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HR Consulting Business Plan Template

Written by Dave Lavinsky

Human Resources Consulting Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their human resources consulting businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an HR consulting business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is an HR Consulting Business Plan?

A business plan provides a snapshot of your human resources consulting business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for an HR Consulting Firm

If you’re looking to start an HR consulting business or grow your existing business, you need to write your own business plan. A business plan will help you raise funding, if needed, and plan out the growth of your HR consulting business in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Human Resources Consulting Businesses

With regards to funding, the main sources of funding for a human resources consulting business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the lender will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings is the most common form of funding for a human resources consulting business. Personal savings and bank loans are the most common funding paths for HR consulting businesses.

Finish Your Business Plan Today!

If you want to start an HR consulting business or expand your current one, you need a business plan. Below we detail what should be included in your own business plan for an HR consulting firm.

Executive Summary

Your executive summary provides an introduction to your own business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of HR consulting business you are operating and its status. For example, are you a startup, do you have an HR consulting firm that you would like to grow, or are you operating human resources consulting firms in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the HR consulting industry. Discuss the type of HR consulting business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of HR consulting business you are operating.

For example, you might operate one of the following types of human resources consulting businesses:

• Human Capital Strategy : this type of business focuses on strategic matters such as corporate culture, diversity, and organization design.
• Compensation & Benefits: this type of business involves analyzing and consulting on all aspects of employee compensation, from base pay to secondary benefits, as well as pension and retirement.
• Talent Management: this type of business focuses primarily on recruitment and retention of talent, as well as on talent development.
• Professional Development: this type of business offers services ranging from leadership coaching and development to developing learning management systems.

In addition to explaining the type of HR consulting business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of websites launched, the types of sites developed, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the HR industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the HR industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your HR consulting business plan:

• How big is the human resources industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your human resources consulting business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your HR consulting business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: financial services companies, government entities, healthcare institutions, and technology companies.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of human resource consulting business you operate. Clearly, government entities would respond to different marketing promotions than technology companies, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations, and income levels of the customers you seek to serve. Because most HR consulting businesses primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.  

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other human resource consulting firms.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes more generalized management consultants or dedicated in-house HR teams.

With regards to direct competition, you want to describe the other HR consulting businesses with which you compete. Most likely, your direct competitors will be human resource consulting businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• Do they specialize in specific industries (i.e. healthcare, technology, etc.)?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide either a wider range or more specialized range of services?
• Will you offer virtual service options?
• Will you provide superior customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an human resource consulting business, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of HR consulting company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to strategic consulting, will your HR consulting business provide compliance consulting?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your company. Document your location and mention how the location will impact your success. For example, will you operate from a physical office, or will you primarily interact with clients online and/or at their place of business? In this section, discuss how your location will affect the demand for your services.

Promotions : The final part of your marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Signs and billboards
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your HR consulting business, including marketing, providing consultations, building analytics processes, developing and presenting recommendations, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign your 50 th consulting contract, or when you hope to reach $X in revenue. It could also be when you expect to open an HR consulting business in a new location.  

Management Team

To demonstrate your HR consulting business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow your business.

Ideally you and/or your team members have direct experience in human resources and/or managing HR consulting businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in Human Resources, or successfully running small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

In developing your income statement, you need to devise assumptions. For example, will you focus on one client at a time, or will you have teams working on multiple projects at once? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an hr consulting business:

• Office build-out
• Cost of buying or leasing a company vehicle
• Cost of office supplies such as computers and software
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office lease, any notable clients you’ve served, or an overview of the services you offer.  

Putting together a business plan for your HR consulting business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert HR consulting business plan; download it to PDF to show banks and investors. You will really understand the HR industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful HR consulting business.  

HR Consulting Business Plan FAQs

What is the easiest way to complete my hr consulting business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your HR Consulting Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of HR consulting business you are operating and the status; for example, are you a startup, do you have an HR consulting business that you would like to grow, or are you operating a chain of HR consulting businesses?

Don’t you wish there was a faster, easier way to finish your HR Consulting business plan?

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Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to learn about Growthink’s business plan writing service .

Other Helpful Business Plan Articles & Templates

HR Consulting Business plan Template

Written by Dave Lavinsky

HR Consulting Business Plan

You’ve come to the right place to create your Human Resources Consulting business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their HR Consulting businesses.

Below is a template to help you create each section of your Human Resource business plan.

Executive Summary

Business overview.

HR Solutions is a startup human resources company located in Spokane, Washington. The company is founded by Tremaine Jackson, a former human resources manager in a large retail company. Tremaine led a team of twenty human resources employees in overseeing all aspects of human resources for the employer and developed a unique application that he has decided to introduce in his new company, HR Solutions.

HR Solutions will be the comprehensive leader in human resource training, management, negotiations, and solutions-finding company in the state of Washington. They will provide everything human resource personnel need to hire and effectively onboard new employees, as well as everything needed to maintain proper records, effectively cover communication and employee relations, and become proactive about potential conflicts.

Product Offering

The following are the services that HR Solutions will provide:

• Proprietary app that creates comprehensive HR management plans
• Training to maximize personnel potential
• Assistance in compliance with laws and regulations
• Curated HR solutions to solve employee issues
• Assistance in establishing productive work environments
• Onboarding from A to Z
• “Support Cadre” for HR management personnel
• Recruitment and talent acquisition training
• Organizational process-and-procedure manual

Customer Focus

HR Solutions will target small-to-large businesses in the Spokane, Washington region. HR Solutions will also target Washington state with select online training programs and sales of the proprietary HR app. HR Solutions will target C-suite executives in Spokane.

Management Team

HR Solutions will be owned and operated by Tremaine Jackson. He recruited his former administrative assistant, Sharlene Harris, to be his Administrative Manager in HR Solutions, where she will provide oversight of all personnel and HR responsibilities within the company itself. He also recruited Mason Wright, a former associate and HR manager, to be the Senior HR Advisor within the startup; he will lead the other HR managers in their roles as client-focused solution providers.

Tremaine Jackson is a graduate of the University of Washington in Seattle, where he majored in Human Resource Development. He has been a human resources manager in a large retail company, where he led a team of twenty human resources employees in overseeing all aspects of human resources for his employer and he developed a unique application that he has decided to introduce in his new company, HR Solutions. Former clients and associates have indicated they will follow him when he establishes HR Solutions.

Sharlene Harris holds a bachelor’s degree in Business Administration from Spokane College. She has been Tremaine’s administrative assistant for ten years and her new role will be the Administrative Manager in HR Solutions. She will provide oversight of all personnel and HR responsibilities within the company itself.

Mason Wright, a former associate and HR manager, developed a large following of loyal clients. He will be the Senior HR Advisor within the startup; he will lead the other HR managers in their roles as client-focused solution providers. His clients have indicated that they will follow him into the startup business.

Success Factors

HR Solutions will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of HR Solutions

Financial Highlights

HR Solutions is seeking $200,000 in debt financing to launch HR Solutions. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for HR Solutions.

Company Overview

Who is hr solutions.

HR Solutions is a newly established, full-service human resource company in Spokane, Washington. HR Solutions will be the most reliable, cost-effective, and effective choice for HR managers and leaders in Spokane. Certain online programs and the proprietary app will also be the most effective and productive options for HR personnel throughout the state of Washington. HR Solutions will provide a comprehensive menu of training, recruitment, personnel, solution-finding services for any company to utilize. Their full-service approach includes a comprehensive set of training, management, and solution options.

  HR Solutions will be able to provide superior HR support and solutions to every business. The team of professionals are highly qualified and experienced in onboarding, training and creating solutions for every human resource quandary. HR Solutions removes all headaches and issues of the human resource personnel and ensures clients find the best answers to all their HR needs with the outstanding customer service found at HR Solutions.

HR Solutions History

HR Solutions is owned and operated by Tremaine Jackson. Tremaine Jackson is a graduate of the University of Washington in Seattle, where he majored in Human Resource Development. He has been a human resources manager in a large retail company, where he led a team of twenty human resources employees in overseeing all aspects of human resources for his employer and he developed a unique application that he has decided to introduce in his new company, HR Solutions. Former clients and associates have indicated they will follow him when he establishes HR Solutions.

Since incorporation, HR Solutions has achieved the following milestones:

• Registered HR Solutions, LLC to transact business in the state of Washington.
• Has a contract in place for a 20,000 square foot office space within a downtown Spokane building.
• Reached out to numerous former clients and contacts to include those who will refer and recommend HR Solutions.
• Began recruiting a staff of ten HR managers and three office personnel to work at HR Solutions.

HR Solutions Services

The following will be the services HR Solutions will provide:

Industry Analysis

The human resources industry is expected to grow during the next five years to over $35 billion. The growth will be driven by an increased number of young employees who require extensive training and onboarding. The growth will be driven by an increased need for employees as the older demographic employee retires. The growth will be driven by an increase in the number of employees who are new to the U.S. and require assistance in onboarding and training. The growth will be driven by new technological advances that are not yet known. Costs will likely be reduced as new applications, such as the one created by HR Solutions, are created and introduced into the industry.

Customer Analysis

Demographic profile of target market, customer segmentation.

HR Solutions will primarily target the following customer profiles:

• Small-to-large businesses in the Spokane region
• Small-to-large businesses throughout Washington (select programs/app)
• C-suite executives in Spokane

Competitive Analysis

Direct and indirect competitors.

HR Solutions will face competition from other companies with similar business profiles. A description of each competitor company is below.

Human Resource RX

Human Resource RX was founded in 2005 by Reme and Janette Choux. As former human resource negotiators within a large firm, they developed distinctive programs that can help HR managers reduce conflicts in the workplace. In addition, the programs assist personnel in recuperating from workplace trauma and other difficulties or issues that arise in the office.

Human Resource RX, headquartered in Spokane, claims to be the “Best HR Prescription” for companies that require assistance in the form of management and oversight in trauma or difficulty. Human Resource RX also assists in compliance issues within the state of Washington, bringing expert advice into thorny issues that can potentially lead to litigation. The company has three offices throughout Washington, each with a staff of twelve “HR managers” who service local businesses. The company has maintained a good standing within the state of Washington, although there have been two separate issues of incorrect legal advice offered to clients. The matters were both brought by former clients to the court system and eventually resolved.

Premier Human Resource Associates

Premier Human Resource Associates is owned and operated by Tami Watson, an HR executive with over thirty years of experience. She is joined in the company by her daughter, Reyna Watson, a recent graduate of Spokane College, where she earned a bachelor’s degree in Communication. Premier Human Resource Associates is located in Spokane and offers an extensive onboarding and training program to support HR managers within local hospitals and medical clinics.

The bulk of services provided to HR managers includes various specific onboarding and training needs of nurses, LVNs, and other care providers. Attention is given in particular to the processes of sanitation and hygienic practices, along with the methods of communication used within these specific businesses. To date, the company has assisted in successfully onboarding over 5,000 nurses and other caregivers.

Transport HR Training

Transport HR Training was started in 1997 as a result of multiple difficult issues within the truck driving industry in Washington. In the decades since, Transport HR Training has established the full spectrum of services and products for HR associates in the long-haul and short-transport businesses. Specific practices and procedures relating to, in particular, medical issues of drivers, have been developed to smooth the HR process and align truck drivers with services they need. Transport HR Training offers a comprehensive package of services that includes negotiation in conflict, onboarding specifics, driver training, legal procedures and processes, and other truck driver-specific conditions.

Competitive Advantage

HR Solutions will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

HR Solutions will offer the unique value proposition to its clientele:

Promotions Strategy

The promotions strategy for HR Solutions is as follows:

Word of Mouth/Referrals

HR Solutions has built up an extensive list of clients and contacts over the years by providing exceptional service and expertise to their clients. Associates will follow them to their new company and help spread the word of HR Solutions.

Professional Associations and Networking

HR Solutions will extensively network throughout HR association and industry events. They will take an active role in leadership wherever invited to do so and will work to support the efforts of all associates or members.

Website/SEO Marketing

HR Solutions will fully utilize their website. The website will be well organized, informative, and list all the services that HR Solutions provides. The website will also list their contact information and list their available times to make reservations during the week. This will allow HR managers to speak with HR Solutions when most beneficial to the client. The website presence will engage SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Human Resources company” or “HR near me”, HR Solutions will be listed at the top of the search results.

The pricing of HR Solutions will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for HR Solutions. Operation Functions:

• Tremaine Jackson will be the Owner and President of the company. He will oversee all staff and manage client relations. He has spent the past year recruiting the following staff:

Milestones:

HR Solutions will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for the HR Solutions
• 6/1/202X – Finalize contracts for new HR Solutions clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into HR Solutions office
• 7/1/202X – HR Solutions opens its office for business

Financial Plan

Key revenue & costs.

The revenue drivers for HR Solutions are the fees they will charge to clients for their services, online training and proprietary app.

The cost drivers will be the overhead costs required in order to staff HR Solutions. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

HR Solutions is seeking $200,000 in debt financing to launch its human resources company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Clients Per Month: 40
• Average Revenue per Month: $80,000
• Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, human resource business plan faqs, what is a human resource business plan.

A human resource business plan is a plan to start and/or grow your human resource business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Human Resource business plan using our Human Resource Business Plan Template here .

What are the Main Types of Human Resource Businesses? 

There are a number of different kinds of human resource businesses , some examples include: Human Capital Strategy, Compensation & Benefits, Talent Management, and Professional Development.

How Do You Get Funding for Your Human Resource Business Plan?

Human Resource businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Human Resource Business?

Starting a human resource business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Human Resource Business Plan - The first step in starting a business is to create a detailed human resource business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your human resource business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your human resource business is in compliance with local laws.

3. Register Your Human Resource Business - Once you have chosen a legal structure, the next step is to register your human resource business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your human resource business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Human Resource Equipment & Supplies - In order to start your human resource business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your human resource business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

How to Start a Human Resources Consulting Business

Below you will learn the key steps to starting an HR consulting firm.

10 Steps to Starting a Huaman Resources (HR) Consulting Business

1. conduct market research to determine demand.

An important step to starting an HR consulting business is conducting market research. To begin, you must learn what services your clients want and how much they are willing to pay for them. There are two ways you can go about conducting this research:

• Survey your target market . This can be done through online surveys, focus groups, or interviews with potential clients.
• Review industry reports and surveys . There are many resources available online and in print that will help you understand the current trends in the HR consulting industry.

Once you have analyzed the survey data, determine which types of businesses are likely to hire you and how much they are willing to pay. Use this information to set your consulting prices.

2. Name Your HR Consulting Business

Once you have analyzed your market and determined what services clients want, it’s time to name your HR consulting firm. While naming a business can be difficult, there are a few rules of thumb to keep in mind:

• Keep it Short : Your business name needs to be short enough for clients to remember and say.  
• Keep it Relevant : Your business name should be relevant to the HR services you offer and your ideal client’s needs.
• Keep it Memorable : Using clever ideas and words, help your audience connect with your business.
• Focus on Your Target Audience :  Make sure that whoever sees or hears your company name understands who you are targeting as clients.

Read our article about choosing the right business name .

3. Choose Your Business Structure and Set-Up Your Company’s Legal Entity

As with any business, the type of legal entity you set up is critical.  After all, you want your company to be treated as a separate entity, not just an extension of yourself.  There are several types of structures in which you can start your HR consulting company. Three popular options are sole proprietorship, S-corporation and LLC (limited liability company).

• Sole Proprietorship :  A sole proprietorship is one in which the business and the owner are considered to be one entity. Therefore, you are personally responsible for all debts and liabilities your HR consulting firm may incur. One benefit of this type of structure is that it’s easy to set up and there are no formal filings required.
• S-Corporation : An S corporation is a type of C Corporation that was designed by the IRS to help small corporations minimize their paperwork while still gaining many of the tax benefits of incorporating. It also offers protection for business owners in case of lawsuits and other liabilities.
• Limited Liability Company (LLC) :  An LLC is a structure in which the company is considered a separate legal entity from its owners. This means that the company is responsible for its own debts and liabilities. This type of structure offers protection for business owners in case of lawsuits.

Read our article comparing the most common consulting business structures .

4. Write an HR Consulting Business Plan

A business plan is a document that outlines your business goals, strategies, and how you plan to achieve them. For an HR consulting business, your business plan should include the following:

• Business Description : Describe what your company does, who your target audience is, and how you will differentiate yourself from the competition.
• Industry & Market Analysis : Detail your research on the industry and what services clients are most likely to want.
• Financial Plan : Outline your estimated income and business expenses for the next three to five years.

Other sections of your plan will answer other key questions such as the following:

• What are your areas of expertise?
• What services can you offer your clients?
• Who is your target audience?
• How will you differentiate yourself from the competition?

Your business plan should also include several sections that detail your company’s history, current financial situation, and future goals. These sections will allow an investor to learn more about your company before they commit to investing in it.

Read our article about how to write a consulting business plan .

5. Apply for the Necessary Permits and Licenses

You must register your HR consulting business as a legal entity with the state in which you plan to do business.

To file your business with the state, obtain the necessary forms from the Secretary of State’s website or local County Clerk’s office. You will be required to pay a small fee for filing your business with the state.

Registering with the federal government may or may not be required. You can register your business on the federal level by obtaining an Employer Identification Number (EIN) from the IRS.

Read our article about obtaining the proper consulting business licenses .

6. Determine Your Budget & Apply for Funding as Needed

As with any business, you will need to use your own capital to finance the initial stages of your HR consulting company.  Your budget may also include several other costs including marketing expenses and the salary you wish to pay yourself.  

After determining how much money you will invest in starting your business, review some options for financing your business.  Here are several financing options that may be available to you:

• SBA Loans : The Small Business Administration (SBA) is a government agency that provides financial assistance to small businesses in the U.S.  
• Bank Loans : Many small business owners are able to secure loans from their local banks. Often, you can borrow money for any purpose that relates to the growth of your company.
• Friends and Family : You can consider getting loans and/or equity investments from friends and family members.
• Angel investors : Angel investors may provide debt or equity funding to you.

Read our article about the costs associated with starting a consulting business to help you determine if funding is needed.

7. Get the Technology & Software Needed to Run Your HR Consulting Company Efficiently

As a human resources consulting firm, you will need different types of technology to complete projects and keep track of your company’s operations. To simplify the process of starting a consulting business, we’ve provided a list below detailing some items that you’ll need:

Computers : Even if most of your work is done remotely with clients on the other side of the country or world, you will need at least one computer that is dedicated to your human resources consulting firm.

Software : Software is an essential component of any consulting business. The right software can help you manage projects, track expenses, and communicate with clients more effectively.

Here are some popular software platforms that may be beneficial to your business:

• Microsoft Office : This software suite includes a variety of applications that can help you manage your company, including Word, Excel, and PowerPoint.
• QuickBooks : This software is designed for small and medium-sized businesses and can help you track income and expenses, create invoices, and manage payroll.
• Basecamp : This project management software can help you manage multiple projects simultaneously and keep track of deadlines and milestones.
• Gmail : Google’s email platform offers several features that can be helpful for many businesses, including the ability to access the same email from multiple devices.
• CRM : Customer relationship management software can help you track customer communication, manage leads, and create reports that detail your sales activities. 

Other software specific to human resources consulting may include:

• ATS (Applicant Tracking System)
• Time & Attendance Software
• ERP (Enterprise Resource Planning) Software

Read our article about the technology and software you need to run a consulting business .

8.  Market Your Human Resources Consulting Firm to Potential Clients

Once you’ve established your human resources consulting firm, the next step is to market it to potential clients.

Here are some common marketing strategies used for human resources consulting firms:

• Networking : One of the best ways to find clients is to network with individuals and businesses who may be interested in your services. Get involved in industry organizations, attend trade shows, and meet with other human resources professionals in your field.
• Online marketing : Marketing your business online, such as through a business website and pay-per-click and/or social media marketing, can help you reach a larger audience looking for your services.
• Website : A website is an essential part of any marketing plan. Make sure your website is professional and easy to navigate, and include a page that describes your services and how you can help businesses.
• Blogging : A blog can be a great way to share your expertise with other businesses and attract new business. Write blog posts that are relevant to your industry and target audience, and include links to your website and social media profiles.

You should also consider ways to incentivize potential customers to choose you over other human resources consulting firms. Some incentives that work well include:

• Lower rates : Many consulting businesses offer lower rates on their services to attract new clients.
• Discounts on services : Offering discounts on certain projects may help you win bids against other companies.
• Free consultation : Providing prospective clients with a free consultation can help them determine if your company is the best one for their needs.

Learn more about how to market your consulting business .

9.  Establish a Price Structure and Billing System

There are a few factors to consider when establishing your price structure:

• Hourly rates : Charging by the hour is a common way to price consulting services. This allows clients to budget for your services and gives you the flexibility to charge more for complex projects.
• Project rates : Charging a flat fee for a project can be beneficial for both the client and the HR consultant. It ensures that the client knows what they are paying upfront, and it allows the human resources consultant to charge more for more complex projects.
• Retainers : A retainer is a set amount of money that the client pays upfront for services. This can be a good option for clients who need regular consulting services.

No matter which pricing structure you choose, be sure to clearly communicate it to your clients. Additionally, have a detailed invoice template that includes all the human resources services you provided so the client knows exactly what they are paying for.

10.  Manage Client Relationships and Deliver Projects

After finding new clients and marketing your new HR consulting business, you should begin delivering the projects and getting paid. This means managing client relationships and making sure that clients are happy with your work. Some of the ways to manage relationships with your human resources clients include:

• Regular communication : Keep in touch with your clients on a regular basis, whether it’s through email, phone calls, or face-to-face meetings. This will help you stay on top of their needs and ensure that they are satisfied with your services.
• Detailed invoices : Make sure to send clients detailed invoices after every project. This will help them understand what they are paying for and how their money is being spent.
• Client surveys : periodically send out client surveys to get feedback on your services. Use this feedback to improve your business and satisfy your clients.

Delivering quality projects is essential to maintaining happy clients. Some tips for delivering high-quality projects include:

• Having a clear understanding of the client’s needs : Be sure to clarify the client’s needs before starting any project. This will help you deliver what they are looking for and prevent misunderstandings.
• Setting timelines : Always set timelines for projects and stick to them. This will ensure that projects are completed on time and within budget.
• Using a project management software : A project management software can help you keep track of all the details related to a project. This will help you stay organized and ensure that all the tasks associated with a project are completed on time.

Learn more about how to effectively manage client relationships .

Starting an HR Consulting Business FAQs

Why start a human resources consulting business.

There are many reasons why starting an HR consulting business might be a good idea. Here are a few:

• Your HR experience and expertise support your interest in assisting other businesses. 
• The potential income opportunity associated with running your own HR consulting business is in line with your personal goals. 
• As the owner of your HR firm, you’ll have the flexibility to set your hours and create your desired work environment.

What is Needed to Start an HR Consulting Business?

There are a few things you’ll need to start an HR consulting business:

• Robust knowledge of HR 
• Business acumen and experience in marketing, accounting, and operations
• The ability to sell yourself and your services
• Skills in project management and communication

What are Some Tips for Starting an HR Consulting Company?

The following tips can help you to start an HR consulting business:

• Market yourself : This means creating a strong brand and marketing yourself to your ideal clients.
• Select the right pricing structure : You’ll need to decide what type of pricing structure you want to use – hourly, retainer, or project-based.
• Create detailed invoices : Make sure to send your clients invoices after every project that detail what services were provided.
• Set up a project management system : This will help you keep track of all the details related to each project and ensure that all tasks are completed on time.
• Manage client relationships : Keep in touch with your clients on a regular basis and make sure they are satisfied with your services.
• Deliver high-quality projects : This will help you maintain happy clients and grow your business.

How to Start a Human Resources Consulting Firm

Businesses have certain requirements they must meet when employing workers, and many need help adhering to legal regulations and overcoming practical challenges. When they need help, businesses that don’t have in-house HR departments turn to human resources consulting firms. A human resource consulting firm business may help other businesses with employee handbooks, personnel forms, benefits programs or any other employment-related issue.

For business owners with experience in the field, starting a human resources consulting firm business can be a promising venture. IBISWorld reports that the HR consulting industry has an annual revenue of $22 billion within the United State, and it has demonstrated a slow but steady growth of 0.6 percent over the past five years.

Learn how to start your own Human Resources Consulting Firm and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a human resources consulting firm by following these 10 steps:

• Plan your Human Resources Consulting Firm
• Form your Human Resources Consulting Firm into a Legal Entity
• Register your Human Resources Consulting Firm for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Human Resources Consulting Firm
• Get the Necessary Permits & Licenses for your Human Resources Consulting Firm
• Get Human Resources Consulting Firm Insurance
• Define your Human Resources Consulting Firm Brand
• Create your Human Resources Consulting Firm Website
• Set up your Business Phone System

We have put together this simple guide to starting your human resources consulting firm. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Human Resources Consulting Firm Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your human resources consulting firm?

Business name generator, what are the costs involved in opening a human resources consulting firm.

The costs to open a human resource consulting firm business are fairly low, totaling between $2,00 and $10,000 . These funds are needed to purchase a computer, office software, a laser printer, a fax machine, and an internet connection. An office may be necessary at times, but business owners can rent a shared coworking space or meet in a cafe when first starting out.

Before opening a consulting firm, however, business owners should either have another source of income that’s stable or a significant amount of personal saving. It can take six months to develop a client base and another six months before consulting begins to provide a paycheck.

Because earning any income from consulting can take so long, many business owners start human resources consulting firms part-time while working at another job. Working in the evenings and on weekends gives business owners an opportunity to grow their client base without giving up their primary income. Once the client base is providing a steady income, they may choose to leave their job and consult full-time.

What are the ongoing expenses for a human resources consulting firm?

The ongoing expenses for a human resources consulting firm business are minimal. They include office supplies, office equipment depreciation, utility costs, and travel expenses if a business owner meets with clients in person.

Who is the target market?

The primary target market for a human resources consulting firm business is small and medium businesses that either don’t have in-house HR departments, or want to downsize and outsource their HR department’s work. Some firms also consult for nonprofit organizations.

How does a human resources consulting firm make money?

A human resource consulting firm business makes money by selling consulting services to other companies. Most firms charge an hourly fee, and some may be on a retainer for certain clients.

The average cost for a human resources consultant ranges from $99.52 to $184.74 per billable hour . Specialists will tend to be toward the higher end of this range, while generalists will likely be closer to the lower end because of the increased competition they face.

How much profit can a human resources consulting firm make?

Human resources consultants can earn a substantial income. In a full day with 8 billable hours, a consultant might bring home between $800 and $1,472. Of course, not every day will have 8 billable hours in it.

How can you make your business more profitable?

Human resources consultants who write articles for magazines and newspapers might earn a little side income while pursuing these marketing efforts. Additionally, business owners can write ebooks or traditional books on their areas of expertise.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your human resources consulting firm is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a human resources consulting firm business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Certificate of Occupancy

A human resources consulting firm business is generally run out of an office. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a location :
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a ___ business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
• If you plan to purchase or build a location :
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your XXX business will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Human Resources Consulting Firm needs and how much it will cost you by reading our guide Business Insurance for Human Resources Consulting Firm.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a human resources consulting firm

Networking at local business events and with area business organizations can help business owners develop relationships with potential clients. These efforts can be complemented with direct mailings and cold calling.

How to keep customers coming back

Business owners can set themselves apart from the competition and further establish themselves as specialized experts by writing newspaper and magazine articles, and by presenting to area business organizations.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

Obviously, business owners who want to position themselves as human resources consultants must be knowledgeable in the field. It’s not enough to be an expert in HR, though.

Consultants must also be capable salespeople , for bringing on new clients forces business owners to sell themselves. They have to be able to show how their services will help other companies, earn the trust of those companies’ decision makers and ultimately, secure a consulting contract.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a human resources consulting firm?

Human resources consultants spend time interacting with clients and working alone. Business owners can expect to be in regular contact with clients, connecting via email, fax, phone, and in-person meeting. When not talking to clients, business owners often work alone researching issues and assembling materials.

What are some skills and experiences that will help you build a successful human resources consulting firm?

As mentioned, business owners must be knowledgeable in current human resources issues and how they’re solved.

Prospective business owners who would like to bolster their knowledge in a specific area may want to take an online HR course. ECornell , Study.com and other organizations offer courses on particular subjects. Some other institutions, such as the University of Phoenix , have certificate programs. For the highest level of education in the field, business owners can complete a bachelor’s degree or master of business administration at an accredited university .

Classroom education alone, however, may not sufficiently qualify prospective business owners for work as an HR consultant. Most people who successfully start HR consulting firm businesses have experience working in HR, and many have worked in the industry for decades.

What is the growth potential for a human resources consulting firm?

A human resource consulting firm business can be a small business run by one person, or it can grow to be a large international company. Burr Consulting, LLC in New York is an example of a small firm that has one consultant. Mercer is a much larger consulting firm, with operations in more than 130 countries.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a human resources consulting firm?

There are many human resources consultants who provide general consulting services, which can make attracting clients difficult. To differentiate themselves, business owners should specialize in one or two areas of HR consulting that are in demand.

Colin McAndrew , an HR consultant in the United Kingdom, did just this by offering overseas consulting services. He had worked in several countries before opening his own consulting firm, and he has leveraged this experience to attract U.K.-based companies that have operations in multiple countries.

How and when to build a team

Many human resources consultants never hire an employee, while some choose to hire only support staff to help manage their office. A few eventually bring on additional consultants as their client base grows.

Useful Links

Industry opportunities.

• Discover more Consulting based Business Ideas

Real World Examples

• The Arnold Group Human Resources Consulting
• HR Collaborative

Have a Question? Leave a Comment!

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Here's how you start a profitable hr consulting practice.

Embarking on a career as a human resources consultant can be an incredibly rewarding venture for those with a knack for people management and a passion for optimizing workplace dynamics.

Whether you're a seasoned HR professional aiming to leverage your expertise independently or someone with a strong background in organizational behavior looking to make a mark in the industry, becoming a human resources consultant requires strategic planning and commitment.

In this blog post, we'll navigate you through the critical steps of launching your career as a human resources consultant, from developing your niche to acquiring your first clients.

How you should prepare to start an HR consulting practice

Market research and concept, choose a niche.

Choosing a niche or concept is one of the first steps in starting a human resources consultancy because it determines the specific services you'll offer, the clients you'll target, and the approach you'll take to manage human capital.

This decision will influence your branding, marketing strategy, pricing, and the overall direction of your consultancy. A well-defined concept can help you differentiate your services in a competitive market and attract clients who are looking for the particular expertise you offer.

In essence, selecting the right concept is like choosing the path your consultancy will take in the vast landscape of human resources management.

To assist you in this crucial decision, we have summarized the most popular concepts for a human resources consultancy in the table below.

Pick an audience

As a human resources consultant, the services you offer should be tailored to the specific needs of the audience you are targeting.

For instance, if you aim to serve startups and small businesses, you might focus on offering flexible HR solutions that can scale with a growing company. This could include setting up basic HR processes, providing training on best hiring practices, or offering on-demand HR support.

Conversely, if your target audience is large corporations, your consultancy might specialize in more complex HR issues such as change management, leadership development, or international labor law compliance. Your office might be located in a business district, and your approach would likely be more formal and data-driven.

Understanding your audience is crucial because it shapes the HR services you provide, your marketing strategy, and even the way you interact with clients. It's similar to choosing a present; you consider what the recipient needs or prefers before making a selection to ensure it's well-received.

Moreover, knowing your audience enables you to communicate with them more effectively. If you're aware of who you're trying to reach, you can determine the best channels to promote your HR consultancy services. For example, if you're targeting startups, you might network at startup events or advertise on platforms frequented by entrepreneurs.

In our guide for human resources consultants , we have outlined different customer segments that could be relevant for your consultancy business.

To provide you with a clearer idea of potential audiences for your HR consultancy, we've detailed a few typical examples below.

Get familiar with the industry trends

As a human resources consultant, staying abreast of the latest trends in the industry is crucial for providing relevant and effective services to your clients.

Emerging trends in human resources reflect the evolving landscape of the workplace and the workforce. By aligning your consulting services with these trends, you can offer innovative solutions that address current challenges and opportunities within organizations.

For instance, we regularly update our business plan for human resources consulting to include the latest trends and practices. This ensures that our clients are well-equipped to handle the dynamic nature of employee management and organizational development.

One significant trend is the increasing emphasis on employee well-being and mental health support in the workplace. Companies are seeking HR consultants who can help them develop programs that promote a healthy work-life balance and provide resources for mental health.

Another trend is the integration of artificial intelligence and automation in HR processes. This includes using AI for talent acquisition, employee onboarding, and even to provide predictive analytics for workforce planning.

Additionally, there's a growing focus on diversity, equity, and inclusion (DEI) initiatives. HR consultants who can assist organizations in creating a more inclusive culture and diverse workforce are in high demand.

Remote work and flexible scheduling have also become more prevalent, requiring HR consultants to help companies adapt their policies and management practices to support a distributed workforce.

We have compiled a list of more trends in the table below.

However, there are also some declining trends.

For example, traditional, one-size-fits-all training programs are losing favor as companies seek more personalized and flexible learning solutions for their employees.

Also, with the rise of remote work, the traditional 9-to-5 office-based work model is becoming less prevalent, and HR consultants need to adapt their services accordingly.

Finally, with the increased focus on data privacy, companies are moving away from invasive monitoring practices and looking for HR consultants who can help them balance employee privacy with performance tracking.

Choosing the right location

Selecting the optimal location for your human resources consultancy is a strategic decision that can significantly influence your firm's success. It requires careful consideration of several key factors.

Begin by analyzing the local business landscape. Understanding the types of businesses in the area can help you tailor your services to meet their needs. For instance, if the region is known for its tech startups, you might focus on offering recruitment and talent management for tech professionals. If the area is home to many corporate headquarters, your consultancy could specialize in executive search and leadership development.

Professional visibility and accessibility are crucial. A location that's prominent and easy to reach for business clients is essential. Being situated in a business district or near other professional services can increase your consultancy's exposure to potential clients.

While you want to be accessible to your clients, consider the convenience of your location for your own employees as well. Proximity to public transportation, ease of access by car, and available parking are all factors that can affect your team's commute and, by extension, your operation's efficiency.

Competition can be an indicator of demand but also poses challenges. Establishing your consultancy in an area with few HR firms can provide an opportunity to capture the market. However, being in a location with some competition can also be advantageous, as it suggests a demand for HR services.

The cost of office space is a significant factor. Prime locations in business districts often come with higher rents, so you should ensure that the potential for client engagement justifies the expense. A balance must be struck between a prestigious address and the sustainability of overhead costs.

Negotiating favorable lease terms can have a substantial impact on your consultancy's financial well-being. This might include securing a lease with renewal options, negotiating limits on rent increases, or obtaining a period of reduced rent at the beginning to alleviate initial costs.

Consider the growth potential of the area. Is the business community thriving, with new companies opening that could use your services? The possibility of scaling up your office space in the future without relocating can be a significant advantage as your consultancy grows.

Market research and demographic analysis tools can offer valuable insights into the best locations for your HR consultancy. These tools can help pinpoint areas with a high concentration of businesses that require HR services.

The choice between a central business district and a suburban office park depends on your target clientele and operational model. Central locations offer greater visibility and proximity to potential clients but come with higher costs and potentially more competition. Suburban areas might offer more affordable space and less competition but could require additional marketing efforts to attract clients.

Being near business hubs, conference centers, or educational institutions can provide a steady stream of potential clients, especially if your consultancy offers specialized services that cater to the needs of these organizations.

Understanding local business regulations and compliance requirements is essential to ensure that your chosen location is suitable for an HR consultancy. Adhering to these regulations from the outset can prevent costly legal issues down the line.

Finally, assessing the long-term viability of a location is critical. Consider upcoming developments in the area that could impact your business, either positively by increasing your client base or negatively by intensifying competition or raising operational costs.

Startup budget and expenses

Calculate how much you need to start.

On average, the initial capital needed to start a human resources consulting business can vary significantly, ranging from as low as $5,000 to $15,000 for a home-based or virtual operation to $20,000 to $50,000 for a more established firm with a physical office space .

If you want to know the exact budget you will need for your own human resources consulting firm and also get a full detailed list of expenses, you can use the financial plan we have made, tailored to human resources consulting businesses . This excel file is actually very user-friendly and it will give you an instant and full detailed analysis of your future project.

The budget can vary the most due to the location of the consulting firm. Prime office locations in high-traffic business districts tend to have higher rental costs, which can significantly increase startup expenses.

The scale of the consulting services also plays a crucial role in determining the initial investment. A larger firm not only increases rent but also requires more staff, marketing, and resources, leading to higher operational costs.

The quality of your tools and software is another significant factor. High-quality, industry-standard software can be expensive but can save time and improve service quality. Conversely, starting with basic or free tools can reduce initial costs but may limit your capabilities and efficiency.

If the available capital is limited, it's still possible to start a human resources consulting business, but careful planning and prioritization are crucial. The very minimum budget could be around $3,000 to $7,000 if you work from home, minimize the scale of your operation, use free or low-cost software tools, and handle most of the work yourself. This approach requires a strategic focus on a niche market to reduce complexity and costs.

To make the most of a limited budget, consider the following tips.

Identify all your expenses

The expenses when starting a human resources consultancy include office setup, licensing and permits, insurance, marketing and advertising, technology and software, professional training and certifications, and a reserve for unexpected expenses.

Setting up an office space can be a significant expense, which includes furniture, office supplies, and possibly a lease on a physical location. Costs can range from $2,000 to $20,000, depending on whether you choose a home office, shared workspace, or a dedicated office space.

Licenses and permits are necessary for legal operation and compliance with local regulations. Costs can vary but typically range from a few hundred to a few thousand dollars. This includes business registration and any specific HR consultancy licenses that may be required.

Insurance is essential to protect your business against liability, errors and omissions, and other potential risks. Essential policies include professional liability and general business insurance. Annual premiums can range from $1,000 to $5,000 or more, depending on your coverage levels and the scale of your consultancy.

Allocating funds for marketing and advertising is crucial for building your brand and attracting clients. Initially, you might spend between $500 to $3,000 on marketing efforts, including social media advertising, networking events, and creating a professional website. The amount can vary based on your strategy and the competitiveness of your market.

Investing in technology and software for client relationship management (CRM), project management, and accounting software is important. Costs can range from $500 to $5,000, depending on the sophistication of the systems you choose. Subscription-based services may have ongoing monthly fees.

Professional training and certifications are critical in the HR field to ensure credibility and up-to-date knowledge. Setting aside $1,000 to $5,000 for initial certifications and ongoing professional development can help maintain a competitive edge.

Finally, setting aside a reserve for unexpected expenses or emergencies is crucial. A good rule of thumb is to have at least three to six months' worth of operating expenses saved. This can cover unforeseen legal issues, loss of a client, or shortfalls in cash flow.

Here is a summary table to make it easier to digest. For a full breakdown of expenses, please check our financial plan for human resources consultancies .

Business plan and financing

Make a solid business plan.

You may have heard it time and again, but it bears repeating: crafting a business plan when launching a human resources consultancy is indispensable.

Why is this the case? A business plan acts as a strategic blueprint for your venture, detailing your objectives, methods for achieving them, and the potential obstacles you may encounter. A meticulously prepared business plan not only keeps you organized and on track but is also crucial if you're seeking funding from investors or financial institutions, as it showcases the feasibility and prospective profitability of your consultancy.

The essential elements of a human resources consultancy business plan include market analysis, financial planning, and operational strategy, among others. Market analysis is vital to comprehend your target clientele, their needs, and the competitive environment. This involves investigating trends in the HR industry, pinpointing your primary competitors, and discovering a niche or unique value proposition that distinguishes your consultancy from others.

Financial planning is another pivotal component. This section should detail your anticipated revenue streams, such as consulting fees, retainer agreements, and project-based income. It should also cover your direct costs, such as salaries for staff or contractors, marketing expenses, and overheads. Additionally, it should encompass projections for profit and loss, cash flow, and a break-even analysis. Financial planning offers you and potential backers a transparent view of your consultancy's fiscal health and expansion prospects. You will find all of this in our financial plan for a human resources consultancy .

While the structure of a human resources consultancy business plan shares commonalities with other business plans, the focus on certain areas may vary.

For instance, an HR consultancy will emphasize service development (tailoring services to meet client needs), knowledge of employment laws and regulations (ensuring compliance and advising clients accordingly), and client relationship management (building and maintaining strong relationships with clients). Additionally, showcasing expertise in specific HR areas, such as talent acquisition, employee development, or compensation and benefits, is crucial.

To succeed and create an effective HR consultancy business plan, you should conduct in-depth research and maintain realistic financial projections and capabilities. Engage with potential clients to understand their HR challenges, preferences, and readiness to invest in your services. Also, consider the scalability of your business model and how you might broaden or refine your services over time.

In the case of an HR consultancy, particular attention should be given to establishing a robust brand identity and marketing strategy that connects with your target audience. Emphasizing your expertise, the results you deliver, or the personalized approach you take can set your consultancy apart in a competitive field.

Success depends not only on the quality of your HR services but also on thorough planning, understanding your market, managing finances astutely, and executing your operational strategy with precision.

Remember, a business plan is not a static document but a dynamic one that should be revisited and revised as your HR consultancy grows and adapts.

Get financed

Starting a human resources consultancy but finding yourself short on funds? Don't fret, there are numerous financing avenues available to you.

Financing for your HR consultancy can come from various sources: attracting investors, securing loans from banks or financial institutions, and applying for grants or subsidies.

Each financing method comes with its own set of benefits and things to consider.

Attracting investors means you'll be raising capital by offering a share of your business in return for their investment. This is advantageous because it doesn't require immediate repayment like a traditional loan would.

However, it does mean parting with a percentage of your company's equity and possibly some degree of control over business decisions.

For an HR consultancy, this could be a strategic move if you're looking to scale quickly or if you need substantial initial capital for state-of-the-art software or a prestigious office location. To persuade investors, you'll need a robust business plan that shows growth potential, profitability, and a deep understanding of the HR industry.

Securing a business loan is another common financing strategy.

This option allows you to maintain complete ownership of your consultancy, but it does require paying back the principal with interest. Loans can be utilized for a variety of purposes, such as acquiring HR management systems, covering initial operational costs, or funding office space improvements.

Banks often ask for a down payment or collateral, which can range from 15% to 25% of the loan amount. It's crucial to balance the proportion of your budget financed externally to avoid overwhelming your consultancy with debt. Ideally, your projected cash flow should easily cover loan repayments while still allowing for business growth and operational costs.

Grants or subsidies are less common but can be a valuable resource.

These funds are typically provided by government bodies or non-profit organizations to support small businesses and can be particularly accessible for consultancies that focus on workforce development or diversity initiatives. While they don't need to be repaid, they are competitive and often come with specific requirements.

For an HR consultancy, grants might not be the most reliable primary source of funding but can be an excellent way to supplement other financing for particular projects or initiatives.

To effectively secure financing, whether from lenders or investors, it's imperative to prove the viability and profitability of your consultancy.

This means crafting a comprehensive business plan that includes market analysis, a clear definition of your target market, detailed financial projections, and an effective marketing strategy. Your business plan should showcase what makes your HR consultancy unique, such as specialized services, a strong brand, or strategic partnerships.

Lenders and investors will judge your consultancy based on several factors, including your creditworthiness, industry experience, available collateral, and the strength of your business plan.

They'll examine your financial projections to determine if you can generate sufficient revenue to cover operating costs, repay debts, and turn a profit. Demonstrating a comprehensive understanding of the HR industry, including trends, client needs, and competitive positioning, will bolster your case.

Below is a summary table of the various financing options mentioned for starting an HR consultancy, along with their advantages, considerations, and potential uses:

Legal and administrative setup

Permits and licenses.

Starting a human resources consulting firm involves meticulous planning and compliance with various regulations and requirements to ensure the legality and credibility of your services, as well as to safeguard your business.

The specific permits, licenses, professional standards, inspection schedules, consequences of non-compliance, and insurance policies you'll need can differ based on your location, but there are common guidelines that are applicable in many areas.

First, you'll need to secure the necessary business permits and licenses.

This typically involves obtaining a general business license from your city or county. Depending on the services you offer, you may also need specific professional licenses that demonstrate your expertise in human resources, such as certifications from the HR Certification Institute (HRCI) or the Society for Human Resource Management (SHRM).

It's crucial to consult with your local government and professional regulatory bodies to understand the specific requirements for your area and field.

As a human resources consultant, you must adhere to professional standards and best practices. This includes maintaining confidentiality, providing accurate and lawful advice, and staying informed about the latest labor laws and regulations. While you may not have regular inspections like a food establishment, your adherence to these standards is often reviewed through client feedback, audits, or during contract renewals.

Non-compliance with professional standards can lead to consequences such as loss of certification, damage to your reputation, and potential legal action from clients. It's essential to take these standards seriously and ensure your consulting practice is in full compliance with all applicable laws and ethical guidelines.

Insurance is another critical aspect of protecting your human resources consulting business. At a minimum, you'll need professional liability insurance, also known as errors and omissions insurance, to cover legal costs and damages if you are sued for negligence or providing incorrect advice.

General liability insurance is also important to cover accidents or injuries that may occur in your office. If you have employees, workers' compensation insurance will likely be required by law to cover injuries or illnesses that occur as a result of their work.

Additionally, considering cyber liability insurance might be wise, especially if you handle sensitive employee data, to protect against data breaches and cyber-attacks.

By understanding and adhering to these requirements, you can establish a reputable and legally compliant human resources consulting firm.

Business Structure

The three common structures for starting a human resources consulting business are LLC (Limited Liability Company), partnership, and sole proprietorship. Each has distinct features and implications for your consulting practice.

Please note that we are not legal experts (we specialize in business and financial planning) and that your choice should be based on how much risk you're willing to accept, how you prefer to handle taxes, and your plans for growing and possibly selling your human resources consulting business.

In simple terms, a sole proprietorship is the easiest to set up and manage but carries personal liability. A partnership allows for shared responsibility and resources but requires clear agreements to manage risks and decision-making. An LLC offers a balance of personal liability protection and flexibility, making it a popular choice for many professional services firms.

Consider your long-term goals, and consult with a financial advisor or attorney to make the best choice for your human resources consulting business.

We’ll make it easier for you, here is a summary table.

Getting started to start an HR consulting practice

Offer development, design and lay out.

Designing and laying out your human resources consultancy for operational efficiency and an enhanced client experience requires meticulous planning and strategic implementation.

Let's explore how you can accomplish this, focusing on client engagement, balancing technology needs with budget, and ensuring privacy and confidentiality.

Firstly, envisioning client engagement is crucial.

Your consultancy's design should facilitate a welcoming and professional atmosphere from the moment clients enter. The reception area should be easily identifiable, offering a comfortable space for clients to wait. Private meeting rooms should be accessible, soundproof, and equipped with the necessary technology for presentations and video conferencing. This flow should be seamless, minimizing wait times and ensuring a smooth transition from reception to consultation areas.

This setup not only creates a positive first impression but also supports the consultancy's image as a professional and efficient organization.

Regarding the design to facilitate this engagement, consider the layout's privacy and comfort.

Quiet zones, clear signage, and a logical arrangement of the space promote a sense of confidentiality and focus. The consultation areas should be clearly marked and separate from the reception to avoid disturbances. If your consultancy offers group training or workshops, ensure these spaces are versatile and can be adapted to different setups while maintaining privacy for all participants.

Balancing the need for advanced technology with budget constraints is a challenge many consultancies face.

Start by prioritizing essential technology that directly impacts the quality of your services, such as secure computer systems and reliable video conferencing tools. These are worth investing in because they are the backbone of your consultancy's operations. For other items, consider cost-effective solutions or subscription-based software that offers scalability and updates.

Additionally, plan for technology that offers flexibility and efficiency, like cloud-based HR management systems or integrated client relationship management (CRM) platforms, to get the most value for your investment.

Privacy and confidentiality in the consultancy layout are non-negotiable. Your design must include private meeting rooms and secure storage for sensitive documents. Install security systems and use privacy screens where necessary to maintain client confidentiality.

Specific protocols for data handling, storage, and consultation are crucial for privacy and compliance. Implement a system that ensures all client information is stored securely and is accessible only to authorized personnel, with strict controls on data sharing and processing.

Train your staff thoroughly in privacy practices, emphasizing the importance of secure logins, encryption where appropriate, and the avoidance of data breaches.

Regularly review and update these protocols to comply with local privacy regulations and best practices.

Craft your offer

Your services and expertise will be the cornerstone of your success as a human resources consultant.

To begin, it's crucial to understand the specific challenges and needs of your target market. Engage directly with potential clients through networking events, LinkedIn conversations, and industry forums, and conduct indirect research by analyzing market trends and observing what successful HR consultants are offering.

With a solid grasp of your target market's needs, you can tailor your services to address their unique HR challenges. This might include specialized recruitment strategies, employee engagement programs, or leadership development initiatives.

Emphasizing local market knowledge and industry-specific expertise can significantly enhance your appeal to potential clients. Forge relationships with local businesses and industry leaders to stay informed about the workforce dynamics in your area. This insight allows you to offer bespoke HR solutions that are particularly relevant to your clients' contexts. Offering targeted services can also attract clients who are seeking the most informed and up-to-date HR advice.

To differentiate yourself in a crowded market, focus on delivering unique and high-quality consulting services.

This can be achieved by developing niche expertise that is scarce in the market, such as HR analytics, diversity and inclusion strategies, or expertise in emerging employment laws. Sharing case studies and testimonials that demonstrate the impact of your work can also add a compelling layer to your service offering.

Maintaining high standards in your consulting practice involves setting clear expectations and delivering consistent results.

This includes creating detailed project plans with measurable objectives, providing comprehensive training and resources for your team, and conducting regular performance reviews. Consistency is essential for building credibility with your clients, as they will come to rely on the quality and reliability of your advice and services. Invest in continuous professional development and the latest HR tools and technologies to ensure you are providing cutting-edge solutions.

Furthermore, leveraging client feedback is vital for the ongoing enhancement of your HR consulting services. Establish mechanisms for feedback, such as follow-up meetings, online questionnaires, and professional social media interactions, to gauge client satisfaction and identify areas for improvement.

Be receptive to constructive feedback and prepared to adapt your services based on client needs. This not only aids in refining your offerings but also demonstrates to your clients that you are committed to their success, which can lead to long-term partnerships and referrals.

Determinate the right pricing

As a human resources consultant, setting the right prices for your services is crucial to ensure profitability while keeping your clients satisfied. Here's a strategy to achieve this balance.

Firstly, you must understand your costs thoroughly. This includes direct costs such as any assessments or tools you use, as well as indirect costs like office space, utilities, and administrative expenses. Additionally, factor in the cost of your time and expertise, which is your most valuable asset.

Once you have a clear picture of your costs, research the market to understand the going rates for HR consulting services. This will give you a benchmark, but remember, you don't necessarily need to match these prices. Your unique value proposition may justify higher rates.

Understanding your target clients' budget constraints and value perception is essential. Gather this information through discussions, surveys, or by analyzing market trends. This will help you determine the price points that your clients are comfortable with and see as fair for the value you provide.

Psychological pricing can also be effective for HR consulting services. For instance, setting a project fee at $4,950 instead of $5,000 can make the service seem more competitively priced, even though the difference is relatively small.

However, you should maintain the perceived value of your expertise. Underpricing can lead to a perception of lower quality services.

The perceived value of your HR consulting services can be enhanced by your reputation, the quality of your work, and the results you deliver for your clients. For example, having a strong track record, offering personalized solutions, and providing exceptional client support can justify premium pricing.

Consider offering package deals or retainer agreements for ongoing services, which can provide value to both you and the client. For example, a monthly retainer for ongoing HR support might be priced at a premium but offer the client peace of mind and consistent support.

When introducing new services, consider introductory pricing to encourage clients to try them. Once you've demonstrated the value of these services, you can adjust the pricing based on their success and client feedback.

For different service delivery methods, such as in-person consulting versus virtual consulting, take into account the cost differences. Virtual services may incur lower costs and can be priced accordingly, potentially offering savings to your clients as well.

Lastly, be cautious with discounting your services. While occasional promotions may attract new clients, frequent discounts can undermine the perceived value of your expertise. Instead, focus on demonstrating the ROI of your services to justify your rates.

By carefully considering these factors, you can set a pricing strategy that reflects the value of your HR consulting services and meets your business goals.

Manage relationships with your customers

Poor relationships with clients or a weak talent pool could undermine your human resources consultancy in no time.

On the contrary, building strong connections with both clients and candidates will ensure the consistent delivery of high-quality HR services.

Regular communication, understanding client needs, and expressing appreciation for their business can foster loyalty and reliability. Be transparent about your capabilities and methodologies, and whenever possible, visit their operations. This deepens your understanding of their corporate culture and challenges, enabling you to tailor your services more effectively.

Additionally, consider retainer agreements for key clients to secure a steady revenue stream and guarantee service availability, but also maintain a network of potential clients to mitigate risks of business fluctuations.

For managing a talent pool, database management techniques are essential. This approach ensures that the information of candidates is kept up-to-date, reducing the risk of presenting outdated profiles. Regularly monitor your talent pool to adjust according to the market demand, avoiding over-reliance on a limited number of candidates and minimizing the risk of not being able to fill positions. Implementing a just-in-time (JIT) recruitment strategy can also be effective, where candidates are sourced and presented as needed for client vacancies, though this requires precise market forecasting.

Technology can significantly improve talent pool management and reduce mismatches in a human resources consultancy.

Implementing a candidate management system that integrates with client relationship management (CRM) systems allows for real-time tracking of candidate availability and client needs. This technology can help predict talent demand more accurately, streamline recruitment processes, and identify trends that can inform service development and strategic advising.

Additionally, digital tools can facilitate better communication with clients and candidates, enabling more efficient matchmaking and collaboration.

Scaling HR consultancy services presents challenges such as maintaining service quality, managing increased costs, and ensuring client satisfaction. Address these challenges by standardizing service offerings and processes, training staff thoroughly, and investing in technology that can increase efficiency without compromising service quality.

Scaling up also means more extensive client and candidate management, so negotiate pricing with software providers for bulk licenses without sacrificing functionality. Client satisfaction becomes even more critical as your consultancy grows, requiring strict adherence to service standards and more frequent feedback collection.

Implementing effective cost control measures involves scrutinizing every aspect of your consultancy's operations and services. Regularly review and negotiate with software providers to ensure you're getting the best prices without compromising functionality.

Also, consider alternative sourcing strategies that may offer cost savings or efficiency advantages. Utilize technology to track and analyze costs, service delivery, and client satisfaction levels to identify areas for improvement. Reducing inefficiencies not only cuts costs but also aligns with professional best practices, appealing to clients who value effective and streamlined HR solutions.

Hire the right people

When starting a human resources consultancy, you should be strategic about your hiring process. Initially, you may not need a large team, but certain key roles should be filled to ensure a solid foundation for your business.

At the core, your HR consultancy will need professionals who specialize in recruitment, client management, and business operations.

For recruitment, experienced HR consultants who can identify top talent and understand the nuances of various industries are essential. A senior HR consultant or manager with a strong network and the ability to design and implement effective recruitment strategies is crucial.

Client management requires account managers or client relations specialists who can maintain and grow relationships with your business clients, ensuring their needs are met and services are delivered effectively.

For business operations, an operations manager or a business owner-operator who can oversee the day-to-day running of the consultancy, manage staff, and handle administrative duties, including compliance with employment laws and regulations, is vital.

Roles such as specialized recruiters for niche markets, marketing professionals, and additional administrative support may not be necessary from the outset.

These positions can be filled as your consultancy expands and the demand for more specialized services increases. Outsourcing tasks like accounting, digital marketing, and IT support can be a cost-effective strategy, allowing you to focus on your core HR services while utilizing external expertise.

When hiring for key positions, prioritize candidates with a mix of HR knowledge, experience, and a passion for people management.

For HR consultants, look for qualifications in human resources or related fields, as well as practical experience in HR settings. Strong communication and interpersonal skills are crucial for client management roles, along with a track record of maintaining client relationships. For operational roles, seek candidates with experience in HR consultancy management, a solid understanding of business operations, and leadership capabilities.

To ensure a good fit for your consultancy's culture and service standards, consider practical assessments during the hiring process, such as role-playing client scenarios for account managers or case studies for HR consultants.

Look for candidates who demonstrate a genuine passion for human resources and client service, as well as the adaptability required in the dynamic HR industry.

Finding the right candidates with the appropriate HR background and client service orientation can be a challenge.

Leverage professional networks, HR forums, and social media platforms to reach potential candidates. Networking within HR communities and attending industry conferences can also be effective. Consider offering internships or trainee programs to attract emerging talent from HR educational programs.

Here is a summary table of the different job positions for your HR consultancy, and the average gross salary in USD.

Running the operations of your human resources consulting practice

Daily operations.

Streamlining the daily operations of your human resources consultancy can significantly enhance efficiency and client satisfaction. By adopting the right tools and strategies, you can manage your workload more effectively and provide better services.

Firstly, implementing a Human Resource Information System (HRIS) tailored to the needs of HR consultants can greatly improve your operational efficiency.

Look for an HRIS that integrates client management, project tracking, and performance analytics. This integration allows you to monitor ongoing projects, track billable hours in real-time, and maintain a comprehensive database of client information and their employees' details.

Many modern HRIS platforms also offer features like automated report generation, which can save time and ensure accuracy when providing clients with updates and insights.

For project management, you want software that can help you oversee multiple client engagements simultaneously.

The best systems enable you to set reminders for important deadlines, allocate resources effectively, and provide visibility into each project's progress. This helps in ensuring that you meet client expectations and can manage your consultancy's workload without overcommitting.

Effective communication with clients is essential for a successful HR consultancy.

Establish clear communication protocols and set expectations early on regarding project timelines, deliverables, and feedback mechanisms. Building a strong relationship can lead to repeat business and referrals. It's also beneficial to use collaborative tools that allow for seamless information sharing and engagement with clients.

Keeping your consultancy team engaged and productive is about creating a supportive work environment and promoting a culture of continuous improvement.

Regular professional development opportunities, transparent communication of goals and expectations, and constructive feedback can aid in this effort. Acknowledging and rewarding excellent performance also helps in maintaining high morale. Ensure that work schedules are flexible and considerate of your consultants' need for a work-life balance.

Ensuring that every client has a positive experience starts with the professionalism of your consultancy, the quality of your advice, and the service provided by your team.

Train your staff to be knowledgeable, proactive, and client-focused. Encourage them to understand clients' industries and specific challenges, making the consultancy's services feel tailored and valuable.

Maintaining a professional and welcoming office space, with clear branding and a client-friendly atmosphere, also contributes to a positive client experience.

Effective client service policies for an HR consultancy might include a service quality guarantee, clear terms of engagement, and a mechanism for gathering and acting on client feedback.

Make it easy for clients to provide feedback, whether through your website, email, or during meetings. Respond to feedback promptly and constructively, showing that you value their business and are committed to excellence.

Handling client feedback and concerns with care is crucial. Always listen to the client's issues fully before responding. Apologize where necessary and offer a solution or adjustment to the service, such as additional support, a revised strategy, or a discount on future services.

Use constructive criticism as an opportunity to refine your consultancy's offerings or processes. Turning a less-than-ideal situation into a positive outcome can often result in a strengthened client relationship.

Revenues and Margins

Know how much you can make.

Understanding the financial dynamics of a human resources consultancy is crucial for its success.

We have an in-depth article on the profitability of human resources consultancies that you might find useful. Below, we'll provide a summary of some key points.

One important metric for a human resources consultancy is the average revenue per client engagement.

The average revenue per client engagement for a human resources consultancy can vary widely depending on the services provided.

For generalist HR consultancies that offer a broad range of services, the average revenue per client might be between $5,000 and $15,000 .

Specialist consultancies, which provide niche services such as executive search or compensation analysis, may command higher fees, with average revenues per client engagement ranging from $10,000 to $30,000 .

Consultancies focusing on small to medium-sized businesses might work with smaller budgets but can make up for this with a higher volume of clients, with average revenues per client engagement around $3,000 to $10,000 .

When it comes to overall revenue, this too will vary. You can estimate your consultancy's revenue accurately with our tailored financial plan for HR consultancies .

Consultancies in urban areas may see monthly revenues ranging from $10,000 to over $100,000 , translating to annual revenues of $120,000 to over $1.2 million .

Consultancies in smaller towns or rural areas may have more modest revenue expectations due to a smaller client base, with annual revenues often ranging from $60,000 to $300,000 .

New consultancies in the startup phase may experience lower revenues as they work to establish their client base and reputation. Initial monthly revenues may not exceed $5,000 .

Established consultancies can leverage their reputation and client relationships for higher and more stable revenues, potentially exceeding $500,000 annually .

Specialist consultancies may see variable revenues depending on the demand for their niche services, making it challenging to provide an average range.

Human resources consultancies don't just earn money from direct consulting services. They can diversify their income streams in various ways.

If you're looking for inspiration, here's a table that outlines many different revenue streams for a human resources consultancy.

Understand your margins

As a human resources consultant, understanding the difference between revenue and profit is crucial for the sustainability of your business. you should delve into the expenses and margins to truly gauge your year-end earnings.

Let's explore the gross and net margins, which are key indicators of a consulting firm's profitability.

To calculate your own margins and get a precise figure for your potential profit, you can adjust the assumptions in our financial model designed for human resources consultants .

The typical range of gross margins for human resources consulting services can vary, often ranging from 50% to 70%.

Gross margin is calculated by subtracting the cost of services (COS), which includes the direct costs related to the delivery of consulting services, such as salaries of consultants and direct project expenses, from the revenue generated from consulting fees, then dividing this number by the revenue, and finally, multiplying by 100 to get a percentage.

Net margins, however, factor in not just the COS but also all other expenses a consulting firm incurs, such as office rent, utilities, marketing, administrative expenses, and taxes. This figure is obtained by subtracting all operating expenses from the gross profit.

Net margins offer a more complete view of a consulting firm's profitability and are typically lower than gross margins, with averages often ranging from 10% to 30%, reflecting the tighter profitability after all costs are considered.

Different types of human resources consulting—generalist, specialist, and boutique—can have varying profit margins due to differences in their service models, scale of operations, and client bases. Here is a table to illustrate these differences.

As you might expect, the margins of a human resources consulting firm are significantly influenced by factors such as service mix, pricing strategy, and scale of operations.

A diverse service mix can cater to a wider range of client needs but may increase operational complexity and costs.

Pricing strategy is critical; fees must be competitive yet sufficient to cover costs and yield a profit. Scale of operations can impact cost efficiencies, with larger firms often benefiting from lower per-unit costs due to shared resources.

Ongoing expenses that affect consulting margins include salaries, rent, marketing, and technology costs. Salaries are a major expense, especially for firms that employ highly skilled consultants. Rent can vary greatly by location, and marketing is essential for client acquisition and retention.

Consulting firms that specialize in areas like executive search or organizational development may experience different margin dynamics compared to generalist firms.

While specialist firms can command higher fees, they also face higher operational costs and potentially limited market size, which can impact overall margins.

External factors such as economic conditions, industry trends, and regulatory changes also play a significant role in consulting margins. Economic downturns can lead to reduced demand for consulting services, while regulatory changes can create opportunities for advisory services.

The challenge of maintaining healthy margins in the face of rising operational costs and competitive fee pressures is significant. Consulting firms can address these challenges through efficient cost management, strategic pricing, and investing in technology for productivity enhancements.

Regular monitoring and analysis of financial performance, including gross and net margins, is essential for ensuring the financial health and sustainability of a human resources consulting firm (and you can track all of this with our financial model specifically for human resources consultants ).

Implement a strong marketing strategy

Marketing for a human resources consultancy doesn't have to be an intricate labyrinth. We understand that as a human resources consultant, your focus will be on serving your clients and managing their needs. Therefore, we've crafted a straightforward and impactful marketing strategy, as detailed in our business plan for a human resources consultancy .

Building a strong brand for your consultancy is essential.

Your brand is the embodiment of your reputation and the services you offer. It's not just your business name or the design of your website, but also the professional experience and the quality of your consultancy that clients will come to know. Your brand should mirror the expertise you bring to the table, your commitment to ethical practices, and your dedication to helping businesses succeed. A well-defined brand sets you apart in a competitive industry and helps you cultivate a base of loyal clients.

Begin your marketing plan by identifying your target clientele. Who are the businesses that could benefit most from your services? What are their core needs? Are they small startups, mid-sized companies, or large corporations? Do they need help with recruitment, employee relations, compliance, or perhaps training and development? Understanding your audience is key to tailoring your services and marketing messages.

For promotion, leveraging professional networks and platforms like LinkedIn is crucial for human resources consultants. These platforms are ideal for sharing insightful articles, industry updates, and case studies that demonstrate your knowledge and experience.

Engage with your audience by providing valuable content that addresses common HR challenges or showcases innovative solutions. This not only positions you as a thought leader but also helps potential clients understand the depth of your expertise.

Client testimonials and case studies are powerful tools for building credibility and illustrating the tangible benefits of your services. Sharing success stories can inspire confidence in prospective clients and prompt them to reach out for their own HR needs.

Content strategies that resonate with HR consultancies include discussing best practices, changes in labor laws, effective team-building exercises, and strategies for improving workplace culture. Collaborating with industry experts or participating in webinars can also increase your visibility and authority.

However, you should align your marketing tactics with your consultancy's focus. For instance, if you specialize in executive search, creating content around entry-level recruitment strategies may not be the best fit.

Even with a modest budget, there are effective strategies to attract new clients.

Firstly, consider hosting free workshops or webinars on hot topics in HR. This not only showcases your expertise but also provides immediate value to attendees.

Networking at industry events or through professional associations can also lead to referrals and partnerships.

Partnering with complementary businesses, such as law firms specializing in employment law, can broaden your reach and provide mutual referrals.

Implementing a referral program can incentivize your current clients to recommend your services to others.

Lastly, never underestimate the power of word-of-mouth. Encourage your satisfied clients to share their positive experiences with peers, and consider offering a discount or a value-added service for successful referrals.

Grow and expand

We want you to thrive as a human resources consultant. The insights provided here are designed to help you reach that goal.

Imagine you're already running a successful HR consultancy with a solid client base and robust cash flow. Now is the time to consider how you can scale and expand your services.

There's always potential for greater achievements, and we're here to show you the path to even more success.

Also, please note that we have a 3-year development plan tailored for HR consultants in our business plan template .

Successful HR consultants often possess qualities such as strong communication skills, a keen understanding of human capital, the ability to adapt to various industries, and a knack for problem-solving. These traits are essential as they work on expanding their consultancy.

Before broadening your service offerings, consider the existing market needs, how new services will complement your current portfolio, and the impact on your operations.

Conducting market research is critical. By examining industry trends, organizational needs, and the success of similar services in the market, you can make informed decisions that align with your consultancy's strengths and client expectations.

To evaluate the success of your current operations, look at client retention rates, feedback, and the efficiency of your consultancy. If you consistently secure new contracts, receive positive client testimonials, and operate effectively, it might be time to think about expansion.

Opening additional offices should be based on clear evidence of demand, a deep understanding of the target market, and the financial stability of your current operation.

Franchising your consultancy can be a way to expand with less capital risk, tapping into the entrepreneurial drive of franchisees.

However, it requires a reputable brand, proven consulting frameworks, and the capacity to support franchisees. Establishing owned branches offers more control but demands more capital and hands-on management. Each approach has its pros and cons, and the choice depends on your business objectives, resources, and preferred growth strategy.

Digital channels, including online consulting and webinars, can significantly extend your consultancy's reach. An online presence allows you to serve clients beyond your immediate geographic area, meeting the growing need for flexible HR solutions.

This strategy demands an understanding of digital marketing, the logistics of remote consulting, and maintaining service quality.

Branding is vital as it sets your consultancy apart in a competitive market. A strong, consistent brand identity can build client loyalty and attract new business. Enhance your brand by ensuring that every interaction reflects your consultancy's values and expertise.

Ensuring consistency across different services or locations is challenging but crucial. Achieve this through comprehensive service guidelines, training programs, and quality control measures.

Regular evaluations and fostering a culture of excellence help maintain the standards that made your consultancy successful.

Financial indicators and benchmarks for readiness to expand include consistent profitability, strong cash flow, and meeting or exceeding business targets over a significant period.

Having a scalable business model and the operational capacity to support growth is also essential.

Partnerships with other businesses and involvement in industry events can introduce your consultancy to new clients and sectors. These opportunities allow for networking, community engagement, and increased visibility, contributing to your consultancy's growth.

Scaling your consultancy to meet higher demand involves considerations such as investing in technology, managing a larger team, and possibly expanding your office space. Ensuring that your infrastructure can support more clients without compromising service quality is key.

Finally, it's crucial that your expansion efforts remain aligned with your consultancy's core values and long-term objectives. Growth should not compromise the principles that made your consultancy reputable.

Regularly revisiting your business plan and values can help ensure that your expansion strategies are in line with your vision and mission, preserving the essence of your consultancy as it grows.

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It's time to grow your HR business

• Grow Your Solo HR Business
• Start Your New HR Business
• Grow Your HR Tech Company
• Grow Your Medium-Sized HR Consulting Business
• Start Your HR Business (PROGRAM)
• Grow Your HR Business (PROGRAM)
• HR Business Planning [MASTERCLASS & WORKBOOK]
• How To Make Better Lead Magnets To Attract More Sales Leads [MASTERCLASS & WORKBOOK]
• Beat Your HR Business Blocks [MASTERCLASS]
• Automated Lead-Generation Machine [MASTERCLASS & WORKBOOK]
• HR Marketing Podcast
• HR Business Planning Workbook & Masterclass
• HR Marketing Blog
• How To Start An HR Consulting Business
• How To Price Your HR Services
• Presentation: How Other Companies In The HR Industry Are Bringing In New Business
• Log In (HR Business Accelerator)

How To Start An HR Consulting Business In 2024 – Six Steps To Successfully Launch Your New Independent HR Consultancy

Wondering how to start an HR consulting business in 2024?

Yes, there’s a lot to consider but there’s a lot to be optimistic about too.

Now that the world has moved to hybrid work, there is a global market for new start-up HR consultancies to help employers get the best out of their workforce.

There is plenty of potential business out there in all aspects of HR consulting, including starting a generalist HR consulting business , recruitment business, leadership development consultancy , employee engagement consultancy, Diversity & Inclusion business , training, learning & development, employment law, and so on.

Below are 6 steps to guide you as you think about how to start your own Human Resources consulting business.

FREE DOWNLOAD: How To Start An HR Consulting Business (Summary Guide)

When you join my private newsletter group for HR-related consultants, you’ll get a quick summary of how to start your new HR-related consulting business.

Note that these steps on how to open a Human Resources company are for an independent HR consultant or small new HR consultancy to follow, not for large corporations or well-funded HR Tech startups.

A solo Human Resources consultant or small HR consulting company needs a lean and agile approach and these six steps reflect this need.

How Do You Set Up An HR Consulting B usiness ? [How To Become An HR Consultant]

Here are the six steps to follow when starting your own HR business or when considering how to become an HR consultant:

• Find Your ‘Why’ – Determine your preferred style of business
• Create a lean startup Human Resources consultancy business plan and decide on the legal structure (such as setting up an LLC in the US)
• Plan your cashflow (there will be an initial dip)
• Start building a network now
• Develop a lean startup sales & marketing plan for your HR consulting business
• Start building your online presence now

Below, we’ll look at each step in detail.

First though, you might like to listen to this extract from our HR business marketing podcast, A Better HR Business . . . 

HR Business Accelerator – Client Case Study with Louise Bijesse of UpTalent Consulting.  Louise went through our HR Business Accelerator program and has created an amazing business that suits her lifestyle. In this extract from the podcast, Louise shares why she started her business, how she got her first clients, how she overtook her old corporate salary and grew her team, how she makes time for horse riding, and much more. 

Check out the HR Business Accelerator

Ok, let’s get into the 6 steps to successfully launch your new independent HR consultancy . . .

1. Find Your ‘Why’ – Determine Your Preferred Style of New HR Business

By now, you and all your living relatives will have seen Simon Sinek’s epic speech which seemingly coined the phrase: ‘ Find your Why .’

Before you embark on your entrepreneurial journey, it’s important to pause and reflect on what you want and how you want to achieve it as you ponder how to start an HR consulting company.

Are you looking to build an asset that you can one day sell or are you aiming for more of a freelance lifestyle to create a new career path from your corporate life?

Will you be working towards a highly systemized, highly leveraged business that will expand rapidly and lead to a franchised business model ?

Instead, are you looking to pay the bills and keep the lights on while you work on an exciting new HR Tech product or information product on the side?

Will you be a generalist consultant or do you plan to narrow your focus on a particular skill set or industry such as this HR consultancy for the mining industry or this HR firm for fintech & financial services ?

The Two Things You Must Do If You Want To Start Your Own HR Business

Also, note that different industries and business types have different types of budgets and projects.

It is imperative to understand that starting your own business will be one of the most challenging experiences which will surely push you to your limits in every way, one would need to focus, persevere and be very patient. With that being said, your personal development and growth will be exponential, and the rewards of all the extra hours and hard work is extremely fulfilling and satisfying, especially when your clients are happy. You need to be sure of your service offering from the start and ensure that it is streamlined as far as possible and lastly, choose your partner in business (if you have one) very carefully. Nooraan Shaik – Virtue HR Solutions

A quick meandering side note:

I recently discovered a wonderful new podcast series (thanks to Kanav Abrol of AttendanceBot ) called Business Wars.

In the episode on McDonalds vs Burger King , McDonald’s founder Ray Kroc has a hard time convincing the original owners to expand with a national franchise – they preferred a more simple life based around one restaurant in one location.

They knew their preferred work style. They knew their  Why .

Take time to think about what you really want.

It’s ok to change your plans as you progress but at least reflect on all the options before you start.

Sometimes people go into HR for all the wrong reasons. The best HR professionals truly care about others, are committed to resolving issues in a way that preserves relationships, and quite simply, exemplify the characteristics of good human beings. Many people want to start an HR consulting firm, but to have long-term success, it is essential that you focus on and care about the following: 1. Always put people over policies. 2. Focus on reality, not theory. 3. Understand the businesses you support and focus on adding real value to the business. 4. Be a problem solver and be sure to have answers for clients and their employees. 5. Simplify everything. 6. Focus on what really matters to drive the business forward and don’t get hung up on trivial details. To have true success as an HR leader, focus your energy and abilities on informing, guiding, and caring for the wellness of others. Be supporting, understanding, and be ready to take up the reins and simplify and keep the human in HR. Carrie Luxem. CEO at Restaurant HR Group & CarrieLuxem.com

Want Some Help To Start Or Grow Your HR Business?

2. how to be an hr consultant – create a new hr consultancy b usiness startup plan.

You need a plan that will actually help you, not some lengthy tome that quickly gathers dust in the corner of your office.

With the tech world in the ascendancy , why not take a leaf out of their book and use the Lean Canvas model to plan out your HR consultancy startup?

Start with the target HR client segments and the problems they face and then work through the boxes.

Believe me, I’ve written 30-page business plans, and a one-page lean canvas is a lot more useful.

Most startups fail, not because they fail to build what they set out to build, but because they waste time, money, and effort building the wrong product. I attribute a significant contributor to this failure to a lack of proper “problem understanding” from the start. Once you understand the problem, you are then in the best position to define a possible solution. Ash Maurya. Author of ‘Running Lean’, and Creator of Lean Canvas

Working through this exercise will bring you back to your Find Your Why thinking as you start to consider all the options such as:

• Generalist Human Resources consulting business or niche/specialist?
• Various industries or a small market segment?
• Large employers, small employers, government, or other?
• Small projects vs large projects or retainer work?
• Embedded roles, part-time, or other?

Before starting your HR business, pick a target audience first! Most come up with an idea, a solution first, then hunt for an audience to sell it to afterward. And they make it tough on themselves. I believe an HR business should always start with the audience (e.g. small businesses, HR leaders, non-profit associations, etc.) for your HR business or consulting in mind first…and then come up with a solution to a problem they’re looking to solve. It’s 1000% easier to sell a solution to a specific audience, than to come up with a solution then try to search the right audience. Alan Collins. Founder, Success in HR

Decide on the right legal structure to launch your new HR consulting business

By working through the lean canvas model and understanding who you’ll be serving and how you’ll serve that target audience, you’ll then be in a good position to choose the right legal structure for a new Human Resources consulting business.

Depending on where you are in the world, you’ll have various options to choose from:

• Form a company (Corporation, S-Corporation or LLC in the US )
• Operate your business as an independent HR consultant by establishing a sole proprietorship .
• Contract via freelance sites.
• Run a side hustle after hours through the options listed above.

Whatever you do, get advice from a qualified professional.

If you choose to form a company, talk to your local accountant.

You can also check out the new company formation companies and online accounting firms such as:

• GovDocFiling in the US
• Crunch in the UK
• Accountant Online in Ireland
• Xolo (formerly LeapIn) for Europe
• JustDone (for sole traders and partnerships) in Australia
• And similar companies in other countries

3. How To Open A Consultancy Business In The HR Industor – Plan Your Cashflow

This section might normally go into the business planning stage and look at how to open a consultancy firm but it’s so important that it deserves its own step.

Consulting, in general, can be very lucrative and the HR consulting business model is no exception.

However . . .

When you’re an employee you receive a payslip every month like clockwork.

As an employee, there are no expenses to pay.

That all changes the day you become a new, independent HR consultant.

Suddenly, you have a wide range of set-up costs and recurring expenses .

From the day you start your new Human Resources consultancy, you begin your prospecting for potential clients, pitching your services, and trying to win the project .

You then have to actually do the work .

Only after you’ve done the work (or at some agreed milestone) do you send in your invoice .

Then you wait.

And wait some more.

You will hear all sorts of reasons why the money has not yet arrived. You missed the cut-off for Accounts Payable. They forgot to lodge your invoice or it was incorrectly entered into the system. Mary in Accounts is still on holiday.

And so it goes.

You need a plan. This may include:

• Saving money before you start the new HR business.
• Lining up 3 – 6 months of work before you even hand in your resignation letter to your employer.
• Consider starting part-time or as an HR side hustle (see article for HR side gig ideas ).
• Have entry-level services for quick turnaround and faster invoicing (such as quick audits, small training sessions, single documents draft, etc) as well as larger project work offerings.
• Productizing your knowledge . For example, you could write ebooks or product HR-related templates for employers to use with their staff. You could sell seats on paid webinars like some HR businesses do.
• Convincing your current employer to take you on for a specific project as an external Human Resources consultant.

I think it is important to start in a recruiting firm and be a sponge. I was with two firms for 5 yrs. I started my business at 27 years old. I learned professional , clerical and temp . ALL are very different. The key is to be a good listener, read body language and a detective. Save some $ – it is expensive to start up. Kathleen Bennett. CEO/Owner, Kathleen Ater Personnel

4. HR Consultancy Startup – Start Building A Network Now

Knowing that there will be an initial dip in your income and that it will take time to receive your first payments, you need to start building your referral network before you even launch (or as soon you can after launch).

In my interview with the co-founder of Clinch (a successful HR company), I learned that 90% of their clients came from referrals.

Make a list of family, friends, current and former colleagues, clients and suppliers, and people you’ve met along the way. Obviously, look at your list of LinkedIn connections too.

Get back in touch with people and reconnect . Tell them about your plans and ask for their help or just to keep you in mind.

Before starting a consulting business (or any business), I recommend talking to at least ten people who have started a business in a similar space. Ask them what their biggest surprises have been and what advice they’d give to themselves before starting out. Plus, building relationships with peers in a similar space is a fantastic idea. Running a business can be very lonely, so start building genuine connections early. Amanda Gulino. Founder, A Better Monday

5. Develop A Lean Startup Sales & Marketing Plan For Your New HR Consulting Business

Networking and building an audience aside, now it’s time to write a marketing plan for your HR company .

There are many channels to choose from to acquire new Human Resources consulting clients. These include:

• Search Engine Optimization (SEO – getting found in Google’s organic search results)
• Content Marketing
• Email Marketing (an asset you own as opposed to ‘Likes’ on social media).
• Appearing on external blogs
• Publicity/PR
• Search Engine Marketing (SEM – such as Google Adwords)
• Social Display Ads (such as Facebook or Quora ads)
• Offline Ads (such as newspapers)
• Engineering as Marketing
• Viral Marketing
• Business Partnerships (partnering with other companies, such as HR software companies)
• Sales & Business Development
• Affiliate/Referral Programs
• Existing Platforms (unpaid activity on sites such as LinkedIn, Facebook, and Twitter)
• Trade Shows
• Offline Events
• Speaking Engagements
• Community Building

I recently wrote an article and downloadable guide for all these channels – check it out here: Best HR Marketing Plan For Human Resources Companies .

You don’t build any business or consulting firm from your couch. You have to be out there engaging with people, listening to their concerns, understanding their business and most importantly being of service. Unless I have a strong relationship with a business and they trust me, no one is going to give me work. I see so many coaches and consultants put a lot of effort into having an online presence and a great website and they have no clients. The quicker you can start to demonstrate value for a person or a company, in that moment, that’s how you grow. Tarita Preston, Chief Coach – The Curated Coach

I should emphasize when thinking about how to start an HR consulting business, you should aim to choose two or three different marketing channels to try out first. Otherwise, it all gets a little too complicated and a little messy.

Also, aim for at least one Fast and one Slow marketing method .

A fast method would be running some ads on Google or picking up the phone and calling your top ten sales prospects .

A slow method would be writing blog articles or commenting on social media. Slow methods are like a snowball – very small when they start but, as they build momentum, they increase in size until they can even take over from the fast, paid marketing channel.

Partnering with an HR software company is a great way to stay on top of all the change and provide your clients with focused, effective, and useful consultation. Being able to recommend software that will free your clients from the more repetitive and tedious HR tasks will separate your consulting firm from the pack. Dan Taylor – HR TECH INDUSTRY

6. Start New HR Consultancy – Build Your Online Presence Presence Now

Should you wait until you’re ready to actually start your business to launch an online presence?

I’m reminded of an old proverb:

“The best time to plant a tree was 20 years ago. The second best time is now.”

If I was starting over again, I wouldn’t wait.

I would start developing my online presence as soon as I thought it was likely that my own HR business was in my future.

I would adjust my LinkedIn profile to reflect my area of expertise and would start sharing more profile-building content.

I’d also start a website/blog and set up a newsletter email mailing list.

Starting an industry blog helps you build up contacts, develop future sales content, sell advertising space, or build up your mailing list for when you launch.

This blog site you’re on right now runs on WordPress and I recommend you buy a website domain name (see here) ( or here for the UK ) and then host your website WordPress (see here) if you plan to run an HR business in the future (they are referral links but I use and recommend these services).

Alternatively, you can make a new blog or website using Wix (these are referral links but I currently use both services for clients and am happy to recommend both).

You should also start a private mailing list or email newsletter to expand your network and get new clients.

I previously used Mailchimp but since its recent restructure, I switched to Mailerlite which has a very inexpensive plan and has a lot of powerful features which are worth the small investment. If you ever plan to start an HR business, you should start your mailing list right now. Seriously.

New HR Consultant Career – A Viable Option?

I’m often asked if an HR consultant career is likely to be viable.

Of course, it’s always a case of caveat emptor but if you follow the steps listed above and use the various resources provided to you on this website (including the case studies and training for different HR consultant business options ) and take action, you’ll give yourself a much better possible chance of success.

What Is The HR Business Accelerator & How It Can Help You Grow Your HR Business?

Hopefully, the six steps will help you if you’re thinking about leaving your job to start a new career as a Human Resources consultant.

Work your way through the steps and then take action.

• Create a lean startup HR consultancy business plan
• Plan your cash flow (there will be an initial dip)

Good luck with your new venture!

Feel free to get in touch and tell me about your plans.

All the best,

Post originally published in 2000.

Post Updated: April, 2024

Further Reading

What Paul Falcone did to become an HR consultant…

How to optimize your LinkedIn profile when opening a new HR consultancy…

A fascinating conversation with Ruth Penfold-Brown about how to start an HR consulting business and her new program…

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HR Consulting: How To Start An HR Consulting Business

How can you take the skills and experience you’ve gleaned working in HR (human resources) and start an HR consulting business?

Take Kristen Ireland and Erin Mies , for example. They turned their HR expertise into People Spark Consulting, a successful HR consulting firm.

They both had many years of combined HR experience helping companies hire and retain top talent.

That experience laid the groundwork for their HR consultancy, where they work with small businesses.

Now you’ve got an idea of what an entrepreneurial HR consultant looks like.

In this article, we’ll show you how to start an HR consulting business. And by the end, you will have a clear understanding of how to take the skills you’ve developed throughout your HR career and build a profitable HR consulting business .

An HR consultant is an outside expert who provides crucial advice and high-level strategic solutions for attracting, onboarding, and retaining top talent.

What Is an HR Consultant?

An HR consultant becomes an invaluable resource for any organization in dealing with their most important asset: people.

Why do companies hire HR consultants?

• To help them develop their human resources policies and procedures;
• They need expertise in regulatory compliance or employee benefits;
• They seek help training their own internal human resources employees;
• And they may need advice for dealing with more difficult issues, such as resolving interpersonal conflicts on the team.

Here’s a specific example from one of our Clarity Coaching clients , an HR consultant.

Employee onboarding creates many challenges, especially for new companies.

Since Kristen Buchanan had years of experience developing onboarding programs that could rapidly scale, she could serve as an outside expert for these companies, helping them navigate various pain points in getting new hires up to speed quickly and efficiently.

Examples of HR Consulting Services

HR consulting services come in many forms and are as broad as the field of HR itself.

Kristen Ireland and Erin Mies of People Spark Consulting, HR consultants from our Clarity Coaching Program , use their expertise in human resources to help small- to mid-sized companies move beyond “mere compliance” to truly making a difference in retaining top talent and driving their business goals.

When they first start working with a client, they use a three-step HR consulting process:

• First, they conduct a thorough, honest assessment of the client’s current state.
• Then, they create a customized report that reveals key findings and risk areas in the client’s “people practices.”
• After walking the client through the report, they develop recommendations for addressing priority issues and implementing solutions for risk areas.
• Once clients decide to move forward on those recommendations, they work with them to implement the solutions.

In their own words, People Spark Consulting “makes human resources for small businesses simple…by helping [them] be intentional about the kind of culture [they] want to foster.” And they’ve made a big difference for their clients. As Stack Heckman of Franklin Feed and Supply put it, “After working with People Spark Consulting, our business is much more organized and consistent. We have job titles and job descriptions, a handbook, written policies and written values. There is much better flow and communication tools on our end.”

Effective HR consulting services are all about deeply understanding the problems, challenges, and opportunities that companies have surrounding their employees.

Five Steps to Become an HR Consultant

So, how do you take all of your knowledge, skills, and experience and transform them into a profitable HR consulting business?

Follow these five steps.

1) Get clear on your ideal HR client

Businesses in every industry could use help with HR. But don’t can’t cast your net too broadly.

The more specific you get about exactly who you want to reach, the more your HR consulting business will stand out.

For example, People Spark Consulting targets small – and mid-sized businesses in the agricultural and food industries —particularly younger companies that need to develop more effective HR processes for retaining talent.

By getting specific about your ideal client, you’ll have an easier time attracting clients with magnetic messaging and pricing your HR consulting services in a way that communicates the real value of what you have to offer.

2) Write messaging that attracts your ideal client

A Magnetic Message makes your ideal client feel like you are speaking directly to them, identifying their specific challenges, and offering tailor-made solutions.

A small business in the food industry might come across messaging from People Spark Consulting and think, “Wow, Kristen and Erin really understand the difficulty we have retaining talent, even the unique HR challenges of our industry, and it seems like they have solutions that are just right for us.”

The simplest way to create impactful messaging is to use the framework: Problem – Action – Results .

Your ideal clients have HR problems. Write those problems down.

• Maybe they need help with onboarding;
• Maybe they’re dealing with specific challenges in attracting top talent;
• Or maybe they need help with compliance issues because of heavy regulation in their industry.

Make it clear that you understand what your ideal client’s specific challenges are.

Then, you need to explain how you can help them solve those challenges.

Finally, share the results they can expect to achieve from your solution.

• Problem : Your ideal client has high turnover, which is a common problem in their industry.
• Solution : You offer a customized onboarding development program for businesses just like theirs.
• Result : Clients who have gone through your program have increased retention by an average of 40 percent.

To make this process even easier, you can use our “ Magnetic Message Formula ” to create a simple, effective message that will attract your ideal client.

Here’s what it looks like:

I help [WHO] to [solve WHAT problem] so they can [see WHAT result].

3) Create and price your strategic offer

Your ideal client has different HR challenges, and you, the HR consultant, have the expertise and experience to help them solve those problems.

As a direct result of your services, your ideal client will achieve their desired results.

And that is why they’re going to pay your consulting fees .

However, the amount they feel comfortable paying is dictated by the value they see in your solutions.

For example, if you’re going to help them improve their processes in such a way that they boost retention by 40 percent, that’s going to make a huge positive impact on the growth of their business.

Make that crystal clear to them up front, and they’ll gladly pay you a generous consulting fee.

One note : while charging an hourly rate might be okay for your first few consulting projects, it’s not a good long-term pricing strategy.

First of all, you’re not going to be working forty hours a week with your clients, so you won’t end up earning a full-time income.

Second, as a consultant, you will spend many hours going out and winning business, and an hourly rate doesn’t take that into consideration.

For that reason, we recommend charging value-based fees that take into account all of the tangible and intangible value you create for your clients.

4) Rev up your marketing engine

Many companies that need help with Human Resources aren’t even aware that HR consultants exist.

They currently have no idea where to turn, and they wouldn’t know where to find you or how to approach you for help.

They’re not going to knock on your door and announce, “Hey, I need help with my onboarding process!”

Therefore, it’s up to you to get out there, find your ideal client, and approach them.

Effective marketing helps clients get to know you, like you, and trust you so they’ll want to talk to you about how you can help them with their HR issues: “Hey, I read your article about tips for onboarding, and I’d like to talk to you about some challenges we’re dealing with.”

To do this well, we recommend you focus on a few specific marketing habits:

• Outreach – Reach out to your ideal clients directly through LinkedIn or email, share valuable content that adds value to their lives, and generate interest in your offer.
• Follow-up – Continue to add value over time. Send them direct messages or emails on HR topics relevant to their industry, niche, and business size.
• Authority-building – Publish content on your blog, website, and social media platforms that positions you as an HR expert and supports your outreach and follow-up efforts.

Combining outreach, follow-up, and authority-building in your marketing will help you build relationships with your ideal client and create conversations with them.

5) Create meaningful conversations

Once you’ve got your marketing engine going, how can you tell if it’s working?

The clearest sign is that prospective clients are responding: they’re reaching out to you to have meaningful conversations about their HR issues and your solutions.

During those conversations, your goal is not to “close” but to help the client gain clarity about their situation, challenges, and desired outcome.

If they agree that you can help them, then you can make an offer, which might sound something like this:

“It seems like our six-week onboarding development program would help you get new hires up to speed much faster and more efficiently. Let me show you what that would look like.”

HR Consulting Business Case Study

When we work with HR consultants, there’s one question they all invariably ask: How much should an HR consultant charge?

And the corollary is this: How much will the client be willing to pay?

The HR consultants in our Clarity Coaching Program charge as much as $55,000 per project , but your fees will vary depending on the nature of the solutions and services you provide and the industry you target.

Bear in mind, if you charge an hourly rate, even if it’s $160 an hour or more, you’re probably going to make a lot less money over time.

Let’s use the example of People Spark Consulting .

They have identified a very clear problem that their ideal client deals with—retaining employees—and they can communicate the danger very clearly: “Did you know that the cost of losing one good hire is $29,600? The cost of a bad hire is $14,900. Rather than losing money and spinning your wheels, why not invest in your people strategies?”

They crafted impactful messaging that adds value to their ideal client and leads to meaningful conversations, and that is why their clients are happy to invest in their services.

People Spark Consulting credits the Clarity Coaching Program for helping them learn how to do the “business” side of HR consulting.

After going through the program, they said: “We were exposed to, and began to participate in, a community of consultants who helped us solidify our process to create a more professional approach.”

They learned how to define their ideal client clearly, communicate value to them more effectively, streamline their assessment process, and create a better and more profitable pricing structure.

Get Customized Coaching to Start Your HR Consulting Business

We have coached many HR consultants to help them to start and grow their HR consulting businesses, and we can do the same for you.

In our Clarity Coaching program , we’ve helped over 850 consultants to build a more strategic, profitable, and scalable, consulting business.

We’ve worked with HR consultants and understand the specific nuances of starting, growing, and scaling an HR consulting business specifically.

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8+ SAMPLE HR Consulting Business Plan in PDF

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HR Consultant Business Plan Template

Published Dec.10, 2021

Updated Apr.23, 2024

By: Jakub Babkins

Average rating 5 / 5. Vote count: 5

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Table of Content

Do you want to start HR Consultant business plan?

Are you thinking about starting an HR consultant business? If so, it is a great idea. That’s because you can start an HR consultant business with very few resources and a small team. Afterward, you can extend it to whatever size you want. But the start is relatively easier as compared to other businesses.

The first step in learning how to start HR consulting business is to write a good business plan for your idea.

You can write an HR consultant business plan yourself. Or you can hire business plan writing services . If you want to write the plan yourself, you can just follow the HR consultant business plan mentioned here.

Executive Summary

2.1 the business.

Dillinger HR Consultants will be an HR consultancy company started and owned by Riley Dillinger. The company’s primary aim will be to provide consultations to its clients about the management and procurement of their HR resources in Portland, Oregon. The range of services offered will vary from recruitment and training to payroll management for different clients.

2.2 Management of HR Consultant Company

When starting a human resource consulting firm, you need to ensure that all your resources are well-managed and utilized. You can do this through a business plan strategy . You can do an HR consultancy industry overview to understand what resources you will need to start your company.

The best portfolio of an HR consultant for small businesses and big ones is competent management of his own business. So, if you want to learn how to start an HR consulting firm, take guidance from this plan and others like business consulting business plan , etc.

Here, we are providing all the necessary details of Dillinger HR Consultants so that you can take help for developing your business plan.

2.3 Customers of HR Consultant Company

Our customers will belong to almost all work domains as professional cleaning and maintenance are required by all. However, our potential and recurring customers are identified as follows:

• HR Directors
• Small/ Medium Businesses & Work Councils
• Internal Consulting Departments
• Training Facilities

2.4 Business Target

Our target is to become a reliable source of HR consultancy and issue resolution to our clients when they need assistance.

Our financial targets for the first two years of our launch are shown below:

Company Summary

3.1 company owner.

Riley Dillinger will be the owner of Dillinger HR Consultants. She completed her MBA two years back and worked for an administration firm after graduation. To pursue her dream of starting her own business, she decided to leave her job and start the Dillinger HR Consultants.

3.2 Why the HR Consultant company is being started

In her previous job, Riley had a lot of exposure to various types of organizations ad companies at every scale. She realized that a lot of companies struggle with their human resource department. And more prominent consultancy companies cannot offer services catered to each company. She realized that she could solve this issue by starting as an HR independent consultant and then extending the business to a startup HR consultancy.

3.3 How the HR Consultant company will be started

Step1: Plan Everything

When learning how to start an HR consultancy company, you will find that developing an HR consulting business plan template is vital. For this, you can refer to different business plans available on the internet like counseling practice business plan , etc.

Since Riley decided to start small and expand her business from there, this HR consulting business model is suitable for those who are just beginning and those looking to expand their business.

Step2: Define the Brand

The next step is to showcase your unique values and services to your customers. It is called developing a brand. And it helps a business stand out from its competition. Any good business plan, whether it is a life coaching business plan or a mortgage lender business plan , includes the necessary details about developing the brand.

Step3: Establish Your Corporate Office

To start her business, Riley decided to rent out a space in an office building in Portland. Her next step will be to hire sufficient staff to launch her company.

Step4: Establish a Web Presence

Riley knew the importance of social media and online networking in the success of a business. So she decided to establish social media profiles for the company and also get a website developed. It will help her expand her reach and allow her customer to contact her from anywhere, at any time.

Step5: Promote and Market

The final step is to develop a marketing plan and execute it for the promotion of the business.

Starting your own HR consulting business is all about planning. You need to decide on the services that you will provide to your clients. A good idea about the scope of your services will help you to plan your business. It will also help you create the HR consulting services business plan.

To understand how services are presented in a business plan, you can take a look at an HR consulting business plan sample or something related, like a staffing company business plan .

Riley decided to limit her company’s services at the beginning but expand them later on. Therefore, this sample HR consulting proposal is suitable for developing the business plan for any company. It doesn’t need to be related to business HR consulting. It can even be a courier services business plan . You can easily take help from here.

• Policies Development

One of the significant services of Riley’s HR Consultants will be to help companies in the development and streamlining of their policies. It can include things like:

• Disciplinary Conduct
• Workplace Violence, etc.
• Recruitment Operations

We will also offer recruitment aid services to our clients. It can include providing our clients with part-time or full-time employees. We will take care of the whole process, from sourcing to staff induction. Or we will just match our clients with an appropriate employee pool that they can choose from.

• Provision of Contract Staff

Contract Staffing is a brilliant solution for many services. We will help our staff in temporary staffing with limited-time contracts where the employees can immediately meet the client’s needs.

• Training and Development

Productivity and efficiency are key terms that are used by every business, big and small. We will help our clients take this idea from an abstract realm to reality by helping them in developing training plans for maximum efficiency.

• Performance Management

Riley’s HR Consultants will also help people develop and implement robust performance management systems so that their employees attain maximum productivity and attain their goals faster.

Marketing Analysis of HR Consultant Company

For starting a HR consultancy, you need to have an in-depth knowledge of your customers and competition. You can gain this insight through a marketing analysis. These are a part of business plan for HR consulting firm. It will give you an idea of how to price and market your services.

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A good marketing analysis of HR marketing consultants should include all past, present, and future market predictions to run the business accordingly. These analyses form an essential part of any HR consulting proposal example. And these, together with the financial goals of the company, determine how to start an HR consulting business and how to run it.

5.1 Market Trends

According to IBISWorld, HR consulting services in the US have a market valued at $24 Billion as of 2021. And the market is expanding at a rate of 5.8% every year. It means that more and more companies are demanding assistance to develop and improve their human resource departments. Many businesses are looking for temporary contract human resource provision, and starting an HR consultancy firm is a great way to take advantage of this market.

5.2 Marketing Segmentation

The customers of Riley’s HR Consultants are categorized into the following groups:

Business plan for investors

5.2.1 hr directors.

Our main clients will be the HR directors and managers of different companies. Our HR advisors will help them improve the human resource functions in each department and the entire company. This group is expected to require our services frequently throughout the year.

5.2.2 Small/ Medium Businesses & Work Councils

Our second biggest clients will be small and medium-sized businesses and work councils. Our consultants will help them in solving human capital problems of various scopes. These may include providing HR support, managing cultural transformations and developing management strategies, etc.

5.2.3 Internal Consulting Departments

Our consultants will also regularly work with internal consulting departments of companies to ensure proper human resources are available for the ongoing project. These clients are expected to avail of our services quite often.

5.2.4 Training Facilities

One of the aims of Riley HR Consultants is to make companies self-sufficient. In that respect, we will also provide training seminars and plans catered for our customers. Our smaller clients are expected to utilize the most to make their startups more efficient.

5.3 Business Target

• To become the most sought out HR consultants in Portland, Oregon.
• To expand the range of our offered services with passing time and increase the area of our approach.
• To earn a net profit of $50k per month by the end of our third year.
• To have around two dozen regular clients, 5 of which need to be big guns.
• To maintain a customer satisfaction score above 90%.

5.4 Product Pricing

Our prices will be a little higher as compared to our competitors. But we will offer a more excellent range of services for that price along with 24/7 customer support. We will also ensure that our clients have access to our on-site services whenever they require them.

Marketing Strategy

To make your name in a bustling industry, you will need a marketing plan. In fact, it is one of the most crucial parts of learning  how to set up an HR consulting business.

You can find examples of marketing analysis in any HR consulting business plan template. In this business plan HR consulting, we are providing the sales strategy for Riley’s HR consultants so that more and more people will pay attention to the business.

6.1 Competitive Analysis

• Our clients can contact us at any time through our website or social media. They can also use our provided contact numbers to connect with our support systems.
• We will establish solid customer care services to maintain good relationships with our clients.
• We will also take feedback from our clients to make necessary changes and deal with our customers in the best possible manner each time they hire us.

6.2 Sales Strategy

• We will offer continuous support to our customers.
• We will offer 25% customers to our first ten clients for a period of 6 months.
• For our shorter-term clients, we will offer a 10% discount.
• We will advertise our services through social media, billboards, posters, and Google Ads.

6.3 Sales Monthly

6.4 sales yearly, 6.5 sales forecast, personnel plan.

A consultancy firm depends on its relationships with its clients. Riley decided to implement some selection criteria when hiring initial employees to develop and maintain excellent relationships with the customers. She also made these criteria a part of the HR consultancy business plan pdf as you will find in any HR consulting business plan template.

7.1 Company Staff

• 6 Certified HR consultants
• 2 Customer Care Managers
• 1 Web Developer to manage online sites
• 1 Sales Executives to organize and promote sales
• 1 Accountant
• 1 Receptionist

7.2 Average Salary of Employees

Financial plan.

The success of a business depends on many factors, of which financial standing is one. To ensure the success of your business, you need to maintain it in good financial standing. To do this, you need to manage your operations and problems in a timely fashion. To ensure that your business won’t suffer any loss, you need to develop a financial plan and make it a part of your business plan for HR consulting firm. You can take guidance for this from an HR consulting business plan template.

Here we’re providing the detailed financial plan developed for Riley’s HR Consultants. You can get an idea of business finances and how to manage them from here.

8.1 Important Assumptions

8.2 break-even analysis, 8.3 projected profit and loss, 8.3.1 profit monthly, 8.3.2 profit yearly, 8.3.3 gross margin monthly, 8.3.4 gross margin yearly, 8.4 projected cash flow, 8.5 projected balance sheet, 8.6 business ratios.

• How do I start an HR consulting business?

You can start HR consulting business with any team size. You just need a strong HR consulting business model for which you can take help from this document.

• What should I charge for HR consulting?

The charges you take for HR consultant services will depend on the type of services. But on average, HR consultants charge anywhere from $100 to $300 per hour.

• How do HR consulting firms work?

HR consulting firms aid companies in dealing with their HR departments or managing their human resources in case they don’t have one. You can find more details in the above document.

• How do you write a human resource business plan?

You can write a human resource business plan by conducting an HR consulting industry analysis. For reference, you can take help from this document.

Download HR Consultant Business Plan Template in pdf

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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BUSINESS STRATEGIES

How to create a consultant business plan

• Nirit Braun
• Oct 30, 2023
• 12 min read

When launching your consulting business, one of the essential first steps is crafting a well-structured and detailed business plan. Your consulting business plan is like a strategic playbook that lays out your goals, tactics and financial projections. It not only steers you toward success but also equips you to adapt and thrive in the dynamic world of consulting.

Keep reading for tips on how to build a strong business plan for your business. Use the template provided at the end to get started on your own plan.

Looking to kick off your consultancy business? Create a business website today with Wix.

Why create a consultant business plan? Top benefits to consider

A business plan forces entrepreneurs to thoroughly evaluate their business idea, target audience and competitive landscape. This process clarifies their vision and mission, ensuring that they have a clear understanding of how their consultancy will provide value to clients. A business plan helps you in the following ways:

Create a business blueprint : With a business plan in place, entrepreneurs looking to start a business can make informed decisions based on a solid foundation of research and analysis. They can choose the most effective strategies for marketing, pricing and service delivery, enhancing their chances of success. Your business plan can also be used to explain what type of business you'll start - whether that's an LLC, Corporation or something else. Learn more about how to start an LLC .

Secure funding : The cost to start a consultancy business can range from around $60 to several thousand dollars . For those seeking external funding, a well-developed business plan demonstrates credibility and professionalism. Investors and lenders are more likely to support a venture with a thought-out plan that showcases its potential for growth and profitability.

Set measurable goals : A business plan sets measurable goals and performance metrics, which is vital with this type of business . This allows entrepreneurs to track their progress, adapt strategies as needed and celebrate milestones along the way.

Want to remind yourself of the basics? Learn more about how to start a service business .

How to create a successful consultant business plan in 6 steps

In this section, we'll break down the key components involved in crafting a successful consultant business plan in six steps.

Executive summary

Business and domain names

Market analysis and research

Operations plan

Marketing and advertising plan

Financial plan

01. Executive summary

An executive summary serves as a concise overview of the consultant's business plan, providing a snapshot of the key components and the business' essence. It's usually the first section investors, lenders and stakeholders read, so it must encapsulate the business' value proposition, objectives, strategies and projected growth. To write a clear executive summary for a consultant business make sure to keep it succinct yet informative. Clearly state the purpose of the business, the services offered, the target market and the unique value proposition. Avoid technical jargon that may confuse readers.

Then you can mention the business' strengths, such as the expertise of the consultants, unique methodologies or specialized services. Emphasize factors that set your consultancy apart from competitors.

Briefly discuss the market need for your services and how your consultancy plans to fulfill it. It’s worth noting that strategy and management consulting, as well as technology consulting, financial consulting and HR consulting are in high demand . Highlight any trends or changes in the industry that your business can capitalize on.

Remember to include a snapshot of your financial projections, indicating expected revenue, costs and profitability. This provides a glimpse into the business' potential financial success.

Example of an executive summary for a consultant business

"XYZ Consulting is a boutique consultancy firm specializing in digital transformation for small and medium-sized enterprises (SMEs). With a team of seasoned professionals, we offer tailored solutions to help businesses harness the power of technology for growth. Our unique approach blends strategic consulting with hands-on implementation, ensuring tangible results. In a rapidly evolving tech landscape, XYZ Consulting is poised to be the partner SMEs need to thrive. Our financial projections forecast a steady growth trajectory, with a focus on achieving profitability within the first two years. With a proven track record and a finger on the pulse of industry trends, XYZ Consulting is well-equipped to guide businesses toward digital success."

02. Business and domain names

Knowing how to name a business is crucial for a consultancy venture and a key step before you register your business . It's the foundation of your brand and influences how clients perceive your services. With Wix , you can use a free business name generator or consulting company name generator as helpful tools for brainstorming unique and memorable names. Ensure the name reflects your expertise and the services you offer.

Similarly, the domain name for your business website is vital. It should be easy to remember, relevant to your services and ideally, match your company name. Check the domain's availability using domain registration platforms. Ensure the domain name aligns with your consultancy's focus and services. Generally, this means keeping it short and easy to spell and pronounce.

Learn more: How to make a consulting website

03. Market analysis and research

Incorporating a thorough market analysis within your consultant business plan is essential. Understand the competitive landscape, target audience and market trends. Research your competitors' strengths and weaknesses, pricing strategies and client base. This information will shape your business strategies and help you identify gaps in the market that your consultancy can fill.

04. Operations plan

The operations plan outlines the logistical aspects of your consultancy. It covers location, premises, equipment and staffing requirements. Determine whether your consultancy will be home-based, have a physical office or operate virtually. Define the equipment and software needed to deliver services effectively. Outline your staffing needs, including the roles and expertise required.

05. Marketing and advertising plan

Your marketing and advertising plan outlines how you will promote your consultant business. Identify the most effective strategies to reach your target audience. Consider content marketing, social media campaigns, networking events and speaking engagements to showcase your expertise. Emphasize how your marketing efforts will build brand awareness and attract clients.

You’ll need to develop a suite of brand assets to use in your marketing as well, starting with a company logo. You can use a free logo maker to get a professional logo in minutes.

06. Financial plan

The financial plan is a critical component of any business plan. It outlines how you will raise money for your business initially and provides a timeline for reaching profitability. Detail your startup costs, including equipment, marketing expenses and personnel. Present your revenue projections, taking into account different pricing models and growth scenarios. Highlight your break-even point and the strategies you'll employ to achieve profitability.

By addressing each part of their plan, entrepreneurs can create a robust business plan that guides them toward achieving their business goals and building a reputable consulting brand.

Consultant business plan examples

These templates illustrate two hypothetical consultant business plans, each tailored to a specific niche. These are just templates and should be adapted to your specific business goals and industry dynamics.

Consultant business plan template 1: XYZ Digital Consultants

XYZ Digital Consultants is a pioneering consultancy firm focused on digital transformation for businesses seeking to thrive in the digital age. Our team of experienced professionals offers strategic guidance and hands-on implementation to drive growth through technology adoption. With projected profitability within two years and a commitment to excellence, XYZ Digital Consultants is poised to lead businesses into a successful digital future.

Company and domain name

Company name: XYZ Digital Consultants

Domain name: xyzdigitalconsultants.com

Market opportunity: The rapid shift toward digital operations has created a substantial demand for expert guidance. Our analysis reveals a gap in the market for holistic digital transformation solutions tailored to the needs of SMEs.

Competitor research: We've identified key competitors and their strengths, which informs our strategy to emphasize personalized service and comprehensive implementation.

Location: Primarily virtual, with occasional in-person consultations as needed.

Premises: Home-based setup with access to modern communication tools.

Equipment: High-speed internet, latest software tools and virtual meeting platforms.

Staffing: Founder and lead consultant, supported by contract specialists as projects demand.

Content marketing: Regular blog posts on digital transformation trends, case studies and client success stories.

Social media campaigns: Active presence on LinkedIn and X to engage with potential clients and share valuable insights.

Networking events: Participation in industry webinars, seminars and local business events to showcase expertise.

Speaking engagements: Leveraging speaking opportunities at conferences and workshops to establish authority in the field.

Startup costs (equipment, website development, marketing materials): $15,000

Revenue projections (year one): $150,000

Revenue projections (year two) : $300,000

Break-even point: Achieved by the end of year one

Funding: Initial investment and savings from the founder

Consultant business plan template 2: LeadersEdge Consultants

LeadersEdge Consultants is a dynamic consultancy dedicated to leadership development and organizational excellence. Our experienced team offers customized programs that empower leaders to drive positive change. With a projected growth trajectory and a commitment to fostering impactful leadership, LeadersEdge Consultants is poised to transform organizations and elevate their success.

Company name: LeadersEdge Consultants

Domain name: leadersedgeconsultants.com

Market opportunity: Our analysis reveals a growing need for leadership development programs in diverse industries.

Competitor research: We've identified competitors' offerings and recognized an opportunity to provide a unique blend of coaching, training and strategy implementation.

Location: Virtual consultations, with the option for on-site workshops

Premises: Virtual office setup with video conferencing capabilities

Equipment: High-quality audiovisual tools, assessment software and learning platforms

Staffing : Founder will serve as the lead consultant, supported by certified leadership coaches

Customized workshops: Designing tailored leadership development programs for individual organizations.

Webinars: Hosting webinars on leadership best practices to showcase expertise and engage potential clients.

Thought leadership content: Publishing whitepapers, eBooks and video content on leadership topics.

Collaborations: Partnering with HR and talent development professionals to expand reach.

Startup costs ( making a website , training materials) : $10,000

Revenue projections (year one): $120,000

Revenue projections (year two): $250,000

Break-even point: Achieved within the first six months

Funding: Initial investment from the founder.

How much should you be charging as a consultant?

The amount you charge as a consultant will depend on a number of factors, including:

Your experience and expertise

The type of consulting services you offer

The value you provide to your clients

The market rate for consulting services in your field

In general, consultants charge between $100 and $500 per hour. However, some experienced and highly specialized consultants can charge upwards of $1,000 per hour.

To determine your consulting rate, you can use the following formula:

Consulting rate = Hourly rate * Value multiplier

Your hourly rate should reflect your experience and expertise, as well as the type of consulting services you offer. For example, if you have 10 years of experience and you offer specialized consulting services, you can charge a higher hourly rate than a consultant with less experience and who offers more general consulting services.

Your value multiplier should reflect the value you provide to your clients. For example, if you can help your clients to achieve significant results, you can charge a higher value multiplier.

Here is an example of how to use the formula:

Consultant: Experienced consultant with 10 years of experience offering specialized consulting services

Hourly rate: $200 per hour

Value multiplier: 2

Consulting rate: $200 per hour * 2 = $400 per hour

Can a consulting business be profitable?

Yes, a consulting business can be profitable. In fact, consulting is one of the most profitable industries in the world. According to a report by IBISWorld, the average profit margin for consulting businesses is 20%. This means that for every $100 in revenue, consulting businesses generate $20 in profit.

There are a number of factors that contribute to the profitability of consulting businesses. First, consultants are able to charge high fees for their services. Second, consulting businesses have relatively low overhead costs. Third, the demand for consulting services is high, and it's only expected to grow in the coming years.

Of course, not all consulting businesses are successful. Some consultants struggle to find clients or to charge high enough fees. Others may not be able to deliver the results that their clients expect. However, for consultants who are able to overcome these challenges, the potential rewards are great.

Here are some tips for increasing your chances of success as a consultant:

Specialize in a high-demand area of consulting. This will allow you to charge higher fees and attract more clients.

Build a strong reputation and network of clients. This will help you to generate word-of-mouth referrals and land new clients.

Market your services effectively. Make sure that potential clients know about your services and how you can help them.

Deliver high-quality results. This is the most important thing you can do to ensure that your clients are satisfied and that they continue to use your services in the future.

How much does it cost to start a consulting business?

The cost to start a consulting business can vary depending on a number of factors, such as the type of consulting services you offer, the size of your business and your location. However, in general, you can expect to spend between $10,000 and $50,000 to start a consulting business.

Here is a breakdown of some of the typical start-up costs for a consulting business:

Business formation: $100 to $1,000

Website and domain name: $100 to $2,500

Marketing and advertising: $500 to $5,000

Office equipment and supplies: $500 to $5,000

Professional liability insurance: $500 to $1,000

Other miscellaneous expenses: $500 to $5,000

Total start-up costs: $10,000 to $50,000

You can reduce your start-up costs by working from home, using free or low-cost marketing tools and purchasing used equipment. You can also start your consulting business part-time while you continue to work your full-time job. This will give you a chance to generate revenue and build a client base before you leave your full-time job.

If you need financial assistance to start your consulting business, you may be able to qualify for a loan from a bank or credit union. You may also be able to find investors who are willing to invest in your business.

Which clients to avoid and which to take on?

Here are some tips on which clients to avoid and which to take on in a consulting business:

Clients to avoid

Clients who aren't willing to pay your rates. If a client isn't willing to pay your rates, it's a sign that they don't value your services.

Clients who are unrealistic about their expectations. If a client has unrealistic expectations about what you can achieve, you're likely to set yourself up for failure.

Clients who are difficult to work with. If a client is demanding, rude or disrespectful, it's best to avoid them.

Clients who aren't a good fit for your business. If a client isn't in your target market or if their business isn't aligned with your values, it's best to decline working with them.

Clients to take on

Clients who are willing to pay your rates. This shows that they value your services and are committed to working with you.

Clients who have realistic expectations. This makes it more likely that you will be able to meet their needs and exceed their expectations.

Clients who are easy to work with. This will make the consulting process more enjoyable and productive for both of you.

Clients who are a good fit for your business. This means that they're in your target market and that their business is aligned with your values.

In addition to the above, here are some other factors to consider when deciding which clients to take on:

Your own skills and experience. Make sure that you have the skills and experience to help the client achieve their goals.

The client's budget. Make sure that the client has a budget that's sufficient to cover your fees.

The client's timeline. Make sure that you have the time and resources to meet the client's timeline.

Your gut feeling. If you have a bad feeling about a client, it's best to trust your gut and decline working with them.

It's important to be selective about the clients you take on. By avoiding difficult clients and focusing on good-fit clients, you can set yourself up for success in your consulting business.

Consultant business plan FAQ

What qualifies you as a consultant.

To qualify as a consultant, you need to have the expertise and experience in the area that you're consulting in. You also need to be able to communicate your ideas effectively and build relationships with clients.

How do you start off as a consultant?

How to make 6 figures as a consultant, how do you pay yourself as a consultant, do consultants pay their own taxes, want to create another business plan.

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We help your organization make strategic HR decisions to create a diverse and inclusive environment, remain compliant within your industry and provide training to develop your current and future leaders so your organization can face the future with confidence.

Gallagher's HR Consulting team works with you from creating an impactful HR strategy and vision to being an extension of your HR team for projects. Explore our HR consulting solutions designed to scale to meet your HR function needs for better organizational wellbeing.

Developing an effective HR strategy with assessments

An effective human resources department starts with a carefully developed strategy. Gallagher works with organizations to ensure that HR strategies are consistent with the organization's overall goals. Our team brings a depth of knowledge, skills, and abilities including multi-faceted, practical and real-world experience.

Gallagher provides comprehensive assessments of value and effectiveness of an organization's current HR programs and processes. We employ a number of methodologies, including:

• Conducting interviews with key stakeholders to ascertain the success of current HR programs from various perspectives
• Creating custom surveys targeting effectiveness of key HR program(s)
• Review of HR programs and processes using data analysis and best practices
• Benchmarking against similarly-situated organizations in and outside of your industry to better understand what "best in class" firms are doing from an HR standpoint. We examine practices and programs which enable leading companies to best meet their business goals and customer's needs

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Our HR consultants bring decades of experience from more than 500 organizations. Their experience combined with an extensive database of benchmarking data allows us to make practical recommendations to our clients about effective structures, efficient processes, and ways to update or enhance programs and systems.

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When organizations embrace workplace diversity, equity and inclusion (DEI), they demonstrate through their policies and actions that they appreciate and value differences including race, ethnicity, gender, age, religion, ability, sexual orientation, education, personality, skill sets and experiences.

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Your guide to setting up an HR consultancy from scratch

5 min read   |   19 August, 2020    By Aimée Brougham-Chandler

There are few things more exciting than taking the plunge, quitting your job and setting up your own HR consultancy. But if you want to go it alone and be successful, you need to do a bit of planning first.

Things you should consider when setting up your HR consultancy

With enthusiasm for your new business venture bubbling over, it can be all too tempting to jump straight in and get going as fast as possible. Whilst there’s nothing wrong with this approach, pausing for a moment and getting a plan in place can drastically increase your chances of success.

Now you've planned your consultancy, see how our Partner Programme will help your business grow with award-winning, cloud-based HR software. Book a demo below and find out more.

Business plan

How do you know where you’re going if you have no plan? A business plan doesn’t have to be long or complicated but having a simple document in place which details what you want to achieve and when can really help to focus your goals.

Do you intend to remain an independent consultant or do you want to build a consultancy and employ other people ? What areas do you want to specialise in? Is there are market for your services and how will you acquire them? What are your plans for one, two, five and ten years’ time?

Type of company 

You can work as an independent consultant and be a sole trader or you could form a partnership with another consultant. You might choose instead to go down the limited company route.

Lead generation  

It can get overlooked at times and it can be easy to assume as soon as you’re in business the clients will follow. If it were that easy everyone would be working for themselves. But acquiring clients is hard and you need to have a plan in place detailing how you will get them.

Who will you market your business to and how? Will you use your network of existing contacts or will you go out to events and promote your services? Are you planning a social media presence and online advertising or will you stick to more traditional forms?

Specialist areas  

There will be plenty of different areas you can specialise in depending on what you wish to achieve. You need to define your services from the very start and be clear on what you offer and what you don’t.

As an independent consultant, your budget for advertising and marketing is likely to be small, especially in the beginning. You need to figure out who your target audience is and how you will reach all those potential clients.

If you put a plan in place you will start to use what budget you have in a far more effective manner rather than taking a scatter gun approach and hoping something sticks.

Buying a franchise

You might wish to consider buying a franchise instead of setting up on your own as a lower risk model. As a franchisee you are still your own boss however, you are part of a larger machine which already has a recognised brand.

You receive technical training, plenty of support and guidance, access to existing marketing systems and the use of technical tools and software.

The downside with a franchise is you have to pay for the franchise up front in the first place, pay a percentage of profits to the franchisor and you may find you’re constrained in what you do because it has to fit with the franchisor’s brand and ethos.

Steps to follow to get your consultancy started

Analyse yourself .

Do you have good interpersonal skills? Can you get on with people easily? Are you confident putting yourself out there? Do you have the motivation or self-starting ability necessary?

You need to think long and hard about the answers before you start your consultancy. You could be working on your own and need to be able to self-start as well as not feel lonely or isolated on your own.

You also need to get on well with other people – consultancy work is a people-facing business and it’s important you actually like people.

Know your market 

Being confident in a certain skillset is one thing but you need to be sure there is a market for the particular expertise you plan to offer. If your skills are relevant in an area where there is growing demand - but with professionals in short supply - it can work in your favour.

Write a business plan  

Get your branding right from the start and make sure it reflects you, your business and your brand values.

Website  

It’s worth paying for a good website which not only showcases your brand and services, but is also optimised for all devices and includes relevant key search terms. A website is your virtual shop window so it is important it creates the right first impression.

Marketing and PR

Use all your own personal skills to market yourself and to network. Make sure you get some good PR when you start up, even if you do it yourself, rather than employ an outside consultant.

Don’t forget to register with HMRC if you decide to work as a self-employed consultant. If you decide to set up a limited company you’ll have to apply to Companies House to create your business.

Author: Aimée Brougham-Chandler

An IDM-certified Digital Copywriter as of February 2023, Aimée is Breathe's Content Assistant. With a passion for guiding readers to solutions for their HR woes, she enjoys delving into & demystifying all things HR: From employee performance to health and wellbeing, leave to company culture & much more.

Posted on 19 August, 2020

By Aimée Brougham-Chandler

in HR Consultants

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UK continuity services firm Databarracks has acquired Scotland’s PlanB Consulting .

PlanB, acquired for an undisclosed sum, will be added to Databarracks’ Operational Resilience and Cyber Continuity consulting practice.

Established in 2007, PlanB Consulting offers business continuity, crisis management, resilience, and cyber incident response services. It is an ISO 22301 certification consultancy, and is also a UK National Cyber Security Centre (NCSC) Assured Exercise Provider for cyber incident drills.

“There is no better independent business continuity consultancy than PlanB. I’ve spent over 30 years in the industry, and over the last few years the market has fundamentally changed,” said Mike Osborne, non-exec chairman of Databarracks.

He said the “old guard” of business continuity specialists had been “absorbed” by generalist IT service providers. “ Sungard Availability Services sadly went into administration in the UK, and throughout the pandemic many of the smaller consulting providers took in-house roles,” said Osborne.

He maintained the operational resilience market had become “fractured” in the UK across cyber, data protection, IT recovery, and business continuity planning, “leaving few, if any” genuine specialists dedicated to end-to-end resilience.

PlanB has offices in Glasgow, London, and Abu Dhabi. Kim Maclean-Bristol, co-founder and director, said: “We’re pleased to find a home with an organization that gives us a broader market reach, and shares our values and vision for changing the way we make organizations resilient.”

In 2003, Databarracks launched one of the world’s first managed data backup services to bring “indestructible resilience to mission-critical data.” The data backup services were located in an underground former UK military bunker.

Last year, Databarracks launched Jump-Start , a cloud-based recovery landing zone. By using infrastructure as code (IaC), resources, networking, security, and governance are activated “within minutes” ready for a complete recovery, Databarracks promises.

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Clients Have All the Leverage in Law Firm Succession Planning

Decades ago, most corporate clients were considered law firm property rather than the portable asset of any partner. Inheriting client revenue streams, and therefore succession from older owners to younger ones, happened automatically with little client involvement.

This started changing in the 1970s when general counsels began making firms control legal spending to be more cost-effective. The pricey practice of assigning all company legal work to a single firm was scrutinized, and general counsels began giving work to the best lawyers in their fields, who often were at different firms.

For the first time, partners had books of business they could call their own. When better opportunities at other firms became available, they jumped ship. Today, institutional clients that hire one law firm for all things are a relative rarity, recruiting laterals is ubiquitous, and succession is no longer automatic.

Younger partners must replace the revenue once generated by retiring partners. To do so, retiring partners must transition their practices to the next generation, which then has to develop new business to make up for client attrition and generate new growth.

Putting in Time

Transitioning a large practice to others takes work. Senior partners must do more than train their successors to be good lawyers—they must integrate them into client relationships at the summit level. This means hundreds of non-billable hours spent preparing and coaching younger lawyers to take leadership roles.

The extent to which a firm retains a retiring partner’s clients often is directly proportional to the time and effort the retiring partner devotes to this all-important work.

Clients almost never shift allegiance to the next generation because the retiring senior partner makes a cursory introduction and fades into the sunset. Clients can afford to be picky. If the lawyers poised to inherit a client relationship are unsatisfactory, corporate clients aren’t shy about rejecting them.

If the retiring partner devotes little time and effort to socializing a client to successors, the client will assume the firm doesn’t care about retaining the relationship. In a tossup between a qualified in-firm successor and a competitor from another firm, the incumbent usually wins. But while the process favors incumbency, it can be easily derailed if a client’s needs are ignored.

If a client isn’t happy with the new team, succession fails. In this way, clients control the succession process. If they don’t get capable, fully integrated replacements for retiring partners, they will go elsewhere.

Incredibly, law firms often let this happen. Some have divisive internal logjams over retirement issues. Others simply don’t want to deal with the problem. Either way, it can feel easier to go out and get new clients than work to retain a retiring partner’s existing ones.

In-house lawyers and other client representatives are intensely frustrated by this. They hate waking up to find that their relationship partner has retired without designating successors. They dislike the indifference to their needs this reflects. But until recently, many clients have felt powerless to change this dynamic.

Flexing Their Muscles

Clients are asking firms and practice groups to disclose who is next in line to lead their service teams when the current leader leaves for any reason, not just retirement. They’re amending their outside counsel guidelines to require these disclosures as a condition of engagement, and adding succession-related questions to RFPs and the onboarding process for new firms.

Across the industry, clients are demanding that firms plan for succession and give them a window into this planning. This is a boon for managing partners who have tried to plan for succession but hit internal roadblocks at their firms.

These leaders now have new leverage: If the firm doesn’t plan for succession, it will lose business. Smart law firms are getting out ahead of this trend, using partner retirements as an opportunity to strengthen and broaden client relationships within a conversation about future team leadership. Clients like this—and they reward these firms with new matters.

A tipping point is coming. If firms continue to ignore client requests to know and be part of their succession plans, profits at some point will suffer. Eventually, it will become less painful to tackle succession head on than to disregard it and live with the business loss.

Holdout firms must ask themselves how long they can afford to be careless of their clients’ concerns. This push-pull between client demands for succession transparency and law firm apathy isn’t going away. But firms that embrace the trend, showing their clients they’re listening, are sure to prosper.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

David Wood is a retired senior partner of Barnes & Thornburg who advises law firms about retirement succession for law firms.

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To contact the editors responsible for this story: Rebecca Baker at [email protected] ; Melanie Cohen at [email protected]

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