Start a cloud consulting business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your cloud consulting business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a cloud consulting business?
Individual cloud consultants likely won’t need to spend very much on equipment, unless they're planning on running major conversions themselves. They may only need their own computer and Wifi to take care of common problems that arise. The largest costs will likely be advertising and networking to build up a client base.
What are the ongoing expenses for a cloud consulting business?
Ongoing expenses include equipment replacement and maintenance and the cost of advertising. You’ll also need to factor in additional classes you may need to take to keep up on your specialty, as well as commercial insurance in case you make a mistake while on the job.
Who is the target market?
The target market can be any business, though small businesses will likely be your biggest demographic. Most larger businesses will already have a team of consultants to keep up with their troves of data. You may also be able to market your services to individuals. People are increasingly putting sensitive information online and looking for the most effective ways to protect that information from being lost or compromised.
How does a cloud consulting business make money?
Cloud consultants charge for their time and expertise. They may have different packages for their clients, depending on the size of their business and the services they require.
How much can you charge customers?
A cloud consultant makes an average of $80,000 a year, which translates to a consulting fee of $40 – $50 an hour.
How much profit can a cloud consulting business make?
The vast majority of the money you charge will be profit, meaning you can make up to $70,000 a year or more (assuming a full workload).
How can you make your business more profitable?
Cloud consultants can consider branching out into web development, DevOps, or general IT services beyond cloud consulting. This can also be a good start for those looking to get more experience in project management.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Cloud Consulting Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your cloud consulting business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a cloud consulting firm. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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How to promote & market a cloud consulting business
Attend a variety of small business events to network with different owners who may need your services. You can also consider paid advertising on different search engines to direct business your way.
How to keep customers coming back
Customers need to be able to rely on you to fulfill all of your obligations. You need to be friendly, approachable, and a subject matter expert that people can turn to during even the most intense emergencies. But it also doesn’t hurt to go the extra mile. Businesses need to see that you’re making them more money than you’re costing them. Once they see this, they will be more likely to continue with your services and to recommend you to others.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Cloud Consulting Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is great for people who enjoy working with computers and learning more about how data can be protected from a variety of threats. There are many cloud providers, each with its own specific set of updates and options. This is a complicated business, so consultants should enjoy researching and learning the details of the cloud.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a cloud consulting business?
Cloud consultants answer questions, provide training, and update their clients on how they can make smarter decisions when it comes to their infrastructure. They may do the actual conversion of data and/or perform updates to the software as needed.
What are some skills and experiences that will help you build a successful cloud consulting business?
Owners should have a general IT background and ideally already be familiar with at least one of the major cloud providers. Typically, cloud consultants will specialize in one over the other, so they can better brand their services. Amazon, Google, and Microsoft are the three biggest heavyweights, so it makes sense to start with one of them. You may also want to get an official certification as a cloud expert to boost your credentials.
What is the growth potential for a cloud consulting business?
General adoption of the cloud has been extremely popular. More and more people are discovering that storing data on individual servers is as wasteful as it is inefficient. All cloud providers have seen growth in this past year, providing a tremendous opportunity for cloud consultants to jump into an exploding field.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a cloud consulting business?
Cloud consultants need to be willing to do their research when it comes to their specific cloud provider. You don’t necessarily need to be the most knowledgeable tech person in the world, but you do need to have a solid sense of how the platform works, what the options are, and how each package can benefit different businesses.
It’s the consultant’s job to give potential clients a realistic idea as to the vulnerabilities they may be facing by hosting their own data. Without scaring potential client with doom-and-gloom scenarios, you can convince people to accept your services once they know the true value that lies behind your advice. This not only helps boost business for you, but it can save your clients from an expensive hack or a website crash down the line.
Businesses that currently have their own servers may not understand how much energy they’re wasting for no reason. They may be confused or frustrated when their network malfunctions or their systems are inconsistent. A cloud provider makes efficient use of their client’s data while maximizing their security. Once the client is convinced, the cloud consultant can step in and take care of all the details.
Ideally, you should have a good idea of the code, equipment, and technology that makes each cloud provider unique, even though it’s not strictly necessary. It’s more important that you can provide accurate answers that even the most tech-illiterate person can understand. You should be able to map out smarter processes that help everyone do more.
Cloud consultants may want to offer a variety of packages to different clients. For example, a basic service may include five hours of consulting a week plus update reminders so clients never miss a new release. Larger clients may opt for additional consulting hours, plus instructional classes so that everyone can learn the new system. This helps clients feel as though they can customize their services, which can further cement your professionalism in their minds. If you’re just starting out, you may be able to offer fully customizable services to your very first customers.
How and when to build a team
Cloud consultants will likely want to stay on their own for a while as they build up their client base. If you do want to expand your services or even just hire an assistant, you’ll need to hire people who are as knowledgeable and courteous as you.