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How to Start an HR Consulting Business

So you’re ready to venture out on your own. I bet you’re wondering what comes next. You are not alone. Around the world there are thousands of independent HR Consultants and small consultancies who have taken the very step that you’ve been fantasizing about.

Being your own boss sounds like a dream and in so many ways it is, but running a business requires strategic thinking, meticulous planning, and a high degree of resilience.

So let’s get this new business party started shall we!!!

As an entrepreneur and someone who has taken this exact step, there are many things that you will want to start thinking about as you plan this exciting venture. 

Start with some self-reflection

Why do you want to start a business? What are your business and lifestyle goals? Just as when we take a job working for somebody, we do so to enrich our overall life. The same is true for entrepreneurship. Many of us venture out to solve bigger problems and use our skills to stretch our impact beyond a single organization. Some opt to be self-employed to expand their creative freedom and/or lifestyle such as working remotely. And for many, it is all of the above. When we are clear on what we want to achieve, we’re more likely to get there.

Plan financially

Starting a business requires financial resources. Unlike full-time employment, there is no guaranteed paycheck, so having savings to support your ramp up and the funding of your business expenses is something you want to consider early on.

Consider your legal structure

From sole proprietorship to an incorporated business, there are several ways to structure your new enterprise. Each has their own unique set of pros and cons. Obtaining proper professional advice on the optimal structure early on can help mitigate risk downstream and set your business up for success.

HR Biz School - how to start an HR consultancy

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Determining your target market and service offering 

When starting a Human Resources consultancy, one needs to decide if they will specialize or offer generalized consulting services. There are many benefits to selecting a niche and doubling down on your support and expertise for a very specific target market. This helps build recognition in market, can help with search discoverability and SEO, as well as optimize the competitive landscape.

Naming your company

Depending on your jurisdiction and legal structure, the process for naming your company can be different.  When we select a name that is very service-specific, it may limit our ability to grow and expand our service offering downstream. But there are benefits such as a strong association between your business and that particular service. It’s important to balance your long-term business goals with the benefit of increased brand recognition with that service early on.

Taxes can be taxing

Once you become a business owner, there are additional tax obligations that you’ll need to familiarize yourself with. These include sales tax for your jurisdiction, international tax obligations depending on what services you are providing and where you are providing them, as well as employer payroll obligations should you hire employees downstream.

Partners and tools for success

Next up is building a strong toolkit with the technology and partners you will need to run your business. This includes your lawyer, accountant, website, document/communication suite, and the list goes on. It’s a good idea to consider the growth of your business as you select various tools, partners, & contracts. This will allow you to scale your business with a sound infrastructure supporting your expansion.

Sales and marketing

As a Human Resources consultant, you may not have thought about business development but in order to have a thriving business, one must understand business development fundamentals, the sales cycle, as well as branding and marketing principles. This is a great time to be honest with yourself around your gifts and talents and to seek support from experts should this not be a natural ability of yours.

Build your brand

Next, it’s time to grow awareness and build your brand in the market. Being an HR expert, you have knowledge that can serve your target audience. Sharing some of that knowledge and adding value to the HR ecosystem can add just as much value to your business and increase brand equity. After all, sharing is caring!

Contracts and your first gig

It’s almost time for your first gig. Congrats! Before you get started with your new client, it’s a wise idea to have a strong contract in place that defines the scope of the engagement, as well the terms and conditions, allowing both parties to enter into the arrangement with clarity around expected outcomes. This will allow you to service your customers with greater ease and will support a high level of client satisfaction.

 

Well, there you have it HR pro, starting an HR consultancy can feel overwhelming at first but I speak from personal experience, the road of entrepreneurship has been one of the most fulfilling journeys of my life. If you’re looking for support on your entrepreneurial adventure, you may want to check out our new course HR Biz School where we share our lessons learned, dispel myths, provide clarity and tools to support an easier ramp up for you and your growing business. It’s like having a map versus wandering alone.

HR Biz School – Start & Grow Your HR Consultancy

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Get to know Powerhouse Talent. Wishing you peace, love, and meaningful careers!