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How to Expand Your Independent Consulting Business (Guide)

By MBO Partners • August 9, 2022

8 MIN

Many factors can influence your decision to grow your business, including regulatory changes or financial constraints that impact the timing of expansion. And there are many ways to grow: working with others as a team, hiring other consultants or part-time workers, or finding new work for yourself. In our guide, we’ll walk you through the key considerations on how to help you grow your business effectively. Find out how to figure out if it’s the right time to grow your business and what you should keep in mind when crafting a growth strategy.

Consider If It's Time to Grow

Congratulations! You’ve made the leap to independence and survived the inevitable bumps in the road to create a thriving consultancy. You own a solid base of clients along with a pipeline for ongoing work. Now, ask yourself an important question: Is it time to grow?

GATE

In one way or another, the purpose of any business is to grow. However, growth can have many forms. Some examples of growth might include profits, revenue, market share, brand positioning, influence, and geography, just for starters. Whether your goals are modest or more significant, knowing when to grow is an important decision. Your growth plans should not only align with market conditions, but also with your personal goals.

“…the goal of living is to grow.” —E.E. Cummings

Know the environment

Keep up to date on potential news or trends that may impact your business and its growth opportunities. This may include developments in your market and industry vertical along with external factors, such as federal, state, or other regulations that could impact the conditions of your industry. Tax policies and health insurance are examples of two recent issues that solo and micro businesses should have on their legislative watch list.

Also monitor the news (and influencers) in your industry. Schedule a free Google Alert for keywords pertinent to your business and industry. These Google Alerts will deliver to your email inbox immediately, daily, or weekly, depending on your preference

In a KPMG survey, executives and board members identified the top five strategic elements impacted by legislative and regulatory change.

Investment/innovation around new products and services
Adjustments in tax planning or legal entity structures
Search for merger and acquisition opportunities
Invest in emerging markets or new geographies
Improvement in information management and protection

Plan backwards —Timing is everything

It’s crucial to understand where within this market you will find your new business opportunities.

First, understand if the growing need for your business is in certain geographical areas. For example: If you are a construction consultant, and the state of Ohio has begun an initiative to secure funding for a capital city rebuilding and expansion project, it might be best to start engaging that market.

Remember, timing is everything. If you choose to make the expansion move too early, there may not be demand for what you offer. Using our construction example, if it’s August and the proposed budget for this rebuilding and expansion won’t be voted on by their government until next March, it might be best to wait until potential stakeholders begin planning to move forward with the proposed initiative.

On the other hand, if you wait too long, competitors may begin their expansion before you, or you might miss a key deadline to submit a proposal and risk missing out on the market you wished to engage.

“The best-laid plans of mice and men often go awry.”

Despite one’s best intentions or efforts, it is important to remember that not everything will go according to plan. Having a contingency strategy in place is critical. Learn more by reading How to Create a Contingency Plan for Small Business: 4 Steps

Finding New Clients

Find demand, create demand

Find demand. If all signs indicate your market is prime for your business expansion, it is time to determine whether more customers are seeking your services.

For example, think back to “supply and demand.” Are competitors increasing their prices? Have businesses like your client begun engaging in initiatives that require your services?

Create demand. Is your subject matter area a “hot” need? Take a look at the news and then determine if your line of work offers the solution(s) needed to the “problems” reported. Look for early clues and determine where the greatest market need appears to be before beginning your growth investment.

To expand your business, you must create demand. In order to prepare for this growth, we recommend “thinking small.” Learn more by reading: “Think Small: Grow Big: Four Simple Steps to Expanding Your Client Roster.”

For example, if you are a professional driver (taxi, limousine, etc.), and there is a public transportation strike or loss/decrease of service, your business can take advantage by offering your services to those whose commutes and/or transportation needs have been inconvenienced or compromised. By providing a service to a specific population in need, your business can gain recognition (and new clients) from a new target market.

Look at new markets

Opening the door to new markets may include selling your services in a different geographic region. This could mean expanding to other cities, states, or countries.

One way to begin this process is to identify a possible partner consultant in another metropolitan area who can help you sell services to businesses that are similar in profile to those you serve in your geographical area. You might co-bid with a partner or simply leverage them as part of your business development strategy and offer a fee or exchange of services as payment.

As your business may eventually expand its reach, both nationally and globally, virtual collaboration will be critical. Read “Online Collaboration for the Independent Professional” for valuable insights regarding virtual collaboration.

Look for a partner or subcontractor

You can also grow your business by teaming up with one or more independent consultants to extend your market reach. Seek out solo businesses that offer complimentary services. For example, other professionals such as an interior designer, architect, or accountant might partner to offer expanded services to existing clients as well as attract new clients.

This strategy enables you to expand your operations without hiring more staff, while also collaborating on marketing and workflow with other small businesses. You might also choose to align with other businesses to jointly promote services. Then, you can sell someone else’s products and services or create an affiliate program for others to sell your products and services to expand your revenue streams.

Ask Uncle Sam

Winning a federal government contract is a great way to expand your business. According to the Small Business Administration, the federal government awarded an all-time high of $178 billion in contracts to small businesses in 2023. Contact your local SBA or Small Business Development Center to find out what types of government contracting opportunities are available to you.

How to Determine the Cost Of Expansion

Business expansion takes dedication and resources, but it’s important to remember your obligations to your current clients and standard operating procedures.

Will your growth plans affect your existing customers? If so, be sure to keep track of how (costs, availability and response times, etc.). Additionally, your clients should receive notifications if there is any change in service offerings—they may be interested in them! Most importantly, be upfront with your customers about the quality of service you hope to sustain (or adjust, as the case may be). A shift in business direction requires careful planning and execution, especially in terms of preserving your reputation.

Growing your business is exciting, but it’s essential to keep your early and existing clients in mind. If changes to your business structure require rate increases, it’s important to determine how to present these to your long-time clients…or if you should offer any kind of “discount” on the new rates. Composing a “rate card” or services sheet for clients (and potential clients) can be an attractive option.

Pricing Tables	Standard rate
Service	$30/hour
Service 2	$200 per item
Service 3	$400/month

Growing from independence to a thriving small business

Understanding how current and pending regulations impact your business is essential for your growth plan so that you can stay ahead of your competition. In developing your growth strategy, consider the following:

Will my current organizational structure support my plans for growth? Depending on your growth strategy, you may need to examine your current legal structur —and whether forming an LLC or S-Corporation would offer you the best legal and financial protection.

How will I finance my growth? If your strategy requires a significant capital investment, you may need to seek financing. The age of your business, degree of risk, and the state of your industry are all factors that will impact your cost and financing options.

Will expansion require new or additional compliance processes? If your growth plan includes entering new markets or selling a new product or service, you may be subject to industry or location specific regulations. For example, you may be subject to regulations imposed by the FTC.

Choosing the right legal entity, such as LLC to S-Corp, for your independent business is a big decision. Learn more about the choices available, and what may fit best by reading our article, “Business Structures: Choose the Right Legal Entity for Your Independent Business.”

How will my growth plans impact my tax obligations? Tax compliance is one of the key issues facing all independent consultants. It’s essential that you understand not only the financial impact but the reporting requirements and rules governing independent contractors.

WHAT ABOUT YOU?

Take time to assess how growing your business will impact you personally.

Will it require you to work more hours?
Will your family have to make compromises in the short term to support your growth plans?
Is this what you had originally set out to do?

No matter your circumstance, work-life balance is critical to the success of your business and your mental health. For those who have made the decision to go independent, MBO Partners’ in 2024 noted that 87% say they are happier working independently, while 78% say they are healthier as a result.

Most importantly, independents feel great pride in doing what they love. In fact, 70% plan to stay the course as an independent. As for What’s Next? That choice is yours.