Question

Topic: Strategy

Starting A Marketing Consulting Firm-have Question

Posted by Anonymous on 6/7/2007 at 1:27 PM ET 125 Points
Hi all

I'm new here and would appreciate your help.

I am on the cusp of starting a marketing/advertising consulting firm with specialties in mortgage lead development for mortgage brokers as well as a reseller of marketing fulfillment (call center resale, web solution resale and direct mail resale) My questions are:

1. I'm financing the effort myself. Do I really need a comprehensive business plan?
2. What fee do I charge for consultative services? Hourly, retainer?
3. Can I market my consulting over the phone and on the internet--I won't have time to go door-to-door
4. Is it legal and ethical to charge front & back fees? i.e. I consult and develop a plan for a firm and charge $125/hr to evaluate their situation and draft a proposal, then, I fulfill their needs with a web solution, call center plan, and direct mail campaign. Can I receive revenue from the web solution, call center and direct mail subcontractors when I commission their services for the plan?
5. In what order do I launch the business? Business plan, budget, registering with the state, forming an LLC, retaining a CPA, etc...
6. Which business start-up resources do you recommend?

Your responses & insights are greatly appreciated

Ned
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RESPONSES

  • Posted on 6/7/2007 at 1:41 PM Member
    Ned,

    I'll try to answer some of your questions. I recently started a business for my husband. The business plan and budgeted cash flow was crucial. Most banks will not speak to you without it. The business incorporation is easy as pie. Hire legal council or use any other service. Consult with a CPA and use a software program to get your books going. Most CPA's can take over your software program books when it's too much for you to handle. Make sure you keep your expenses down as much as possible in the beginning. The key is cashflow.

    My ft gig is in direct marketing in financial services. I'm not sure of the legality, but what most I would want is if you are going to make money on the leads, I would not pay you to consult. Or, I would be comfortable with you consulting and helping me setup and get the program successful. But, I would want you to teach me the keys to success along the way.

    Payment depends on the company and individual's comfort level with your services. The Company will likely negotiate.

    Good Luck!
    Kris
  • Posted by Tracey on 6/7/2007 at 1:53 PM Member
    One of the primary goals of a business plan is to answer your other 5 questions... so I would definitely recommend writing one as your first step. The business plan includes plans for financing your business, marketing it, how to charge fees, etc. There are lots of examples and instructional tools available on the Small Business Administration website.
  • Posted by telemoxie on 6/7/2007 at 2:29 PM Member
    As a free lance telemarketing guy, I would agree with Randall and suggest NOT counting on generating leads for this service by phone. Generally speaking, unique or highly unusual and specific B2B offerings can be effectively introduced by phone, while more "standard" offerings (such as outsourced marketing) are, in my opinion, better sold in person, through personal relationships and networking.
  • Posted by Tracey on 6/7/2007 at 5:16 PM Accepted
    Hi Ned,
    Thanks for the additional info. Here's my opinion. I haven't worked with many marketing consultants before, but I've outsourced a lot of event planning, and this is what I'd expect as a client.

    1- As a client, I would probably prefer to pay per project. Ie, give me a proposal for the whole project and tell me what it will cost. However, it's nice to have all the options.
    2- I think you should include a line item for the vendor price in your proposal. You could either do all the billing yourself (and list, say, a 5-10% markup for doing the billing), or have the vendor bill the client directly. The client should have the option.
    3 & 4- I would not want to work with a consultant who's getting a referral fee from a particular vendor, because I would never trust that he's recommending the right vendor. If it's the case that ALL vendors will give you a referral fee (ie, you have no incentive to choose one over another), you should list that as a line item discount in the proposal. So you charge the client whatever fee you want, but include the vendor referral fee as a discount back to the client. That way, you're being totally honest, the client feels like they're getting something back from you, and you still have the freedom to charge whatever you want.
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