Funding from VCs is hard to come by, and therefore most have had to count on personal savings. Then comes business development - moving around with the right crowd and branding yourself. It’s a bit dicey: consultants tell people how to run their business optimally; but who do they turn to when they need advice? It turns out that when it comes to setting up shop, they need to be as dedicated and business-savvy as any other entrepreneur.

Getting noticed

Amol Naresh, an IIT graduate, decided he wanted to get into recruitment consulting in 2003. Without the benefit of prior experience on his side, Naresh started ShikshaPlanet, a self-funded consultancy offering the entire gamut of HR services for the IT industry. Naresh says, “The job consulting business was seen as a grade 3 business, because everyone was getting into it. We sensed an opportunity in 2003 when we saw most of the players backing out and fiddling around with other industries.”

But one of the primary problems that Naresh faced was making ShikshaPlanet different from other consulting firms, “With a staff comprising of people from varied backgrounds, it was really difficult for us to stand out.” Also, Naresh adds, almost anyone these days opens up a consultancy and this makes it tougher to stay afloat. “We noticed that people who used to work as HR staff in various companies would walk away with the database and open up their own small setup,” he says.  

Attracting talent

Attracting quality people is also an important factor that decides how your organisation will grow. Industry insiders say that owing to the preponderance of tier 2 and 3 consulting firms, there is an all-round mitigation of standards. Anita Ramachandran, founder of 11-year old Cerebrus Consulting, speaks about some of the challenges her organisation underwent during its startup stage, “In our business, you can’t make do with just anyone.

And it is harder for a small firm to attract people, since things aren’t all that organised. Some people might leave early when they see this.” Ajay K Menon, CEO of Ambrosia Consultants, a 2000 startup, says, “One way to overcome this problem is putting people having exposure of specific sectors in charge of recruitment of that particular domain. Other than this, consultancies need to have a strong internal recruitment policy coupled with a strong induction mechanism.”

Competition and clients

One of the biggest challenges faced by consultancies everywhere, including startups, is the friction that occasionally happens when dealing with their clients. Admits Chirag Patel, CEO, Agile Software Consultancy, “Some smaller consultants tend to offer bigger things than is possible for them to handle, and end up delivering low quality.” Ramachandran adds, “If you’re a startup, even clients who have known you for some time tend to worry about your capability to deliver when it comes to large projects.”

Consultants also often complain that they are not kept in the loop and that they lose out on our share of credit and revenue. Also, the threat of losing staff to larger consulting firms tends to loom large. “In the recruitment industry, people do think of making the shift to the corporate world. To avoid this, it is necessary to act and position yourself as a corporate,” says Menon.

Minding your own house

During the first few years, the toughest challenge for any consultancy is managing cash flows, since the cash isn’t usually paid up front by clients. But, says Ramachandran, it is also important not to get frustrated if growth is slow initially. Another temptation that you must resist as a consultant is getting into too many diverse areas too quickly. “You have to maintain focus and not do something just because it pays your bills,” she says. Startups also tend to focus around a few key people who often find themselves hard-pressed to devote time to their own staff.

The solution, Patel says, is keeping employee aspirations in tune with financial growth.

As a startup in the consulting arena, you are going to be up against some of the biggest names in the business. But the market is a large, lucrative one and it is up to you to find your place in it. There are plenty of success stories around you, and if you have the right temperament, you too can add your organisation to that list.

Tips to start your own consulting business

1) Choose an area in which you’ve had some experience, or spent some time learning about, and one that you enjoy.

2) Draw up a plan that covers all contingencies, financial and otherwise, such as your office, number of employees, your resources and liabilities.

3 )Be absolutely inflexible when it comes to the quality and speed with which you deliver results to your clients. Settle only for the best.

4) Network, network, and network some more. Join all the associations and attend all the seminars you can find time for.

Note: This article is from Economic Times