The independent HR community has seen steady growth in recent years, with conservative pre-pandemic figures reporting that there are now 50,000 practicing independents in the UK. This number is steadily rising due to the fall-out from Covid-19, and we are seeing an increasing number of professionals venturing out on their own due to redundancies and restructuring. Making the jump is a big step for many.

As an HR professional, going it alone and starting your own consultancy will undoubtedly be one of the hardest things you will have to do in your career. In this advisory piece, we will talk about some of the key things that can go wrong when starting an HR consultancy and offer some helpful tips on how to avoid them so that you can start as you mean to go on and succeed in your new venture.

1. Not making a business plan

Let’s start from the top: the key to starting up is putting together a business plan. Only then can you know what you stand for, what your ethos is, what types of clients you want to work with and perhaps most importantly, where you want to take the business in the longer term. In this plan it’s important to consider those strategic decisions, but also some more tactical points too, such as the structure of your practice and how you set it up, how you are governing yourself and how you are handling data and information. If you’re not sure on this, it’s important to seek advice.

2. Don’t be everything to everyone

You’re not going to carve out your name or reputation by being everything to everyone. When doing your business plan, think about what makes you different. The clearer you are in your own mind on this, the more likely you are to find that dream client and build a more stable brand long term.

3. Don’t make it all about you

It’s not you, it’s them. No seriously. When you meet a new prospect, it is tempting to create a slide deck and tell them all about you can do for them. This is a big mistake. Make sure you listen more than you speak and instead focus in on what the customer requires. Then build out your proposition accordingly based on what they want.

4. Mishandling requests for proposals (RFP)

Avoid having a template RFP that you just pull out as soon as the phone rings. A common mistake is trying to fit the client’s needs into your existing services template, rather than the other way around. By all means have a template you work from as a starting point, but make sure you really tailor this to the individual client, clearly articulating how you propose to respond to their needs.

5. Don’t use jargon

Avoid confusing clients by using HR jargon, this doesn’t make you look like you know your stuff. Instead, it confuses and will likely put people off. Where possible speak in plain English unless you are dealing directly with HR professionals. Make things simple for your client and show your deep expertise from the offset, rather than trying to baffle them with industry terms.

6. Not being flexible

A one size fits all approach isn’t going to appeal to clients. One of the benefits of working with an external HR consultant is flexibility and innovation, rather than simply offering the same to every client. Make sure you capitalise on this flexibility and raise your profile around this as a key USP accordingly.

7. Not doing your due diligence

It’s great when you are asked to pitch for business, but take care to ensure you know as much as possible about the potential client before you jump on board. Ideally you would also perform a full HR audit so you can shine a light on every area of their business before you quote. Be very clear about your scope of services and understand what you are agreeing to do.

8. A confused pricing strategy

The biggest decision you will make is whether to charge by the hour, as this could immediately limit your capacity unless you take on associates or staff. Also take time to consider what you are worth. If you charge a higher rate, clients will expect more of you. Can you deliver this? Make sure you create a pricing strategy that you can commit to and deliver on longer term. If in doubt, speak to other industry professionals or seek advice.

9. Not building up your brand

Most HR consultants love working with clients but feel uncomfortable about selling or marketing what they do. Marketing is often a new area for HR professionals, and it’s seen as the great unknown. Be clear what you are selling and what you stand for. Know when to seek the advice of a professional, such as a PR consultant or marketer. Remember that you are great at what you do and bringing someone on board (or outsourcing to a freelancer) will ensure you can continue to do your job whilst they can do what they’re good at – getting your name out there.

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10. Not showing passion

Remember to work on your business as well as in it. Loving your clients, anticipating their needs, and solving problems they don’t know they have (and doing this with energy and drive) is all part of running a successful business. Your love for what you do will be contagious, so make sure it shines through.  

It’s important to remember that businesses fail for many reasons, but the more you know, the less likely this is to happen to you. Good luck in your journey.

Interested in this topic? Read How to turn a career crisis into the best thing that’s ever happened to you.