Consultants are business-to-business contractors who provide outside advice to individuals and organizations lacking the necessary expertise themselves. To start your own consulting business in Ontario, you will need to follow many of the same steps as any entrepreneur in the province. The caliber of services offered by consultants and the bidding process to secure jobs, however, means that consultants have additional considerations when starting their own businesses.
Research your business ideas and your market. If you have a colleague who has already set up a consulting business, ask for her advice.
Determine the appropriate ownership model for your consulting business. Incorporation has some tax advantages and will protect your personal assets if the business fails or you are named in a lawsuit, but it adds complexity to business operations and requires the immediate involvement of a lawyer and accountant. A sole proprietorship model means the business is owned and operated by one person—you. This is the fastest and easiest way to set up your new business. A limited liability company combines the advantages of the above.
Decide whether you will operate your business under a name other than your own. Choose a business name carefully. Ensure that it is professional and appropriate to your particular sector. If you plan to incorporate, the name you choose will need to be approved by the government so avoid anything misleading or confusing. Consider the marketing potential of names you like, including the availability of a domain name for a website. Have a short-list of names available in case one or more of the names is already in use when you go to register your business.
Write a solid business plan that describes the services you offer, the market, your competition, day-to-day business operations, a marketing plan and financial forecasts. Know your business plan intimately, as it will help guide your decision making and help you find investors.
Register your business in Ontario. This is a required step if you will be operating the business under a name other than your own first and last name. For example, you don't need to register your business if your name is John Smith and your company operates under the name John Smith. Add "Consulting" to John Smith, however, and you will need to register your business. Registration involves conducting a name search, filling out a form and paying a fee. It can be done quickly and easily online on the Service Ontario website (see Resources).
Apply to the Canada Revenue Agency for a federal Business Number. This is necessary if you are incorporating your business, will have employees or will make more than $30,000 annually in profit.
Become familiar with the regulations and legislation that apply to your area of expertise. Stay up-to-date with amendments. The Canada Business Ontario website offers a Business Regulations Info-Guide (see Resources).
Find outside financing, if necessary. You can approach friends and family members, financial institutions, private investors, venture capitalists and apply for government grants.
Enlist outside expertise, including a lawyer, accountant, banker and insurance agent/broker. These professionals will help you with operational considerations such as incorporation, financing, taxes and liability.
Join a professional association. This may be trade- or sector-based, or you may choose to join the Association of Independent Consultants or the Association of International Consultants. The networking, advice and collegial environment of a professional association can help you grow your business and stay connected to your peers.
Set your fees. Proper pricing of services will help you attract and retain business. Consider your overhead costs, the rarity of the services you offer and what the market is currently paying for similar services. You may choose to discount your rates initially to reflect your recent arrival in the market. Do your research before you quote on your first job.
Roll out the marketing component of your business plan. Consider developing a website, printing business cards and other promotional strategies.
Bid on contracts and respond to requests for proposals (RFPs) from the private and public sector. To learn about government contracts that you can bid on, use electronic tendering services. The Ontario government uses MERX while the federal government uses MERX and Business Access Canada. Other important places where government requests for proposals are posted are www.marcan.net and www.bidscanada.com. The federal Office of Small and Medium Enterprises can be a helpful resource to consultants interested in learning more about consulting for government.