How to Start a Consultant Business
From picking a field and registering the business to the proposal a client signs and the first invoice they pay.
This page covers setting up a consulting practice: the field you work in, the business registration, tax IDs and insurance, and how a first engagement turns into a paid invoice. How to bill retainers and hours is covered on the consultant invoicing guide linked below.
On how the work is arranged, the BLS management analysts profile (In the US, last modified August 27, 2026) says "Although some management analysts work for the company that they are analyzing, most work as consultants on a contractual basis." It adds "Typically, an organization that needs the help of a management analyst requests proposals from a number of consultants and consulting companies that specialize in the needed work."
A first consulting invoice with sample figures: a discovery workshop at 1 x $1,500.00 and 6 follow-up advisory hours x $150.00 = $900.00 come to $1,500.00 + $900.00 = $2,400.00 before any tax.
Step-by-step startup guide
Follow these steps to launch your consultant business on solid footing.
- 1
Choose the problems you'll solve
Name the field and the kind of client, such as operations reviews for small manufacturers. That decision shapes your proposals and your fees.
- 2
Check whether your field needs a credential
For management consultants, the BLS management analysts profile (In the US, last modified August 27, 2026) says "Management analysts are not required to get certification, but having a credential may give jobseekers a competitive advantage." Ask your state's licensing board whether your field needs a license or credential.
- 3
Register the business
The SBA's launch guide (In the US, SBA, checked October 31, 2026) says "If you conduct business as yourself using your legal name, you won’t need to register anywhere." It also says "most states require you to register your DBA if you use one." Check your state's rules for the name and structure you choose.
- 4
Get an EIN
The SBA's launch guide (In the US, SBA, checked October 31, 2026) says "Your Employer Identification Number (EIN) is your business’s federal tax ID number." The IRS EIN page (In the US, IRS, last reviewed or updated October 16, 2026) says "You never have to pay a fee for an EIN."
- 5
Write the proposal
Set out the problem, the work, the deliverables, the timeline and the fee, and get the client's sign-off before the work starts.
- 6
Send the first invoice
Bill against the signed proposal: each phase or block of hours as its own line, with a due date.
Tips for starting your consultant business
- Remember your own tax bill. The IRS self-employment tax page (In the US, IRS, last reviewed or updated October 30, 2026) says "The self-employment tax rate is 15.3%."
- Keep a short case note after each engagement, with the client's permission, so you can show results to the next prospect.
- Track hours from day one, even on fixed-fee work, so you can see which engagements pay off.
- Keep each client's proposal, signed scope and invoices together in one folder.
How Billed helps you get started
Features to look at as you set up your business.
Hourly Rate Projects
Billed's features page says: "Manage hourly rate projects and track time for your projects."
Export Timesheets
Billed's features page says: "Create and export your and your team’s timesheets."
Convert An Estimate To Invoice
Billed's features page says: "Convert your estimate to invoice with a single click after getting approval from your client."
Due Dates
Billed's features page says: "Set due dates for payment on your invoices so your clients know when they have to pay you."
Frequently asked questions
More Startup Guides
Invoice Your First Engagement
Create invoices, track payments and keep your clients' details in one place with Billed.
At a glance
| Step | What to check | Source |
|---|---|---|
| Credential | Whether your field asks for one | BLS (In the US, last modified August 27, 2026) |
| Registration | Your own name, a DBA or an entity; see step 3 | SBA (In the US, checked October 31, 2026) |
| Tax ID | An EIN, at no fee | IRS (In the US, last reviewed or updated October 16, 2026) |
| First invoice | Phases or hours from the signed proposal | Consultant invoicing guide |
When this isn't for you
If you're joining a consulting firm as an employee rather than opening your own practice, these start-up steps won't apply to you.