Consulting Business Plan Guide + Free Example

July 6, 2023

Adam Hoeksema

The consulting industry offers vast opportunities, and while some might believe that running a consulting agency is straightforward, involving only client meetings and providing expert advice, careful planning and meticulous execution are essential for achieving success, hence a well-structured business plan is indispensable.

Our primary expertise lies in creating consulting agency financial projections, but we recognize that some of our clients require comprehensive business plans. That's why we've taken the initiative to delve into this topic and cover the following:

Why write a business plan for a consulting agency?

For consulting agency proprietors seeking financial support from investors, banks, or financial institutions, a well-structured business plan is an essential requirement. Demonstrating a comprehensive analysis of the market, a clear and strategic approach to client acquisition and service delivery, and a thoughtful assessment of potential risks and rewards is vital to securing the necessary funding for your venture. This provides both a roadmap for the agency's growth and assurance to potential investors that the business is robust and well-equipped to navigate industry challenges.

What to include in a consulting firm business plan?

A consulting agency business plan should outline for investors and lenders the compelling reasons why clients will select your services over others in the market, highlight the qualifications and expertise of you and your team in delivering consulting services, and present a robust financial projection that validates the security of their investment. Below is a comprehensive outline of our complimentary consulting agency business plan template.

Consulting Agency Business Plan Outline

We suggest the following sections for your consulting agency business plan

Executive Summary

Company Description

Market Analysis

Product and Service Offerings

Marketing Plan & Customer Acquisition

Operating Plan

Financial Plan

How to Determine the Market Demand for My Consulting Services?

Analyzing the market for consulting services is essential to understanding your potential clients, competitors, and the overall landscape of the industry. Here's a step-by-step guide tailored for consulting services:

Identify Your Target Audience: Determine who your potential clients are. Are you targeting corporations, small businesses, non-profits, individuals, or specific industries? Understanding the unique needs and problems of these segments will help you tailor your services.

Market Size Estimation: Gauge the size of your potential market. This might include the number of businesses or professionals in a particular industry, region, or demographic segment. 

Competitor Analysis: Assess who your competitors are, their offerings, pricing strategies, marketing approaches, client reviews, and market share. This can help you find opportunities and differentiators for your consulting business.

Trend Analysis: Use Google Trends to see trends in popularity in your market. If we examine the consulting services industry, for example, we can track the following seasonal trends and trends over the last 5 years for search terms related to specific types of consulting, "IT consulting." This can help you identify when demand for particular services might peak, allowing you to align your marketing and service offerings accordingly.

SWOT Analysis: Perform a SWOT analysis - strengths, weaknesses, opportunities, and threats related to your consulting service. This will help you identify your unique position in the market.

Pricing Analysis: Evaluate your competitors' pricing strategies and understand the budget constraints and willingness to pay among potential clients. This will help you set a price that's both competitive and profitable.

Customer Behavior and Preferences: Utilize surveys, interviews, and feedback to understand what drives client decisions. Consider their pain points, needs, and what influences their choice in selecting a consulting firm.

How to Analyze the Competition for a Consulting Firm?

When analyzing the competition in the consulting agency industry, there are several useful tools at your disposal. One of the key tools I recommend using is Ahrefs.

Ahrefs is a powerful SEO tool that allows you to research and analyze your competitor consulting agencies' online presence. By entering a competitor's website into Ahrefs, you can gain valuable insights into their organic traffic and the keywords driving that traffic. For example, we can see that Exact IT is receiving roughly 250 monthly organic traffic visitors. 

The tool provides data on the competitor's organic traffic and highlights the specific keywords that are bringing visitors to their website.  For example, they are ranking for 498 keywords and below you can see the keywords that are bringing the most traffic to the site. 

By understanding the keywords and SEO strategies that competitor consulting agencies are employing, you can tailor your content and marketing approach to compete effectively in the same spaces or identify niche areas that are underserved. This knowledge can help improve your consulting agency's online visibility, attract more clients through search engines, and position your business for success in the competitive consulting industry.

LinkedIn is a powerful platform for professional networking and can be a goldmine for competitor analysis. By searching for the names of consulting agencies or specific individuals who work for them, you can gather valuable information about their company size, services offered, client base, and recent updates or publications. Additionally, you can follow their company pages and employees to receive updates on their activities, such as new hires, client wins, and thought leadership content.

How to Create Financial Projections for a Consulting Firm?

Just like in any industry, the consulting agency business has its unique factors that impact financial projections, such as client acquisition rates, project size and complexity, billable hours, and overhead expenses. Utilizing a consulting-specific financial projection template can simplify the process and increase your confidence. Creating accurate financial projections goes beyond showcasing your consulting agency's ability to secure contracts; it's about illustrating the financial roadmap to profitability and the realization of your firm's growth goals. To develop precise projections, consider the following key steps:

Estimate Startup Costs: These might include office space, professional certifications, legal and insurance costs, technology setup, and initial marketing and branding efforts.

Forecast Revenue: Base this on projected client acquisition, average project value, billable hours, retainer agreements, and potential growth in client base or expansion into new service areas.

Project Costs: Include costs related to staffing, subcontractors if needed, travel and accommodation for client meetings, and any other expenses specifically related to delivering your consulting services.

Estimate Operating Expenses: Regular overheads like rent, utilities, office supplies, technology and software subscriptions, marketing expenses, and administrative salaries.

Calculate the Capital Needed: This should cover both the initial expenses to launch the consulting agency and provide working capital for continued growth and operational expenses until the business reaches sustainable profitability.

Seek Guidance from Experienced Professionals: While financial projections are a critical component of your consulting agency business plan, don't hesitate to seek expert advice. Adapt your projections based on real-world insights, leverage industry resources, and stay informed about trends and best practices in the consulting world to ensure your financial plan aligns with your goals and positions your consulting agency for long-term success

Consulting Agency Business Plan Sample

Delve into our Consulting Agency Business Plan, available for your review below. If you desire more customization, a Google Doc version of this consulting agency business plan template is accessible for download, enabling you to modify it to fit your unique needs and strategies. For your convenience, an accompanying video tutorial is also provided, directing you through the method of tailoring the business plan to perfectly resonate with your specific consulting agency's goals and identity.

Table of Contents

1. Executive Summary

1.1 Organization Overview

1.2. Objectives

1.3. Mission Statement

2. Organization Description

2.1. Organization History

2.2. Legal Structure

2.3. Unique Value Proposition

2.4. Target Beneficiaries

3. Market Analysis

3.1. Industry Overview

3.2. Collaborator and Competitor Identification

3.3. Target Beneficiaries

Key Point  1

4. Marketing and Fundraising

4.1. Strategic Plan

4.2. Program or Service Offerings:

4.4. Distribution Channels

4.5. Promotions and Fundraising

Key Point  2

5. Organizational Structure and Management

5.1. Organization’s Facility & Location

5.2. Staffing Plan and Volunteer Management

5.3. Governance, Financial Management, and Accountability

Key Point  3

6. Financial Plan

6.1. Startup Costs

6.3. Expense Projections

6.4. Profit and Loss Statement

6.5. Cash Flow Projections

6.6. Break-even Analysis

Key Point

7. Appendix

7.1. Supporting Documents

7.2. Glossary of Term

7.3. References and Resources

Key Point  5

1. Executive Summary

 1.1. Company Overview

Briefly introduce the company's background, products or services, and target market.

      -  Example: TalentEdge Consulting is a premier HR consulting firm based in Denver, Colorado, specializing in providing comprehensive human resources solutions to businesses of all sizes. Our services range from talent acquisition and employee development to HR strategy and compliance.

   1.2. Objectives

Outlines the company's short-term and long-term goals.

        - Example: Short-term: Establish TalentEdge Consulting as a trusted partner for businesses in Denver. Within the first year, we aim to secure partnerships with at least 100 businesses.

        - Example: Long-term: expand our presence beyond Denver and become a leading HR consulting firm in the region, known for our expertise, exceptional client service, and measurable impact on businesses.

  1.3. Mission Statement

 Describes the company's purpose and core values.

        - Example: We are dedicated to providing customized and  effective HR strategies and solutions that align with our client's unique needs, foster a positive work environment, and unlock their full human potential.

 1.4. Keys to Success

Highlights the factors that will contribute to the company's growth and success.

        - Example: By leveraging our in-depth industry expertise in HR best practices, tailoring HR solutions that address our client's specific challenges and goals, and by continual innovation to stay ahead of emerging HR trends and technologies, TalentEdge Consulting is poised to become the go-to HR consulting firm for businesses seeking strategic and impactful HR solutions in Denver and beyond.

2. Company Description

   2.1. Company History

Provides context on the company's background and founding story.

        - Example: TalentEdge Consulting was founded by Rosetta Tanner, an experienced HR professional with a passion for driving organizational success through effective people strategies. With a background in talent management and HR consulting, Rosetta established the firm in Denver, Colorado, to provide businesses with expert HR guidance and support.

   2.2. Legal Structure

 Describes the company's legal structure (e.g., sole proprietorship, partnership, LLC, corporation).

        - Example: TalentEdge Consulting operates as a sole proprietorship owned by Rosetta Tanner.

 2.3. Unique Selling Proposition

 Emphasizes the company's competitive advantage or unique offerings.

        - Example: TalentEdge Consulting differentiates itself by offering holistic and tailored HR solutions that align with each client's unique business needs. Our focus on practical implementation and measurable results sets us apart, ensuring that our clients experience tangible improvements in their HR practices and overall organizational performance.

  2.4. Target Market

Defines the company's ideal customer base.

        - Example: We serves businesses in Denver, Colorado, across various industries and sizes. We cater to businesses seeking to optimize their talent acquisition, employee engagement, performance management, compliance, and HR strategy for long-term success.

3. Market Analysis

3.1. Industry Overview

 Presents a general overview of the industry, its trends, and growth potential.

        - Example: As businesses in Denver, CO recognizes the importance of effective HR practices in driving organizational success, the demand for specialized HR consulting services is increasing. Factors such as evolving labor laws, workforce diversity, and the need for talent management contribute to the growth potential of the industry.

3.2. Competitor Analysis

 Evaluates the company's direct and indirect competitors, as well as their strengths and weaknesses.

        - Example: Direct competitors: HR Solutions Inc.: A boutique HR consultancy known for its expertise in leadership development and talent acquisition.

        - Example: Indirect competitors:  In-house HR departments: Larger organizations with dedicated HR teams may choose to handle HR functions internally.

3.3. Target Market Analysis

Explores the company's target customers, their demographics, preferences, and pain points.

        - Example: TalentEdge Solutions targets small and medium-sized businesses in Denver, Colorado, across various industries. Our ideal clients include startups, growing businesses, and companies undergoing organizational changes.

3.4. Market Opportunities

Identifies potential opportunities for the company to grow within the market.

        - Example: TalentEdge Solutions can seize market opportunities by leveraging digital marketing, offer specialized HR solutions, forge strategic partnerships, stay ahead of HR trends, and target niche markets to expand brand visibility, attract clients, generate referrals, provide cutting-edge services, and establish leadership in specific industry sectors.

Key Point  1

  • Example 1: Conduct a survey among local businesses to assess their HR consulting needs and challenges. This will provide insights into the demand for specialized HR solutions in the area. (e.g., 80% of surveyed businesses express a need for talent acquisition and retention strategies)
  • Example 2: Analyze industry reports and local employment trends to identify areas of growth and emerging HR challenges. This will help tailor TalentEdge Consulting's services to address specific market needs. (e.g., Denver's technology sector has experienced a 15% annual growth rate, indicating a potential demand for HR solutions in this industry)
  • Example 3: Analyze the top competitors in the area to understand what services they are offering, and what things you may be able to specialize in to compete or steal some customer base. Do an SEO/keyword analysis of your competitors to see what keywords they are ranking for and what opportunities there would be to steal some of that website traffic through ads or organic SEO
  • Example 4: Perform keyword research related to your specific professional service/industry to see growth trends

4. Marketing and Sales Strategy

4.1. Product or Service Offerings: 

Describes the company's products or services in detail.

        - Example: TalentEdge Solutions offers a comprehensive suite of HR consulting services, including talent acquisition and management, leadership development, performance management, employee engagement, HR policy development, and HR technology implementation.

4.2. Pricing Strategy

 Outlines the company's approach to pricing its products or services.

        - Example: TalentEdge Solutions adopts a flexible pricing structure tailored to the unique needs and budget of each client, ensuring cost-effectiveness and maximizing value for their investment in HR solutions.

4.3. Sales Strategy

 Explains how the company plans to generate sales and build

customer relationships.

        - Example:  We will leverage networking events, industry conferences, and referrals to generate leads and establish strategic partnerships with local businesses and organizations in Denver, CO.

4.4. Distribution Channels

 Describes the methods through which the company will deliver its products or services to customers.

        - Example: TalentEdge Solutions delivers its services through personalized client engagements, utilizing a combination of on-site consultations, virtual meetings, and collaborative technology platforms to ensure seamless communication and service delivery.

4.5. Promotions and Advertising

 Details the company's promotional efforts and advertising strategies.

        - Example: TalentEdge Solutions implements targeted marketing campaigns, leveraging digital channels, industry events, and professional networks to raise awareness about their expertise, showcase thought leadership, and attract potential clients in the Denver, CO area.

Key Point  2

  • Example 1: Begin offering Recruiting & talent finding services as an independent freelancer with some local companies to demonstrate success and traction before expanding the business.
  • Example 2: Host free HR workshops and seminars for local businesses to showcase TalentEdge Consulting's expertise and establish credibility in the market. (e.g., 50 attendees participate in a workshop on effective performance management, generating positive testimonials and potential leads)
  • Example 3: Create a social media following providing tips to people trying to find a job as well as tips to small businesses looking to hire people.

5. Operations and Management

5.1. Organizational Structure

Outline the company's organizational structure, including key roles and responsibilities within the HR consulting firm.

        - Example: TalentEdge Solutions will have a flat organizational structure, with a core team consisting of HR consultants, specialists, and administrative staff. The CEO, Rosetta Tanner, will oversee overall operations and strategic direction.

5.2. Team Development and Management

Describe how the company will attract, develop, and manage a skilled team of HR professionals.

        - Example: TalentEdge Solutions will focus on recruiting experienced HR consultants with diverse expertise and a strong track record. The company will provide ongoing professional development, training, and mentorship programs to enhance skills and ensure the team stays updated on industry trends and best practices.

5.3. Quality Assurance

Explain the measures the company will implement to ensure the delivery of high-quality HR consulting services.

        - Example:  TalentEdge Solutions will establish a comprehensive quality assurance framework, including regular performance evaluations, client feedback surveys, and internal audits. This will ensure consistent delivery of tailored, effective, and compliant HR solutions to clients.

Key Point  3

  • Example: The founder of TalentEdge Consulting, Rosetta Tanner, brings 15 years of experience in HR management across various industries, including healthcare and technology. Her expertise ensures that the company stays updated with industry best practices and can provide valuable insights to clients.

5.4. Technology and Systems

Highlight the technology and systems the company will utilize to streamline operations and enhance service delivery.

        - Example: TalentEdge Solutions will leverage advanced HR software and systems to automate administrative tasks, streamline recruitment and talent management processes, and enhance data security. The company will also implement a client management system to efficiently track client interactions and deliver personalized HR solutions.

All of the unique Professional Service  projections you see here were generated using ProjectionHub’s Professional Service Financial Projection Template. Use PH20BP to enjoy a 20% discount on the template. 

6. Financial Plan

   6.1. Startup Costs

 Provide a detailed breakdown of the total startup costs requirements, and where you plan for those funds to come from. You will also want to breakdown how the startup costs will be used including working capital to cover losses before the business breaks even.

        - Example: Creating a solid financial plan is crucial, and we are taking the necessary steps to ensure the success of TalentEdge. Based on our projections, we actually plan to break even relatively quickly by choosing to be as lean as possible in year 1 so we have limited starting capital needs. We plan to begin with$25,000 in cash from person investment from the owner and are seeking a $50,000 SBA microloan to provide a cash buffer to help with unforeseen expenses and working capital.

6.2. Revenue Projections

Provides an estimate of the company's future revenue based on market research and assumptions.

        - Example:  TalentEdge projects $300,000 in revenue in the first year. The company anticipates steady growth in revenue over the initial five-year period.

6.3. Expense Projections

 Estimates the company's future expenses, including fixed and variable costs.

        - Example: TalentEdge is choosing to keep overhead as low as possible in the first year and willow wait to secure a physical office space until year 2 as well as expanding the labor force considerably.

6.4. Profit and Loss Statement

Summarizes the company's revenue, expenses, and net income over a specific period.

        - Example: TalentEdge expects to achieve sustainable profitability in year 3 of operation.

6.5. Cash Flow Projections

 Outlines the company's projected cash inflows and outflows.

        - Example: TalentEdge cash flow projections demonstrate how we’ll handle cash outflows during growth events like securing an office space and hiring more team members.

6.6. Break-even Analysis

 Determines the point at which the company's revenue equals its expenses.

        - Example: TalentEdge anticipates reaching its sustainable break-even point in year 3 of operation.

Watch how to create financial projections for your Professional Service Firm

Key Point  4 

  • Example 1: Benchmark financial projections against industry standards to ensure realistic revenue and expense estimates. (e.g., The average billing rate for HR consulting firms in Denver is $150 per hour, which aligns with TalentEdge Consulting's projected rates)
  • Example 2: Evaluate the potential impact of market fluctuations on financial projections, such as changes in labor regulations or economic conditions. (e.g., A 10% decrease in business expansions could result in a 5% decrease in TalentEdge Consulting's revenue)

7. Appendix

   7.1. Supporting Documents

 Includes any relevant documentation that supports the information presented in the business plan, such as resumes, financial projections, market research data, and permits or licenses.

   7.2. Glossary of Term

 Provides definitions for industry-specific terms used throughout the business plan to ensure reader comprehension.

   7.3. References and Resources

Lists any sources or resources referenced during the preparation of the business plan, including industry reports, market research data, and relevant publications.

Key Point 5

  • Example: Rosetta Tanner and the founding team of TalentEdge Consulting invest personal funds into the business to cover startup costs and demonstrate their commitment to the venture. This personal investment showcases their dedication and shared risk, increasing confidence among lenders and potential partners.

Consulting Business Plan FAQs

How do I start a consulting or professional services business?

To start a consulting or professional services business, define your area of expertise, identify your target market, develop a business plan, establish your pricing structure, create a marketing strategy, build a professional network, and continuously enhance your knowledge and skills.

What types of consulting services are in high demand?

Consulting services that are often in high demand include management consulting, IT consulting, marketing consulting, financial consulting, HR consulting, business strategy consulting, and niche-specific consulting services tailored to specific industries or challenges.

How can I find clients for my consulting business?

To find clients, leverage your professional network and relationships, participate in industry events and conferences, offer valuable content through thought leadership articles or blog posts, utilize social media platforms, and seek referrals from satisfied clients or business partners.

How can I demonstrate the value of my consulting services to potential clients?

Demonstrate the value of your consulting services by showcasing past client success stories or case studies, highlighting your expertise and qualifications, offering free initial consultations or assessments, providing testimonials from satisfied clients, and emphasizing the tangible results or improvements your services can bring.

How can I scale my consulting business?

To scale your consulting business, consider hiring additional consultants or subcontractors, developing scalable systems and processes, expanding your service offerings or target markets, leveraging technology to automate certain tasks, and establishing strategic partnerships or collaborations with other professionals or firms.

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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