May 24, 2022

Starting Your Own Consulting Business? Avoid These 9 Common Consulting Mistakes

The global consulting industry generated one trillion in 2023! But if you’re looking for a slice of that pie, these common consulting mistakes could take that right off the table.

While the pandemic hit many businesses hard, the transition that followed has actually favored many types of consulting services. That, in turn, has translated into more growth in this industry and more consultants vying for clients' attention.

In a study in 2020, 42 percent of consultancies said their main challenge was increased competition from new firms. If you’re considering starting your own consulting business, how do you plan to stand out?

9 Common Mistakes When Starting a Consulting Business (According to the Experts)

We talked with top sales consultants to get their viewpoints on the most common consulting mistakes a new consultant can make. Here are their thoughts and tips.

1. Trying to Be Good at Everything

“As a revenue consulting firm,” says Jake Dunlap of Skaled, “it’s easy to say, if it’s related to revenue, we can do it. But we’ve gotten a lot better over the years in saying that there are a million things we could do. But what are the things we want to be world-class at?”

“My advice is to stay focused. It doesn’t have to be a small niche, but it can start that way. This helps the business, message, and people focus so they know what they’re supposed to be doing.”

Key Takeaway: Don’t try to be a jack-of-all-trades consultant. Pick something you excel at and focus on that niche.

2. Not Getting Buy-In from the Executive Team

Mark Colgan of Yellow O talks about his experience: “A common consulting mistake is not having buy-in from the founder or the executive team.”

“You could do all the best work in the world,” he says. “However, if that gets vetoed by the founder, then the work was a waste because it’s not going to be implemented, not even tried or experimented.”

Key Takeaway: Don’t let your work go to waste. Sell to the executive team as well as your original POC, and you’ll ensure your work is valued and used by the company as a whole.

3. Taking on Clients Simply Because You Need the Money

“You need to figure out and know your ICP,” says Scott Leese. “If you’re a consultant and you take on a bad-fit client because you need the money or you get greedy, that’s going to be a bad experience for both you and your client.”

“Maybe it’s too soon, or they’re too big, or they just want you to do everything for them, and you’re overpromising what you can deliver. I messed up a couple of times in thinking I could do the work, I took people on too soon, and I paid the price.”

“I can’t stress this enough: know the work and the value you provide, know who the right target client is, and stick right there. Deviate from that with extreme caution.”

Key Takeaway: While money can be tempting, especially when starting your own consulting business, this common mistake spells trouble for you and your clients. Building an ideal customer profile is the first step to making sure you only work with clients who can see real benefits from your work.

4. Being Afraid to Say No

“For new consultants,” says Mor Assouline of Scalocity, “Knowing when to say ‘no’ without the fear of losing business is a challenge.”

“Sometimes you’ll work with a client that is asking for more than what you do, and you find yourself in the trenches. You’re thinking, this isn’t my business model. But then, if you backpedal, that could leave a bad taste in the prospect’s mouth. So, it’s knowing when to say ‘no’.”

Mark Colgan adds: “I made the mistake of not saying ‘no’ to the wrong opportunities and just saying yes to those that were in front of me. It can be difficult, especially if you’re just getting started. It’s a bit of a roller coaster. But it’s not worth the pain and suffering for bringing on a bad client when you knew it wasn’t a good fit.”

Key Takeaway: Stick to what you know you can offer.

5. Not Setting up a Legal Agreement When Starting Your Own Consulting Business

Contracts and paperwork aren’t exactly a "sexy" part of consulting. But setting up these legal agreements can be a lifesaver for your consultancy.

According to Brenda Della Casa, many consultants fear asking for a formal agreement will cost them the gig.

Here’s her advice to overcome this fear: “Understand that quality contracts are put in place to protect both parties, not for one to strong-arm the other.”

She says, "Anyone who is unwilling to put his signature where his mouth isn’t someone you want to be in business with.”

Key Takeaway: Set up a contract with all the legal formalities in place (and make sure an expert either helps you or looks it over after). This will protect your consultancy, set clear expectations for both parties, and ultimately make sure you get paid for your work.

Additionally, if you're considering establishing an LLC, you must start researching the best LLC formation services in your state. These services will save you a lot of time by handling legal formalities from your clients and state government authorities.

6. Losing a Client Relationship When Your POC Leaves

“A lot of the challenges we’ve had,” says Josh O’Brien of RevShoppe, “are around relationship management, especially with people coming and going from organizations.”

“How do we demonstrate value when the person who signed your $500,000 check leaves the company without telling you? What do you do when someone asks, " why are we paying you this much money?”

“We’ve grown up as a company and developed a continuity around our messaging. So, what does RevShoppe do? What are we doing for the client? How do we convey that easily, so it doesn’t matter who’s coming in and out of the organization? That was a huge challenge for the first couple of years.”

Key Takeaway: Create a clear, consistent message when starting your own consulting business, and succinctly explain your value to the company. Always proactively work on keeping lines of communication with clients open, not just with your main POC but also with other stakeholders within the organization.

The selling doesn't stop after a client signs the contract. And you don't just sell to one person—you sell to all the main stakeholders involved in the decision. This way, you’ll overcome the common consulting mistake of losing a job just because your point of contact leaves.

7. Holding Back Important Information

“I’ve had health challenges for 21 years now,” says Scott Leese. “When I first got started in consulting, I picked up a client and didn’t disclose my health challenges. Sometimes those health challenges knock me on my ass, and I need to move a little slower. This client wasn’t too happy about the delay, and that experience didn’t end well.”

“That was a big lesson for me: don’t hide this stuff. Talk about it and own it. Now I let people know that I could get knocked back for a week every now and then.”

Key Takeaway: Transparency will only help your business. Whether it’s about your health, your family responsibilities, or your current workload, don’t hide information that could affect your clients later on. Let them know what to expect from you, and they’ll respect any adjustments you need to make.

8. Partnering with the Wrong People

“Today, my business has no partners or co-founders,” says Michael Halper of SalesScripter. “I’ve partnered on quite a few startups in the past with other people, and the ones that didn’t go well were for different reasons: maybe you have different ideas, or people lose steam.”

“With SalesScripter, I’ve tried to build this on my own, and that’s been great for me. I feel lucky that I could build this practice and be independent, not relying on someone else’s changes in mood.”

Key Takeaway: While having a partner or co-founder in your consulting business can be a huge benefit, it can also be a terrible challenge if you partner with the wrong person. So, be cautious—and if you do chose to partner up with someone, make sure to build and nurture a healthy co-founder relationship.

9. Forgetting to Ask for Referrals

It can be intimidating to ask for referrals from new clients early in your journey as a consultant. You might worry about losing the deal or turning a great conversation into an awkward one.

But, as Close CEO Steli Efti says: “No outbound lead you could ever generate in any other form will ever have the same quality as referral leads.”

As he says, the best time to ask for a referral is right after someone purchases. They’re happy with you and convinced they’ve made the right decision. Of course, you can always wait—but really, it’s just a waste of time.

Put These Common Consulting Mistakes in Their Place

Starting a consulting company isn’t easy—and you can make plenty of mistakes along the way.

While we’ve listed some of these common consulting mistakes, remember that you’ll most likely add your own.

Mistakes are not the end of your business; they’re learning experiences you can grow from. View them like this, and each new mistake will be an opportunity to improve your business.

Table of Contents

Share this article

Copy link

Article written by

Amy Copadis

Amy is a Content Marketer at Close, researching and writing helpful content for sales teams and startups. When she's not working, you can probably find this Boston native running or reading.