How To Create A Consulting Business Plan (Incl. Free Template)

Dec 22, 2022
The independent consultant's business plan triangle.

Table of contents

Introduction

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 your consulting business 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:

  • I wasn’t seeking a bank loan.
  • I had no idea how to write a business plan. The last time I saw someone write a formal business plan was when my college roommate wrote a business plan for one of her senior projects. She spent months on that plan, got an A on it, and never pulled it out of her files again.
  • Underneath it all, even though I thought writing a business plan was a waste of time, the reality was that I didn't want to do it wrong and feel foolish (even if I was the only one reading it).

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:

  • Set a vision I would never have realized was possible.
  • Achieve that vision in less time with less re-work along the way.

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:

  • Grow sustainably.
  • Increase your revenue without working more hours.
  • Grow profitably.
  • Make more impact and,
  • Feel confident and in control as a business owner.

What is a consulting business plan?

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.

What should you include in a consulting business plan?

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:

  1. 3-Year Business Goals.
  2. Sought-After Service Offerings.
  3. Pricing.
  4. Ideal Clients.
  5. Marketing That Makes You Sought After.
  6. Your Effective Sales Engine.
  7. Sustainable Utilization.
  8. Fueling Your Business Plan.
  9. Quarterly Focus Projects.
  10. Rolling 12-Month Plan.

The consulting business plan template

Let’s dive into each of these sections so you know exactly what to put into each section of your consulting business plan.

3-year business goals

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.

  • How much revenue are you generating?
  • How much income are you taking home from your business?
  • What consulting services are you offering?
  • Are you working with anyone else when you sell your services (e.g. referral partners)?
  • Are you working with anyone else when you deliver your services (e.g. subcontractors)?
  • What’s your work schedule?
  • What time off are you taking?

Setting your 3-year business goals is important because you want to know exactly where you want your business to grow into 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:

  • Year 1
  • Year 2
  • Year 3

Ideal clients

Next, describe the types of clients you want to work with. This is:

  • A list of attributes, behaviors, characteristics, and other identifiers that signify your best, most ideal clients.
  • Don’t worry about being too limited here. You want to build your plan around the best clients, and not craft a plan around the mediocre or non-ideal clients.
  • Document any changes you plan to make to who your ideal clients are in order to grow into your 3-year vision.

Sought-after service offerings

Then, write out all your independent consulting service offerings. Then, for each current and planned consulting service offering, you’ll describe:

  • What client problems the consulting offer solves.
  • Why do your ideal clients care about solving these problems.
  • The results your consulting offers deliver.
  • The value, quantitative and qualitative, that your consulting offer generates.
  • Why you’re sought after for what you do.
  • Changes you plan to make to your consulting offers to grow into your 3-year vision.

Pricing

Then, detail your pricing for each of your consulting offers, including:

  • The pricing.
  • Variables that influence the pricing.
  • What questions do you need to be answered in order to determine the pricing?
  • Why the pricing is a no-brainer for your ideal clients.
  • Changes you plan to make to your pricing to grow into your 3-year vision.

Marketing that makes you sought after

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:

1. Marketing strategy for your independent consulting business

The marketing strategies will resonate with your potential clients:

  • Who are the decision makers for your type of services?
  • Who are the influencers of those decision-makers?
  • Who knows those decision makers and can connect you?
  • Who provides related services to the same client base that you do?
  • Where do these people (decision makers, influencers, collaborators, and other service providers) congregate (virtually and/or in person)?
  • What types of resources do the people you’ve identified leverage?

The type of marketing you want to implement in your business:

  • What types of marketing do you think will be most effective for your business?
  • What types of marketing do you enjoy most (e.g. speaking, writing articles, talking with people one-on-one, etc)?

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.

2. Marketing metrics

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.

Your effective sales engine

The next section of your consulting business plan is the “effective sales engine.” In this section, you want to define:

  1. Your step-by-step sales process for each of your service offerings, such as:
    • Convert conversations into opportunities.
    • Gather client requirements.
    • Formulate approach.
    • Validate the value and the results your client expects.
    • Gain client buy-in for your approach.
    • Pricing options.
    • Proposal presentation.
    • Proposal finalization.
    • Contract execution.
  2. Your sales metrics, such as:
    • Number of leads to create an opportunity.
    • Average close rate.
    • Number of clients needed to reach your revenue and profitability goals.

Sustainable utilization

The next section of the consulting business plan is your utilization plan and your company’s business calendar. Get clear on:

  • Your client delivery days and hours.
  • Your business owner days and hours.
  • Your work weeks.
  • Weeks you won’t work.
  • The amount of time that’s been allocated to existing clients.
  • The amount of time that’s available to sell to clients.
  • Any subcontractor time that you want to add to augment your capacity.

Fueling your business plan

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:

  • The way you think about yourself as a business owner.
  • The way you think about the service offerings you offer to your ideal consulting clients.
  • The way you think about your consulting clients.
  • The way you think your ideal consulting clients are thinking about you.

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:

  • Ask and answer: How does the version of you who has brought the 3-year vision to life, and accomplished your goals think about you as a CEO, you as a consultant, your clients, and your service offerings?

Quarterly focus projects

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:

  • Create a pipeline valued at $750k within 3 months, working on it 30 minutes per day on the pipeline.
  • Update your sales process to support value-based pricing, which results in quantified, vetted results in each client proposal.

Learn more about this in Episode 80 of the Grow Your Independent Consulting Business Podcast.

Rolling 12-month plan

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.

How to build a one-page business plan for your consulting business

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.

Benefits of the one-page consulting business plan

The benefits of a one-page consulting business plan are:

  • Easy-to-reference guide for your business goals.
  • Playbook for your marketing and sales engine, so you can create momentum through consistent action against your business development metrics.
  • Clear breakdown of your focus projects so you constrain to those activities that are the highest value for you and your independent consulting business.

Building your one-page consulting business plan step by step

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:

  1. Grab the 3-year consulting business plan you developed using the framework I shared above to use as your reference.
  2. Set your 12-month financial goals and copy them into your one-page consulting business plan.
  3. Select the type of consulting work you’ll offer over the next 12 months in order to hit your 12-month financial goals.
  4. Integrate your ideal schedule into the one-page consulting business plan.
  5. Get clear on who you need to become to achieve your 12-month one-page consulting business plan.

Step 1: Finalize your 3-year consulting business plan using the format I shared in this article

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.

Step 2: Set your 12-month financial goals and copy them into your one-page consulting business 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.

Step 3: Select the type of consulting work you’ll offer over the next 12 months in order to hit your 12-month financial goals

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:

  • Long-term, multi-quarter, or multi-year consulting engagements.
  • Ongoing, retainer-based advisory work.
  • Strategy work that you hand off for someone else to execute.
  • A mix of strategy and execution.

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.

Step 4: Integrate your ideal schedule into the one-page consulting business plan

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:

  • Do you take time off your business in December?
  • Do you take holidays in both July and December?
  • Do you take off the last week of the month?
  • Do you take off every Friday?
  • Do you work 6-hour days?

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?

Step 5: Get clear on who you need to become to achieve your 12-month one-page consulting business plan

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:

  • What do you think is possible for you and your business?
  • What do you think you’re capable of (and not capable of)?
  • What do you think your clients value (and don’t)?
  • What do you think your clients think of you?
  • What do you think about the value/impact of your offer?

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:

  • How are you thinking?
  • What have you stopped thinking?
  • How are you feeling?
  • What are you doing?
  • What aren’t you doing?

Common mistakes independent consultants make with their consulting business plan

There are several common mistakes that independent consultants make with their consulting business plans.

Mistake #1: Not creating a consulting business plan

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:

  • You’re not sure how to create a business plan. It feels daunting and so you end up skipping it. This blog article removes that excuse. You have everything you need summarized right here for you in one place.
  • You don’t need funding and so you don’t see the value in a consulting business plan. From this blog article, I hope you can see the importance of having a consulting business plan as a roadmap for your business. When you lay out your 3-year goals and what direction you want to take your business in, you’ll be able to proactively steer your business in that direction instead of letting your business cobble itself together through a series of reactionary decisions.
  • You think you’re too far along in your business to need a consulting business plan. Consulting business plans aren’t just for new independent consultants. Creating and maintaining a well-thought-out consulting business plan as a matter of practice, at least once a year, will ensure you make decisions that are aligned with the bigger picture and also help you make more money in a fulfilling and sustainable way.

Mistake #2: Not using a consulting business plan to guide 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.

Mistake #3: Not maintaining the consulting business plan as a living document, one that is meant to be assessed, evaluated, and iterated until you achieve the result you want as an independent consultant

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 consulting business plan 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.

My three tips for writing a great consulting business plan

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.

Tip 1: Think big

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.

Tip 2: Don’t bring the “shoulds” into your consulting business plan

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.

Tip 3: Believe you can have it all (you don’t have to choose between everything you want)

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 consulting business plan 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.

Additional resources

1. Podcast Episode #064: 3 Must-Haves for an Effective Consulting Lead Generation Routine

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.

2. Podcast Episode #049: Consulting Business Guardrails

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.

3. Yearly Business Plan Workbook for Independent Consultants

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.

You made your business plan, now what?

Now that you have the format and step-by-step process to create your consulting business plan, here are your next steps to ensure you make the most of this article.

Here are the specific steps for you to make put this article into action so that you can be in control of the growth and trajectory of your consulting business:

  1. Get into your business owner, CEO mindset.
  2. Build out your 3-year consulting business plan.
  3. Break your plan into a 12-month, one-page business plan.
  4. Incorporate your plan into your quarterly, monthly, weekly, and daily business owner routines
  5. Reach out for expert help in applying this work to you and your business so you can grow your business further and faster with more ease and fulfillment. Click here to apply for your coaching consultation.

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