Do you want to Start an HR consultancy business? Not sure how to go about it? Find in this article a detailed guide on how to start and run a successful hr consulting company.
Human resource consultancy is now a growing field. Businesses of every size need HR professionals to help them with tasks like recruitment, training, compliance, administration, and payroll. While large corporate may choose to outsource to the big HR consulting firms, small and medium-sized businesses are looking for more personalized human resource consulting services to fulfill their needs.
Is HR Consulting Business Profitable?
As this report suggests, there are more than 60,000 HR consulting companies in the US alone making revenue of over 23 billion US dollars.
Human resource consulting is increasingly popular with companies that have realized the cost-saving benefit of it instead of keeping their own HR department.
The first thing to consider before starting an HR consulting business is to ask yourself whether you feel comfortable in the profession or not. One must have good interpersonal communication skills to be successful in this profession.
It is really a good business opportunity for one who has experience in this field and has smart ideas to share with the clients and to bring innovative solutions to their issues. Skills and contacts are the key success factors in the human resource consulting business.
As per Payscale, the average HR consultant salary of $67,591. The experienced HR consultants are paid more than $100,000 whereas the starters make around $40,000 in the United States.
HR Consultancy Business Plan Guide for Beginners
Here are the 10 steps to start a profitable HR consulting career:
1. Choose your Niche
HR Consultancy is a big industry with plenty of specialized verticals. You will see a lot many HR generalists offering 360 degree HR services to their customers. Most of them are unable to sustain their business in the long run because they fail to provide quality services.
As a beginner, it is advisable to find one or mostly two areas of specialized services, to begin with. Try to provide the best possible services to your customers in those specialized fields. As you create confidence with the client, money starts flowing in, hire professionals, and extend your service range.
2. Create a Business Plan
As with any other business, creating a business plan for your HR consulting business is very important. If you are starting on a shoestring budget, try to make your own business plan. It may take some effort but it will prove to be extremely helpful in running your business venture successfully in the near future.
3. Name your HR Consulting Business
You must be careful when you choose the name of your HR consulting business. The name should not be too much close-ended as it can be difficult to relate the name of your organization when you decide to extend more services into the business. Another issue, you must consider before finalizing is the availability of a related domain name. Check our complete guide on how to name a business.
4. Choose a Business Structure
Selecting the right business structure is extremely important. Every country and state offers varied options. For example, if you are from the United States, you can go for a sole proprietorship or as an LLC if you starting as a beginner. Starting as an LLC has got certain advantages but it will cost you a little more.
5. Make Business Legally Compliant
Check with the local authority about the licenses and permit requirements. Every state and county has different regulations. After you get the necessary licenses, apply for a business bank account.
6. Fix your Rate & Terms
You can fix your rates for a one-time specialized service on a specific solution or on a contract basis. Initially, getting a client is normally a tough ask. At an initial phase, it is better to price not too high as you are not tested yet. You have always the scope of increasing your rate at an appropriate time.
7. Equip your Workplace
The workplace plays a critical role in any consulting business. You need to have a private chamber where clients are comfortable enough to share their issues. Also ensure, you have a sufficient reception area for clients to relax if they need to wait before meeting you. If you are starting from home, no need for a reception area but your workplace should be clean and comfortable to talk to.
8. Join Professional Associations
Companies prefer consultants who are recommended by the people around them. Professional organizations like the local chamber of commerce, Human resource-related associations provide you a platform for excellent networking. Being a member of these types of organizations will not only give you the platform for networking but also will help you with the latest trends in the human resource industry.
9. Be Patient
Any consulting business takes time to grow. It takes time to build goodwill and trust among clients. Never try to build an HR consulting business in a hurry. Listen to your customers and address their issues as dedicated as possible and prove you are trustworthy. Once you successfully prove you are competent and can be trusted, customers will flow automatically.
10. Promote your Business
Networking is the key to be successful in the HR consulting business. Make a list of potential customers. Talk to them in person or send them emails listing down the services you are providing to clients. Creating a website for sure will enhance the credibility of potential customers.