Starting a consulting business in an unusual market

Takeaway: If there aren't a lot of IT consultants in your region, think about why that is the case before launching a consultancy. Here's advice for a reader living in Malawi about starting such a business.

TechRepublic reader Peter Pejavi sent me the following Ask Chip question:

I am a young man from Africa in a country called Malawi and I am about to start an IT Consultancy business. What are some of the basics you would recommend for me to succeed in this business. After all its a rare business in my country.

Unlike most consulting startups, Peter doesn't have a lot of models in his target market for how to conduct his business successfully. The first question he needs to answer is whether there is sufficient demand for consulting services to support his proposed business. There could be at least two reasons why there aren't a lot of consultants in Malawi: either there is little opportunity for business, or else nobody has seized those opportunities. Most likely, some of both applies. Peter will want to consider what present needs he could meet, as well as how to inspire potential customers to take advantage of services they don't even know they need. That comes down to demonstrating the value of doing things differently, and if possible distilling that down to a clear picture of money made or saved. He wants his customers to say about him, "Peter really gets it. He understands exactly what I need, and he can make it happen."

Once he identifies services that can sell, the next thing to do is to build his business around providing those services. He needs to acquire all skills related to those services, and keep that knowledge current. If he really knows his subject, he'll be able to explain it to potential clients in words that his grandmother would understand. That will make the practical benefits clear to his customers, as well as dispel any suspicion that he's just trying to appear knowledgeable by using big words.

Peter also needs to spend time determining his price. It must be enough so that he can operate profitably, yet not so much that he drives away too much business. Losing a little business over price is a good thing — there will always be cheapskates that he really doesn't want as clients — but the majority of prospects should think his terms are fair. If he can show them that they make or save more than they spend on him, then price shouldn't be an issue.

In covering the costs, Peter needs to remember to account for all of the expenses of running a business, as well as what he intends to draw out for himself. Furthermore, he must remember that a consultant spends a lot of unbillable time managing their business. Not only do you have to do the work for which you're contracted, you have to spend time finding new work, taking care of your books (even if you hire an accountant), and a million other details of running a business.

Finally, Peter needs to develop a marketing strategy. How do you get the word out in Malawi? I don't know much about advertising opportunities over there, but I would bet that one of the best ways would be via the Internet. If Peter can establish a web presence such that googling "IT services Malawi" brings him up on the first page, I'd say he's well on his way to success.

What other advice would you give Peter? Have any of you started a consulting business where no consultant had gone before? What did you learn?

Also read: Devise a business plan before becoming an independent consultant