You may not be aware that there are four consulting business models that you can choose from when you start your consulting business. It is important that you choose a model that fits your lifestyle so that you do not end up with another “job” where you are doing everything on your own.
1. The Solo Consultant Model
A lot of people start their consultancy business as a solo consultant. This means that you will work on all of the assignments that your clients provide. You will often be requested to come up with new plans for a client and even have to implement them.
It is OK to start as a solo consultant but it may not be the right strategy for the long term. You need to consider your exit strategy. If you are a solo consultant then you will not be able to sell your consultancy business because it revolves around you.
As a solo consultant, you will need to keep working to make money. If you cannot work for some reason then it will be difficult for you to generate any income. Solo consultants also have to perform all tasks in their business including marketing to attract new clients, bookkeeping, chasing payments, and more.
2. The Consulting Firm Model
If you prefer a “hands-off” approach to your consulting business then the consulting firm model may appeal to you. With this model, you are in charge of the business and will not be involved in much, if any, day-to-day consultancy work.
You will need to hire a team of consultants and other personnel to take care of other aspects of your business. The consultants will be responsible for dealing directly with the clients. Your job will be to manage and grow your consulting business. With this model, your consulting business will operate even if you are not there.
Using the consulting firm model will mean that you will have to manage the people that you employ. You will have to pay salaries so your profit levels will not be as high. But you will be able to sell your consultancy firm because you are not required to run it.
3. Productized Consulting Model
This is where you will convert your skills and experience into a productized service. You will create a series of steps that another consultant can easily repeat that will provide a specific outcome for a client.
Using the productized approach, you will be able to scale your business a lot more easily. By creating a consulting service process, you can hire other consultants to follow it and deliver results for clients. You will need to train the consultants that you hire to do this properly. Like the consulting firm model, you will be able to sell a productized consulting business.
4. The Hybrid Consulting Model
The hybrid consulting model is something that you can go for once you have established your consulting business. It is essentially a combination of the first 3 models that we have discussed. When you choose the hybrid approach you can pick the best parts of the first 3 models and make them a unique hybrid.
