Can startup consulting be a profitable business?

July 23rd, 2015

Assume I'm a certified digital marketeer who's had a couple of startups and is fluent in the relevant models and how to apply them. Somewhere down the line I aim to start consulting, I'm torn between:

1) Normal digital marketing consulting services for all sorts of businesses

2) Consulting services directly targeted for startups and helping them grow

Peter Kemball Member Issuers Committee at Equity Crowdfunding Alliance of Canada (ECFA)

July 23rd, 2015

Philippe,

Unless the start-ups you target have cash, current income for your efforts is not to be expected making you an investor. The odds of startup success are so low, that even where you able to make good judgment calls you would have to make 20 such investments and have at least 2 of them pay off at ten times your for cash hourly rate to breakeven and wait between a half decade to a decade to actually have cash.

Hope this helps you think it through

Stephen Levin Data Analytics Lead at Sestra

July 23rd, 2015

Startups are obviously fun to work with, but overwhelmingly they're a lot tighter about money. It's hard to get them to pay the rates that you can get a BigCo to pay, but you can certainly make money anyway.

Lorraine Wheeler President at Redstoke, LLC

July 23rd, 2015

It somewhat depends on how you define startups. Early stage startups without funding typically will not pay consultants. VC backed consultants will often (not always) use consultants that are recommended by the VC. So, if you have close relationships with VC firms, then option 2 could be viable. Startups that have product and revenue might be open to consultants that would help them grow if you present a compelling case, but they may not pay the same rates that a large company would. Good luck!

Mouhamad Médoune Boye

July 23rd, 2015

Hi ! The question worth to be asked... Consulting is always a good idea (when there is demand of course). Many Startups are looking for good advices and tips in such domains like growth and digital marketing. I am consulting in Digital Marketing and i can tell you that the demand is great among Startups here in Africa... 2015-07-23 18:50 GMT+00:00 Philippe Lobo Küng < reply+dsc+3509@founderdating.com>:

Dr. Gomes President and Founder at Gomes and Company

September 3rd, 2015

I have an active start up practice and have been very successful at it. My approach and compensation practice are more creative and flexible than most consultants in the field. I have worked on 20 startups including launching four successful startups myself. I especially like early stage startups. They are the most fun and provide the most reward for unique strategy development and hands on implementation.

Every start up needs, a financial plan, business plan, product development strategy, fund raising and pitch development, market research, sales plan, business structure approach, board development and executive recruitment plan. I usually start by offering to do selected pieces of any of the above items. I get paid well enough for that work. The last two start up consulting clients liked my work so well that they made an offer for me to join the executive team. One was a manufacturing start up that offered me the position of Chief Operations Officer on a three year contract. Another was a hi-tech company that hired me as the COO for a one year period. A third one offered me the position of CEO on a three year contract. All of these positions I accepted. When you count the management offers as part of my start up revenue, the total compensation was quite lucrative.

Devon Campbell Founder at Radworks, Startup Mad Science, developer at GRIDSMART

September 20th, 2017

It's just a matter of aggressively filtering your prospects. Anyone can start a startup… even people who don't have the money to pay your consulting fees. You want to make sure you're not spending your valuable time on those who can't.

Matt Kuppers CEO of Startup Manufactory

June 7th, 2019

Perhaps only focussing on marketing may be a tad too niche. We have been providing consulting to startups through Startup Manufactory since 2013 and it has proven to be profitable. It also depends on the size of the ecosystem you're operating in, of course.

Richard Bethea Clarity through Strategies & Analytics

June 14th, 2019

Hi Philippe,

When I started my consulting business back in 2012, I tried to work with startups for the first few years. I met many good people, and they all badly needed and appreciated my help. But ultimately I had to stop working with startups because they simply have no money to pay for outside help. It's sad because the need is great. Now, there are ways to do this if you get creative and also have a diversified portfolio. But it will slow your growth rate, and limit your income some. If you're interested in some lessons learned and advice, let's talk further.

Chris Gorges Managing Director, Infinia Group // Founder, Biddlist

July 23rd, 2015

@Lorraine nailed it. My firm works with startups / growth-phase companies, but due to their tighter budgets, we have to get creative around compensation structure (equity, options, referral structures, etc.) -- which obviously is part of the fun / potential upside of working with startups.

Heidi Fortes Growth Hacker, Sales Expert, Communication Maven, Culture Architect

July 23rd, 2015

If you're willing to stick it out for the long term and understand that the relationship may take some time to pay off then yes. But in my experience with startups, they usually are very tight and can't really put too much money in supplementary growth services like consulting.

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