If you’re leaving your corporate job for a new career as an independent consultant, you may never have had to write a business plan. This is rarely a task that falls upon employees, so unless you have previously owned a business of your own, there’s no reason why you should have taken time to understand the importance of a business plan or researched how to go about creating one.
The Importance of an Independent Consulting Business Plan
Of course, as an independent consultant, you’ll be entering a new world and while unplanned exploration can be exciting, it’s not the soundest approach to starting a new business. For many new businesses, a formal business plan is necessary to obtain funding.
As a consultant, you may not need to finance your start-up, since your knowledge is the major fundamental business asset and that doesn’t cost you a cent—unless you plan to take on some extra training or education before you start out. However, that shouldn’t serve as an excuse to forego the creation of a business plan.
Like any journey, real or metaphorical, if you don’t know what direction you plan to take, it’s easy to go round in circles without making any meaningful progress.
Trust me; you’ll get your independent consulting career off to a better start if you set out your business goals and financial targets in the form of a structured plan.
Key Elements of Your Business Plan
The contents of your independent consulting business plan will differ according to whether you’re preparing it for potential lenders/financers or only for yourself. In this post, I’ll assume it’s just for you. That means you can apply a slightly more personal focus to your business plan. The following elements can be useful to include:
Your Reasons for Consulting: Document all the reasons you can think of for wanting to be an independent consultant. This will help you to determine your goals.
Personal and Business Goals: It’s important to declare some goals and to include them in your business plan. This will give you some direction.
Target Market: You may already know which industry you will specialise in, but unless you want to take on all and any customers that come your way (which is generally not advisable), you should decide what type and size of organisations you plan to work with. This will help you when it comes to defining your marketing strategy.
Your Value Proposition: Once you have a clear idea of your target market, you should document how you plan to differentiate your consulting services from competitors in your market segment.
Other elements you might wish to include in your business plan are boundaries for geography (how far afield are you prepared to work?) and limits to your working hours, a strategy for using and re-investing profits, provisions for the cost of training and education, and ideas for marketing tactics.
A Vital First Step
You can make your independent consulting business plan as simple or complex as you wish, but simplicity will make it easier to refer to and to follow. Whatever you do though, don’t forgo this important first step in your new vocation.
In future posts I’ll cover business planning in more detail, covering topics such as how to prepare a more formal plan to present to potential investors or lenders and some practical tips for actually constructing your plan.
Right now though, if you’re preparing to commence a career in independent consulting, it’s a good idea just to spend some time thinking about the key aspects of your plan. Brainstorm the points listed in this article and get some ideas listed down on paper (or digital media). Then you’ll have a good foundation on which to base your independent consulting business plan.