Over the past 20+ years, we have helped over 10,000 entrepreneurs and consultants create business plans to start and grow their consulting businesses. On this page, we will first give you some background information with regards to the importance of the business planning process. We will then go through a consulting business plan template step-by-step so you can create your plan today. It can be used to create a business consulting business plan, a management consulting business plan or any other type of consultancy business plan.
What is a Consulting Business Plan?
A business plan provides a snapshot of your consulting firm 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 a Consulting Firm
If you’re looking to start a consulting business or grow your existing consulting firm you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your consulting business in order to improve your chances of success. Your consulting business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Consulting Firms
With regards to funding, the main sources of capital raising for a 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 loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a consulting business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.
How To Write an Effective Consulting Business Plan
Your business plan should include 10 key components as follows:
- Executive Summary
- Company Overview
- Industry Analysis
- Customer Analysis
- Competitive Analysis
- Marketing Plan
- Operations Plan
- Management Team
- Financial Plan
- Appendix
Executive Summary
Your executive summary provides an introduction to your 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 consulting business you are operating and the status; for example, are you a starting a consulting firm, or do you have a consulting business that you would like to grow?
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the consulting industry. Discuss the type of consulting business you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing strategy. 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 consulting business you are operating.
For example, you might operate one of the following types:
- IT Consulting: this type of consulting business designs custom software, plans for IT system infrastructure, and/or manages computer systems and data processing facilities.
- Management Consulting: this type of consulting business provides advice to businesses, nonprofits, and agencies in various areas such as corporate strategy, marketing, organizational design, etc.
- Environmental Consulting: this type of consulting business provides advice on environmental issues such as pollution, hazardous materials, etc.
- Human Resources Consulting: this type of consulting business provides advice for structuring human resources and personnel policies, employee benefits, compensation, recruitment, and retention
- Other Business Consulting: there are many industries in which people need and will pay for consulting services
In addition to explaining the type of consulting business you 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 is your business model? Explain how you plan to generate revenue.
- What milestones have you achieved to date? Milestones could include financial objectives, sales goals you’ve reached, new office openings, new products, etc.
- Your legal structure. Are you incorporated as an S-Corp? A Limited Liability Company (LLC)? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry analysis, you need to provide an overview of the consulting business.
While this may seem unnecessary, it serves multiple purposes.
First, researching the consulting 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 consultant business plan:
- How big is the consulting business (in dollars)?
- How big is your niche (e.g., management consulting) within the consulting business (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 consulting firm? 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 consulting business plan must detail the clients you serve and/or expect to serve.
The following are examples of ideal customer segments for a consulting firm: Corporations, Federal Government, Nonprofits, Consumers, etc.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of consulting business you operate. Clearly, nonprofit organizations would want different pricing and service delivery options and would respond to different marketing strategies than the federal government.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the business sizes and types, or consumer ages, genders, locations, and income levels of the clients you seek to serve.
Psychographic profiles explain the wants and needs of your target audience. The more you can understand and define these needs, the better you will do in attracting and retaining your clients.
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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 consultants and consulting firms.
Indirect competitors are other options that potential clients have to purchase from that aren’t direct competitors. This includes doing it themselves and in-house expertise among others. You need to mention such competition to show you understand that not every company or consumer engages an experienced consultant.
With regards to direct competition, you want to detail the other consulting businesses with which you compete.
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 clients do they serve?
- What consulting services do they offer?
- What are their pricing strategies (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
The final part of this section is to document your areas of competitive edge or your unique selling proposition. For example:
- Will you provide superior services?
- Will you provide services that your competitors don’t offer?
- Will you make it easier or faster for more clients to engage your services?
- 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 a consultant business plan, your marketing plan should include the following:
Product: in the product section you should reiterate the type of consulting business that you documented in your Company Analysis. Then, detail the specific consulting services you will be offering. For example, in addition to IT infrastructure consulting, will you also offer an IT Security component?
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 consulting services you offer and their prices.
Place: Place refers to the physical location of your consulting business. Document your location and mention how the location might impact your consulting success. For example, maybe your consulting business is located in an office complex with lots of potential clients.
Promotions: the final part of your marketing plan is the promotions section. Here you will document how you will attract clients to your location(s). The following are some promotional methods you might consider as a consultant:
- Pay-per-click keyword advertising
- Providing seminars or keynote presentations
- Advertising in local papers and magazines
- Reaching out to local bloggers and websites
- Flyers
- Social media platforms
- Local radio advertising
- Email marketing
- Content marketing
- Networking events
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 consulting company such as serving clients, prospecting new clients, procuring supplies, keeping the office clean, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 100th client, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or open a new business location.
Management Team
To demonstrate your ability to be a successful consultant, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in the consulting business. If so, highlight this industry 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 local business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in consulting businesses and/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.
Income Statement
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you serve 5 clients per month or 25? 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.
Projected Balance Sheets
While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your consulting business, that 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 $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a consulting business:
- Office space build-out including design fees, construction, etc.
- Cost of maintaining an infrastructure (i.e. data warehouse, database subscriptions, etc.)
- Payroll or salaries paid to staff
- Office equipment and other supplies
- Business insurance
- Taxes and permits
- Legal expenses
- Other expenses
Appendix
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your consulting business plan more compelling. For example, you might include your office design blueprint or location lease.
Summary
Putting together a business plan for your consulting agency will improve your company’s chances of success. The process of developing your plan will help you better understand the consulting market, your competition, and your customers. You will also gain a marketing plan to better attract and serve customers, an operations plan to focus your efforts, and financial projections that give you goals to strive for and keep your company focused.
Free Consultant Business Plan Template PDF
You can download our consulting business plan PDF template to help you get started on your own business plan.
Growthink’s Ultimate Consulting Business Plan Template allows you to quickly and easily complete your business plan. Our consultant business plan template has numerous features not available in the free template including its financial projections template which automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements.
Additional Resources for a Successful Consulting Business
- How to Start a Consulting Business
- 9 Effective Marketing Strategies for Consultants
- Pricing Your Services as a Consultant
Finish Your Consulting Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your Consulting business plan?
With Growthink’s Ultimate Consulting Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your Consulting business plan today.
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.
Click here to see how Growthink’s business plan consulting services can create your business plan for you.
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