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.

Related: How to write a business plan

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.

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the 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.

When deciding on which business entity is best for a marketing consulting business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: 3 steps to forming your LLC
 

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

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.

Related: What licenses do marketing consultants need?

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.

Related: Finding the money to start a business

Keeping your business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

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 a potential client the quality of your work. As you complete more work, testimonials from satisfied clients should be used in marketing the business.

While most marketing consulting companies 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).

Related: Low-cost ideas to market a new business

A marketing consulting business should consider several types of insurance to fully protect the business. A few of the more common types of insurance a marketing consulting company may need include:

– 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.

Related: Common types of insurance a business may need

Many marketing consulting companies will start out with the owner being the only employee. Some companies will outsource specific functions or handle overflow, but at some point, a growing firm will need additional employees to help complete projects.

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

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.

Related: Setting up the accounting for your business