Despite the COVID-19 pandemic, US startups have grown by 24% from 2019 to 2021. That's because building your own business is very gratifying. However, launching and building a startup is hard work. As a founder, your journey will be marked by uncertainty. You will face challenging decisions and have limited resources. That's after all, part of the fun of being an entrepreneur. But you don't have to do it alone.
Enter the startup consultant. Startup consultants bring experience and expertise that founders can benefit from in a cost effective way. And at the moment there appears to be more demand for startup consultants and a lack of good ones out there.
Startup consulting is fun and fulfilling because it offers flexibility, variability, and a dynamic work environment. In this article we'll get into how to leverage your skills and become a startup consultant.
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What do Startup Consultants Do?
Startup consultants work on a short-term basis during the early stages of a business to lay a solid financial foundation and chalk out a plan for future expansion. They offer a neutral, “outside” perspective and advice based on their industry knowledge and experience.
Startup consultants ask questions, analyze data, and offer suggestions on the most critical next steps to be taken. They prevent nascent startups from making expensive mistakes and accelerate their success timeline by six months or longer.
Specifically, startup consultants can help in one or more of the following ways:
- Quickly and objectively validate business ideas
- Assess a startup’s capabilities to determine weaknesses and opportunities
- Determine a realistic budget required to build and launch products/services
- Define the scope of the MVP and eliminate unnecessary features
- Undertake exhaustive market research
- Assist with branding and marketing strategies
- Help set up a management framework for day-to-day operations
- Leverage industry connections to help the startup grow
- Mentor and/or train salespeople, marketing personnel, and customer service staff
How to Become a Startup Consultant
Are you ready to leverage your experience and knowledge to help startups?
Are you raring to switch roles from employee to independent contractor? Here is a six-point guide to help you get started:
#1 – Start Building a Portfolio
The guidance offered by a startup consultant can make or break a startup. Founders are usually under pressure to demonstrate results within a certain period to get more funding. Thus, they cannot afford to waste money on wrong advice.
Startups will request to see your portfolio to evaluate your expertise and decide if you are a good fit. Ensure that your portfolio reflects your area(s) of expertise and showcases your experience and track record of assisting successful startups.
You will be asked questions like:
- What is your educational background?
- Have you built a startup and how has it performed?
- Have you worked at a startup and what were your contributions?
- Can you show examples of how you have assisted startups in the past?
To run a profitable, long-term consulting business, you should have several years of experience in your preferred area -- either in a corporate job or in an academic setting, or even both.
A consulting career will not work if you don't have hands-on knowledge of helping startups.
People who call themselves experts have a minimum of five years of full-time experience in their area of interest.
Use a portfolio builder to create a professional portfolio site that will impress clients and demonstrate your expertise through case studies. Remember, clients will vet you based on the way you display your knowledge and capabilities on your site.
#2 – Choose a Specialization
Startup consultants look into various aspects of a startup based on their knowledge and experience -- strategy, technology, operations, marketing and PR, legal, or finance.
Startups will expect you to have industry-specific knowledge to help them navigate the hurdles in the entrepreneurial journey and avoid common (and costly!) mistakes that founders usually make.
You should have a solid background in your chosen specialization along with proven experience in building a successful startup or assisting one.
Don’t make the mistake of branding yourself as a generalist to get more clients. You will be perceived as more of an expert if you position yourself as a specialist--and have the chops to back it up.
Over time, you can build trust, credibility, and a reputation as a high-end startup consultant for a specific area and/or industry.
#3 – Get the Necessary Licenses & Certifications
While you don’t need a license to operate as an independent startup consultant, you do need certain minimum qualifications.
You should at least have a graduate degree in management, marketing, business administration, finance, or related fields. An MBA will greatly boost your chances of getting hired.
Additional certifications in your area of expertise will give you a competitive edge in the startup consultancy market. Ensure that these certifications are renewed regularly.
- Project Management Professional (PMP) certification,
- Strategic Management Professional (SMP) certification
- Certified Business Analysis (CBAP) Professional
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#4 – Start Networking
Ideally, if you have several years of experience in the corporate world or academic settings, you will already have built a vast network of valuable connections.
You can leverage your network to help your clients i.e. first-time founders make the right connections, draw interest to their startups, and get valuable feedback.
You can also build on your existing network by attending conferences, business events, and local associations.
Networking is necessary for your startup consulting business to flourish and bring in the results your clients want.
#5 – Set a Pricing Structure
How are you going to charge your clients? Startup consultants charge in various ways -- by the hour, by the project, by a monthly retainer, or based on performance.
Keep in mind that you’re charging for your knowledge, experience, and expertise. Even if you’re taking a one-hour consultation call, you’re offering the essence of years of experience.
Consider the following factors to arrive at your quote:
- Type of services required
- Scope of services
- Competitive landscape of the startup and location
- One-time service or ongoing engagement
- Your experience level
Experienced startup consultants usually charge by the project and the quote includes the deliverables and the time required to complete the project.
You can also research your competitors to see how much they’re charging on average.
US startup consultants usually charge fixed-priced projects starting from $2,500 per month. Hourly rates vary between $150 to $250 depending on the scope of work and level of experience of the startup consultant.
#6 – Develop a Marketing Plan
To stay in business, you need to keep promoting yourself and your services. Devise a marketing plan to consistently spread the word about your startup consulting services.
You’re not just selling to people who are actively looking for your services. You’re also creating a demand for your services with people who aren’t even aware yet that they need you.
Decide your marketing budget according to how much you’re willing to spend on various marketing channels -- direct mail, content creation, advertising, cold calling, social media, and newsletters.
LinkedIn, Twitter, and Facebook are popular networking sites where you can share information about your services and your industry-specific knowledge.
Take part in speaking opportunities, become a member of local associations, and participate in promotional events.
Referrals from satisfied clients are a powerful way to establish trust and credibility and bring in fresh prospects.
Revisiting the first point here, your portfolio site is a crucial element of your marketing plan and should be kept updated. You can also start a blog on your website where you publish high-quality, relevant content to establish thought leadership and industry expertise.
Conclusion
As a startup consultant, you know you are an invaluable asset to any early-stage startup. Your job is to convince entrepreneurs and business owners to believe in your capabilities and expertise.
Use all the resources at your disposal - portfolio, networking, social proof - to drum up awareness and interest in your startup consulting services. Just like you have invested a lot of time and energy into gaining experience in your chosen field, you must also learn to promote your services to prospective clients.
The startup landscape is ever-changing and if you love a good challenge in a fast-paced environment, you will find success as a startup consultant.
Guest Post by Hazel Raoult, a freelance marketing writer and works with PRmention. She has 6+ years of experience in writing about business, entrepreneurship, marketing and all things SaaS. Hazel loves to split her time between writing, editing, and hanging out with her family.
