3 rules to follow when starting your own management consultant business
A management consulting business can be a lucrative business, and if you are planning on starting your own, you could do well. But like all businesses, starting a business and ensuring it grows can be challenging. With a management consultancy, you are not only responsible for ensuring that your business succeeds, but you are also responsible for the success of other businesses. Needless to say, starting a management consultants business requires a lot of forethought and several months of preparation. Here are some tips to follow when starting your own management consultant business.
1. Invest in professional liability insurance
As mentioned earlier, as a management consultant, you will be responsible for ensuring your services enable companies to succeed. There are consequences of failing to follow through with your services. The consequences are far worse if your management advice harms your client’s business. You could be sued for malpractice, negligence, unsatisfactory services, error in judgment, omissions, and even for being the cause of misunderstandings that lead to losses. Whatever the claim against you and your business, you can be sure it will take a toll on your business’ reputation and your finances.
Professional liability insurance for management consultants can save your business’ reputation by ensuring the financial aspects of the legal case are taken care of. This would include lawyer’s fees, settlement fees, and even any fees on a judgment.
When you purchase professional liability insurance for your business, you need to take into consideration the types of risks involved and choose a coverage amount that matches your level of risk. Ensure the insurance covers everything you need to cover before a purchase. In other words, look for exclusions that may be added in the fine print. Finally, ensure the insurance does not lapse, or it will be redundant.
2. Identify your niche and the market requirements
There are several areas of management. Unless you are a master of the innumerable specializations and aspects of management, you are better off concentrating on the areas you are good at. Assess your strengths and your skillset, and when you have identified this, you would have identified your niche.
But then, there is also the market requirements that must be taken into consideration. Which are the management areas most required in the market? Are your skills and strengths required in the market? Are there any deficits in your skillset that you need to fill?
The more expansive and deeper your knowledge in your area of expertise, the greater the value you will be able to provide your customers. If there are aspects of your field of expertise that you have little/no knowledge of, update your skills and knowledge in those aspects.
3. Apply your knowledge to your business
Practice what you preach. Or in clearer terms, ensure your business practices the advice you give your clients. Putting your niche managerial skills into practice will ensure that your company grows, but it also serves a lot of other benefits. When you put your skills into practice on your own company, you will be aware of pitfalls that you could then advice your clients against. By experimenting on your company, you cause no external harm, and therefore, don’t have to worry about being sued if anything goes wrong. You will gain practical knowledge of your services.
When you start a new consulting company, you might start with just a few or no clients. Potential clients would want to look at your previous works to assess your ability to take on their requirements. Without referrals, the chances of bagging new clients are next to impossible. If you apply your knowledge to your business, you make your business your client, and you can showcase your firm as a solid example of your skills.
Here’s a parting thought – it’s good practice to learn to say ‘no.’ Say ‘no’ to potential clients who want help in areas you have no expertise, no matter how lucrative or exciting the offer. If you can’t deliver the service they require, this type of cases could drag your business down. Follow the rules outlined here, and you are on your way to success. Yes, you can succeed even with little or no prior experience in running a management consultancy business.
