How to Start a Consulting Business as a Side Hustle

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Businessman Consulting While Employed

Consulting as a side hustle while employed by another company is an excellent way to earn extra income, increase your skills, and prepare to become an independent consultant. Some employees consult on the side in preparation for going independent. Other employees consult as a side hustle to earn extra income and advance their skills and network.

Click to download the Consulting as a Side Hustle Checklist.

This blog and the related Information links at the end will give you a head start on consulting as a side hustle for either reason.

Consulting is a great low-risk, high-reward career if you decide to go independent. If you stay an employee and consult, you earn extra income, broaden your career skills, and strengthen your professional network. But whichever way you go, you need to plan and prepare.

In all cases, whether you are consulting on the side or quitting to become an independent consultant, check your employment contract and state laws to insure you do not violate non-compete and trade secrets laws. Only a few states such as California, North Dakota, Oklahoma, and the District of Columbia fully recognize that non-compete laws take away your human rights to work at your best livelihood.

Quitting Your Employer to Consult without Preparing

While it is tempting sometimes to quit an inept employer and jump into full-time consulting, taking an unprepared jump significantly increases your risks. Consulting is a low-risk, high-reward career, but it works best to plan and prepare.

There is only one advantage to quitting your employer and jumping to full-time consulting without preparing that I can think of,

  • You are forced to focus and commit immediately.

Preparing for Layoffs

If you are concerned your employer may be laying off employees, you must prepare. Preparing for layoffs can reduce stress and significantly increase your long-term income. To learn more about preparing for layoffs download this extensive checklist to Prepare for Layoffs.

Download the Preparing for Layoffs Checklist.

The disadvantages to quitting without preparing or consulting on the side are,

  • You need at least 3 to 6 months' savings to cover your basic salary. Some consultants who have prepared well have doubled their income within three months. If you are starting to consult without preparation, courses, or coaching it can take up to two years to equal your previous income.
  • You need to pay for health insurance. The USA consistently ranks at the bottom of industrialized countries for its healthcare system. If you are in the USA, immediately check your COBRA (carry-over) health insurance status with the HR department and state employment. All states require businesses with more than 20 employees to give COBRA, but it also depends upon your employer’s type of business.
  • If you can’t get consulting clients immediately, you may be forced into hourly freelance work. This will delay moving into consulting and will muddy your professional brand.
  • Referrals during startup usually dry up within the first year. Most consultants fall into a Feast-or-Famine cycle without a marketing, promotion, and sales system.
  • Once you are trapped in the Feast-or-Famine cycle, finding the time and coaching to build the strategies, tactics, systems, and tools you need to build a highly successful consulting business is difficult.

Consulting as a Side Hustle

You can do consulting on the side while staying employed if your employer approves or you are consulting in an area without conflict. This also gives you time to prepare your business foundation to go independent.

Consulting as a side hustle has the benefits of,

  • Finding out whether you like consulting.
  • Validating the demand for your niche and consulting services.
  • Earning extra income.
  • Building business and marketing systems before you start consulting full-time.
  • Building your professional image.
  • Expanding your professional network.

The downsides of consulting on the side while employed are,

  • It may violate your employer’s HR policies. You could be fired or branded as disloyal and unethical if you are caught consulting without your employer’s agreement.
  • It can mean a lot of extra hours. That can be a stress for you and your family.

Consulting on the Side Checklist

This checklist will help you prepare for consulting as a side hustle, whether you are doing a side hustle while employed or preparing to be an independent consultant.

Click to download the Consulting as a Side Hustle Checklist.

Preparing for consulting while employed significantly decreases the time it takes to build your consulting business if you plan on eventually consulting full-time. You can do all of the following while remaining employed. Most of these items will increase your value to your current employer. Depending upon your employment agreement and state laws, doing a consulting side hustle without approval might be illegal.

  • Identify the strategies, tactics, systems, and tools you will need in the startup phase of consulting. Download the Consulting Startup Checklist and USE IT.
  • Build your professional network.
  • Join local industry associations.
  • Volunteer for association boards and get known.
  • Attend association meetings and listen for niches that need help solving problems.
  • Identify and validate your niche and services. One way to do this is by interviewing ideal clients or proposing topics for speeches and articles with trade associations. 
  • Create and validate your ideal client profile.
  • Continually build authority and credibility by speaking at association meetings, writing blogs and trade articles, and giving webinars.
  • Build your mailing list.
  • Register your business entity with local and state governments. In some types of consulting, you may need a legal entity, LLC or LLP, and business insurance to protect your liability.
  • Open a business checking account to keep all business transactions separate from personal, even if you remain employed.
  • Prepare checking, accounting, and taxes separate from your personal finances.
  • Get testimonials for your work from your colleagues, partners, and clients.
  • Get certifications and credentials to increase your authority and capabilities. Many college and university courses now have free courses through MOOCs. Certification and college credit require an additional fee. Courses in the MOOCs are from many major universities such as Massachusetts Institute of Technology, Harvard University, and the University of California, Berkeley.
  • Accelerate your startup speed by joining the Consulting Mastery program or mini-courses and getting step-by-step instructions and coaching on consulting strategies, tactics, systems, and tools. Members have said it saved them 5 to 10 years of work.
  • Have a family discussion and agree on work/life priorities. Reduce family stress by reaching a consensus about your hours and what days and times are reserved for family time.
  • Check for consulting sub-groups in your national industry associations. The Institute of Management Consultants has chapters internationally. In the United States, check with the Institute of Management Consultants for regional groups. 
  • Never use your employer’s time or equipment for your client's work. Not only is it unethical, but you could also be fired.

Preparing to Consult While Employed and Planning to Quit Checklist

You can ethically and legally do a lot of preparation for going independent before quitting your employer. By preparing and consulting on the side before quitting, you can leave your employer and immediately start your own robust independent consulting business.

  • Prepare as much as ethically and legally possible while employed. Use the Consulting as a Side Hustle checklist.
  • When you quit your former employer, get a copy of your employment agreement from Human Resources. Check for a non-compete clause for your industry or skills. Also, check if you can be held liable for violating trade secrets or intellectual property laws, for example, processes or inventions you create on your own time. 
  • In some states and for many employers contacting the prior employer's clients or customers is a violation of trade secrets. Before contacting a former employer's clients or customers, get their approval.
  • Keep a list of all contacts and networking connections. Have a contact and referral rejuvenation plan ready for action when you leave. Use scripts from our Consulting Mastery™ program and courses to reach out and reconnect.
  • Draft a new LinkedIn profile, but don’t post it until you quit.
  • Create an Ideal Client Profile to find prospects in LinkedIn Navigator quickly. The Consulting Masterytm programs and mini-courses use LinkedIn Navigator extensively.
  • Build a list of highly-qualified leads using LinkedIn Navigator and Google. These list-building techniques and sales conversion systems are taught in the Consulting Mastery programs.
  • Do not present yourself as a consultant to prospects until you are ready to launch.
  • Draft statements of your consulting services and write short descriptions of the value you provide for each service.
  • Use the Critical to Success Cornerstone to Capstonetm structure for your writing, but don’t publish until you quit.
  • Write high-value blogs on your niche topics, but don’t publish on your site until you quit. Use Pareto’s 80/20 Rule to write the 20% of blogs that have 80% impact on readership and Google ranking. The Consulting Mastery™ shows you how to find the best keywords and topics.
  • Write case studies of past work, employed or independent. Many case studies are written without the client's name. If you cannot use a client's name, use a descriptive anonymous phrase, such as, "A regional light manufacturing company with 600 employees had the problem of...". Don’t publish until you quit.
  • Once you leave your employer, publish professional content weekly rather than all at once. This makes you more memorable and gives you a time buffer. Use a content leverage system as taught in Consulting Mastery so that one piece of content can be used in multiple media.
  • When you quit your employer and have a good relationship, let them know you are consulting and ask if you can contact prior clients, partners, or suppliers. Sometimes, you can build an excellent relationship with your former employer’s sales and support team to benefit you and your former employer.

The courses, coaching, and mentoring within Critical to Success will guide you with the strategies, tactics, systems, and skills to create a highly successful independent consulting business.

Click to download the Consulting as a Side Hustle Checklist.


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