How to Start a Cloud Consulting Business

Cloud Consulting Business Image

A cloud consultant provides advice, services, and instructions to businesses who want to move their data to the cloud. They may hold formal classes to bring people up to speed on the new protocol for organization, security, and storage.

Learn how to start your own Cloud Consulting Business and whether it is the right fit for you.

Start a cloud consulting business by following these 9 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 step guide to starting your cloud consulting business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

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 long it will take you to break even?
  • 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 very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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STEP 2: Form a legal entity

Establishing a legal business entity such as an LLC prevents you from being personally liable if your cloud consulting business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.

You should also consider using a registered agent service to help protect your privacy and stay compliant.

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For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?

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!

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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?.

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.

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.

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:

STEP 7: Get Business Insurance

Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.

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.

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.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

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: Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Start A Cloud Consulting Business In Your State

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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.

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.

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.

Next Steps

Get more ideas with our Business Ideas Tool.

Check out our How to Start a Business page.

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