultant generally charges between $40 and $60 per hour, depending on the demand for the service and the geographical area. An experienced consultant can easily charge $100 an hour, and in major cities, $200 an hour is not uncommon. An established consultant generally increases her rates by about 15% each year.
Daily Fees
Corporate trainings are generally charged by the day. It's not unusual to charge several thousand dollars a day for a corporate training program. That said, if an organization has a specific budget in mind and it's in an area where you won't have to do a lot of additional research, you might be flexible with the fee.
It's important to have a fee in mind when talking with the client. Professional speakers and trainers have "fee schedules" that they provide upon request, though of course you are free to negotiate this fee as you like.
Per-person Fees
In setting fees for several people, you can charge half your hourly rate for each person. Thus, with a rate of $100 per hour and a 30-person training, your presentation fee would be $50 times 30, or $1,500 per hour, plus expenses.
Project-Based Fees
Large organizations will generally want project-based fees. These often involved multiple types of trainings for different groups of people – such as communication training for the customer service department, a separate communication training for the sales team, and individualized training for a few executives. When calculating your rate for these types of projects, consider the per-person fee schedule suggested above with an additional materials fee added in.
The tips provided in this article will help you set up your own etiquette consulting business and get started in your new career field.
