While having a consulting business plan is not required for you as an independent consultant (unless you’re seeking external funding or a loan), the consulting business plan is something you’ll want to require of yourself as a business owner.
This is one of the most common mistakes I see consultants making — the mistake is NOT building a business plan for their consulting businesses.
How do I know creating a business plan for a consulting service is so important?
I made this mistake for the first four or five years in my own consulting business. And, I paid the price for it - by making a lot less money than I was capable (50% to 100% less) and also by working much more than I needed to, to make that money.
I didn’t write a business plan when I first launched my consulting business 10+ years ago because:
So, I didn’t write any sort of business plan.
But then, everything changed.
One of my business coaches helped me see the idea of a business plan from a different perspective. The consulting business plan didn’t need to be some type of formal document or a thesis. I was thinking about the consulting business plan much too literally (as we consultants tend to do).
My coach encouraged me to use a business plan as a mechanism to map out plans to hit bigger-picture goals in the next 3-5 years. And, I realized that creating a consulting business plan was the best way to:
The business plan I created for my consulting business changed everything for me.
I started improving at marketing and sales.
I 10x’d my income.
I work less.
I increased my impact exponentially.
I want you to have this too.
Whether you’ve been in business for 2 months or 20 years, this is an important step. And, in this article, I’ll walk you through exactly how to create a business plan for your consulting business so you:
A consulting business plan is a roadmap that you develop so you know what the big picture is for your business and how you’re going to achieve it.
A consulting business plan is a living document that you’ll want to keep up-to-date as part of your annual and quarterly planning, so it reflects your latest goals and vision.
The consulting business plan serves as a guide for the decisions you make, so you’re running your business intentionally and not inadvertently creating a “Franken-Business.” A “Fraken-Business” is the type of consulting business that forms when you make decisions and set priorities on the fly, without having an overarching consulting business plan in place.
Ultimately, these decisions lead to your business looking more like a “Frankenstein” where you’re earning less than you’re capable of and working so much more than you have to.
To write a business plan for a consulting business, you'll want to think about your short-term, medium-term, and long-term goals.
Do you want to build a small boutique consulting firm, or micro-boutique consulting firm, or stay on the independent consulting path? Based on your big picture, and ultimate exit strategy, you can then reverse engineer your consulting business plan based on this vision.
Writing a business plan for a consulting business is crucial for outlining your goals, strategies, and operations. It serves as a roadmap for your business and can help guide your growth. This is a tool for you to run your business and to be able to see the big picture.
Typically you won't be providing a consulting business plan to get funding. As a result, it doesn't need to be a formal business plan. Instead, you want to write the consulting business plan in such as a way as it gives you a solid plan for growing and sustaining your business, for achieving your own business goals, and sets you up for your longer-term exit strategy whether that's in 5 years or 55 years.
If you’re writing your consulting business plan for potential investors, then you’ll want to follow a more prescriptive approach.
But, that’s most likely not the case for you as an independent consultant.
You get to write the consulting business plan for yourself, as a guide for the decisions and priorities you make for your business.
Here’s a list of topics to include in your consulting business plan:
Let’s dive into each of these sections so you know exactly what to put into each section of your business plan for a consulting service.
First, describe what you want your independent consulting business to look like in the next three years. Answer this question from the perspective of - if anything is possible for me and my business, what do I want my independent consulting business to look like?
Dream big.
Don’t constrain based on what’s practical.
Don’t play it safe.
Write out everything you want to achieve with your business, even if some of the goals feel like they’re in conflict.
Setting your 3-year business goals is important because you want to know exactly where you want your business to grow in the future, so you make decisions with that direction in mind, as opposed to letting your business happen to you.
And then, break down your 3-year goals into:
Next, describe the types of clients you want to work with. This is:
Then, write out all your independent consulting service offerings. Then, for each current and planned consulting service offering, you’ll describe:
Then, detail your pricing for each of your consulting offers, including:
Next, map out the marketing strategy for your consulting services, so you create awareness and demand for what you offer as an independent consultant.
The elements of the marketing section of your consulting business plan are:
The marketing strategies will resonate with your potential clients:
The type of marketing you want to implement in your business:
Bring these two components together into your marketing strategy - what resonates most with your ideal clients + what you want to do as a business owner = your aligned independent consulting marketing strategy.
And, your goals for # of leads needed per quarter to hit your sales goals.
For more on this, listen to Episode 067 of the Grow Your Independent Consulting Business podcast.
The next section of your consulting business plan is the “effective sales engine.” In this section, you want to define:
The next section of the consulting business plan is your utilization plan and your company’s business calendar. Get clear on:
The “fueling your business plan” section of the consulting business plan is crucial, and most independent consultants miss this step.
The fuel for your consulting business plan is:
In this section, you want to think about how will you think about all of these topics from the vantage point of already achieving your 3-year goal:
Then, break down your 3-year plan into quarterly focus areas. Think about the one result that you want to accomplish in the quarter that will move your business forward toward the 3-year business.
Examples of Quarterly Focus Projects for your independent consulting business are:
Learn more about this in Episode 80 of the Grow Your Independent Consulting Business Podcast.
Finally, pull all of your components from the consulting business plan together into a prioritized, rolling 12-month plan that results in making the achievement of your 3-year goals inevitable.
After you develop your in-depth consulting business plan, it’s helpful to summarize it into a one-page business plan that serves as your guide for all the decisions, priorities, and actions you take in your business.
The benefits of a one-page consulting business plan are:
Here are the 5 steps to create a one-page consulting business plan that will guide you and your business over the next 12 months:
First, look at your big picture and 3-year goal and pull out all the plans you set forth for the first year of that plan.
Figure out what you would need to be charging per engagement to hit or even exceed your financial (revenue, profitability, and income) goals within the constraints of your ideal schedule.
This might come out to be a large number, a big increase over what you’re charging now. That’s not a problem.
You can get there if you start.
You can get there if you begin working toward it.
You can get there if you’re committed to it.
For more on how to increase your consulting fees, I recommend checking out our guide on How Independent Consultant Rates and Retainer Fees Work, as well as Episode 066 of the Grow Your Independent Consulting Business podcast, where I walk you through the 3 prerequisites to raising your consulting fees.
In this step of building your one-page consulting business plan for the next 12 months, we will think about your ideal client engagements. These can fall into the following categories:
If you are still working on defining your preferred consulting engagement type, it might help to ask yourself what is your ideal client load. For example, is it 5 clients at a time or 1 client at a time?
In this step of building your business plan, I also recommend exploring why you want these types of clients and engagements.
For example, some consultants choose to do longer-term, single-client-at-a-time consulting engagements because they want to feel less worried and nervous about their cash flow, despite their passion being around working with a variety of clients doing shorter-term and less hands-on work.
What I want you to know is that you don’t have to choose between security and following what you’re passionate about doing.
The goal of your business plan is to choose what you want in your business. That gives you a direction to head. You can find out how to create security and peace of mind with the business model you love.
Don’t choose what you think is easy. In my experience, no business model execution is as easy as it seems at first, and on top of that, if your business plan and personal goals are not aligned, you will feel miserable doing whatever you settled for.
With step number 3, you’ve mapped out what you want to include in your business plan in terms of client type and nature of consulting work.
In step number 4, we will build your ideal schedule into the business plan for the next 12 months. To get started, ask yourself what the ideal consulting year looks like to you. For example:
Ask yourself: What does the ideal look like for you over the next 12 months, without worrying about how much money you could be leaving on the table or if the plan is realistic?
The fifth component of your one-page consulting business plan is who you need to become in order to make achieving this business plan inevitable.
Your current business results are a reflection of your current mental models:
Another major component is how you manage your emotions, especially your ability to redirect doubt, ambivalence, and confusion into confidence, and commitment to your business on a daily basis.
To achieve new, bigger, and different business results, it’s essential to think differently. To accomplish your business model, you’ll need a new, more expanded mental model as a business owner.
Therefore, a crucial piece of your one-page consulting business plan is to get crystal clear about the version of you, your future self, who has achieved this business plan that works on auto-pilot.
Define that future self.
Name that future self.
Visualize that future version of you who has checked off all the boxes on your new consulting business plan, and that these results are a no-brainer for you to achieve every month without doing anything out of the ordinary.
Then take note of the following:
There are several common mistakes that independent consultants make with their business plan for a consulting service.
Most independent consultants skip the step of creating a consulting business plan. Independent consultants miss this important step for one (or all) of these reasons:
The second mistake is ont using a consulting business plan to guide your business decisions and priorities. When you make decisions in the moment and one at a time without a bigger picture in mind, you (as a human being) will have a bias toward choosing what’s easier in the moment. And when you make decisions on the fly, it’s common for them to fulfill a short-term need but then steer you off course and/or slow you down from reaching your bigger goals.
The third mistake is not referring back to and not maintaining your consulting business plan. Your consulting business plan is meant to be a living plan where you set your goals, vision, and action plans and then put them into motion. Then, periodically (quarterly at a minimum) you assess your progress against the plan and determine whether or not you want to adjust, add or remove anything.
This is a living roadmap for you and your business.
The mistake many consultants make is to treat it as a pass-fail examination and then feel like they’re failing if they don’t get 100% completion. This sets you up for disappointment as a business owner if you look at the consulting business plan this way.
Don’t torture yourself.
Instead, look at the business plan for your consulting service as a living, breathing roadmap that sets you up to achieve a specific set of goals via a planned direction. If you end up taking a little longer to achieve your goals or you choose to pivot slightly, that’s not a problem. Know that you’re setting yourself up to achieve more than you could even imagine if you implement this process over and over again with every 3-year increment.
After writing my own consulting business plans multiple times over the years, and also reviewing 100’s of independent consultants’ business plans, three tips stand out for writing a great consulting business plan.
Too many independent consultants think they should play it safe and set realistic and practical goals. The result? When you set realistic goals, you end up underachieving relative to what’s possible for you. I love to say that it’s so much better in the long run to achieve 80% of a big goal than 100% of a safe goal. It’s better for two reasons -
(1) 80% of a big goal is almost always much more rewarding (financially and personally) than 100% of a safe goal and
(2) you grow into the next level of yourself as a business owner when you’re pursuing a big goal as opposed to pursuing a realistic goal.
So many consultants tell me that they plan to change their business model or pricing because it’s what they’ve been told they should do to scale or grow. For example, one of the recommendations that are common in our industry is to switch to value-based pricing. While this might be the next best move for your business, don’t assume that it is just because a guru said so. Instead, decide how you what to run your business based on your own knowledge and skill set.
One of the most common mistakes I see independent consultants making is to assume you have to choose between things like making more money or working less time. Or, choose between taking on fulfilling, impactful work or making more money.
You don’t have to choose.
You can find a way to have whatever you want.
The key is to ask yourself high-quality questions such as “how can I make $1M working 3 days a week?”
Write out your business plan for your consulting service based on everything you want and then work to bring it to life. Don’t limit yourself from the outset because you assume you’ll have to sacrifice too much to get what you want.
Episode 064 will help you calculate your lead generation metrics, so you can back into how many leads and opportunities you need to create to hit your revenue goals.
Episode 048 will help you establish the operating policies for your business so you protect your capacity and avoid burnout. This episode will help you define the “Sustainable Utilization” component of your consulting business plan.
Download the Yearly Business Plan Workbook for Independent Consultants as a companion resource to this article. It will help you define your specific plan for growing your consulting business with more ease and fulfillment.
Now that you have the format and step-by-step process to create your business plan for a consulting servce, here are your next steps to ensure you make the most of this article.
Here are the specific steps for you to put this article into action so that you can be in control of the growth and trajectory of your consulting business:
Melisa is a private business coach for independent consultants. She helps IC business owners scale their business so they make more money, make more impact, and grow a business working on their own terms. Melisa is the host of the Grow Your Independent Consulting podcast and creator of the scale-IC Method™️.
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