Do you have a marketing background but are tired of working for someone else? You could open your own marketing consulting business to use your skills, be on your own time, and make a good living.
A marketing consulting business helps to build branding and develop marketing strategies for businesses. They may also offer marketing design services and content writing.
According to Statista, the marketing services industry size is $475 billion globally, with over half of that being in the United States. According to IBIS World, there are 216,519 marketing consulting firms in the United States as of 2021.
The industry is being dominated by digital marketing since a large percentage of people search for products and services online. The pandemic increased this push to digital and also impacted the marketing strategies employed.
Your target market will be small to medium-sized businesses needing marketing services and strategies.
Skills, Experience, and Education Useful in Running a Marketing Consulting Business
There are several specific skills that you will need to open a marketing consulting business.
- Experience. Experience working in a marketing consulting business is valuable, particularly in management.
- Education. A degree in business or marketing would be a huge advantage.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Costs to Start a Marketing Consulting Business
Here are the typical costs you will face when you open a marketing consulting business.
- Website setup $100 –$200 for a basic, do it yourself website, $1,000 – $5,000 for a professional site
- Office equipment $1,500 – $3,000
- Initial marketing such as Facebook ads or search engine optimization for your website $500 -$1,000
Steps to Starting a Marketing Consulting Business
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your marketing consulting business should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, what sets your consulting services apart from the competitors, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.
Step 2: Name the Business
Finding the perfect marketing consulting business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Structure
A business structure refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 4: Select your Location
Next, determine if you want to work from your home office or rent an office somewhere. Renting office space can be very expensive and may not be necessary to start a marketing consulting business.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
While specific licensing is rare for marketing consultants, there are still general requirements for starting a business, such as a business license, sales tax permit, and Employer Identification Number (EIN).
Additionally, special certifications may help your company demonstrate education or experience and provide an edge over the competition.
Step 6: Find Financing
While the cost to start a marketing consulting business can be started without outside funding, it may be necessary to get a loan. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
A marketing consulting business will need to set aside a budget to cover marketing costs on a continuous basis.
A website and active social media marketing can help attract new clients and give your marketing consulting business greater visibility online.
Most importantly, a portfolio will be key to showing potential clients the quality of your work. As you complete more work, testimonials from satisfied clients should be used in marketing the business.
Step 9: Get Insurance
A marketing consulting business needs several types of small business insurance for full coverage:
General liability insurance can help protect you from third-party claims of bodily injury and property damage.
Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hiring Employees
You may need employees to help you run your marketing consulting business. Make sure that you select people with appropriate experience and training.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your marketing consulting business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
How Much Can You Potentially Make Owning a Marketing Consulting Business?
The average marketing consultant earns over $53,000 per year.
Things to Consider Before Starting a Marketing Consulting Business
Running a successful consulting business or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.
Marketing and acquiring customers will be your biggest challenge and an ongoing expense. Online marketing and search engine optimization will be your biggest source of customers, so you will need to have a budget for that.
While most start by offering a wide array of services, many successful marketing consultants focus on a particular area of expertise where they can deliver the most value (and profits).
You will face competition, so you need to offer high-quality services and good customer service at competitive prices.
Talk to other small business owners for tips on starting a business and do your homework to determine costs. Research other marketing consulting businesses to see what they offer and what prices they charge.