Setting up a consulting business can be both exhilarating and intimidating. It may open new opportunities to leverage your expertise and experience and convert services into a profitable venture. On the other hand, it may also bring some fear given the legal and technical demands, especially if it will be in a foreign country.
Luckily, the Philippines has always been a welcoming country to foreign tourists and entrepreneurs alike. Recent amendments to the corporate laws and the passage of R.A. 11032, or the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018,” also promise more inclusive business setups and streamlined business registrations and compliance processes.
In this guide, we’ll walk you through the crucial stages of setting up your consulting business. Feel free to drop your comments and inquiries to the comments section below or talk to our business consultants for professional advice and assistance.
Consulting Business
A consulting business can be an individual or an entity that provides expert advice and knowledge to help individuals, businesses, and organizations in a specific field or industry. Its primary aim is to help clients solve problems, improve performance, and achieve their goals through specialized knowledge and guidance.
Key Aspects of a Consulting Business
Generally, a consulting business plays a pivotal role in helping individual and organization clients navigate through the complex challenges, implement effective solutions, and achieve targets. Here are the key aspects of a consulting business:
Expertise and Specialization
Consulting businesses should have a particular focus or a specific area of expertise, such as management, finance, IT, human resources, marketing, or legal affairs. Consultants can leverage their solid experience and profound knowledge in order to be able to offer tailored solutions to clients.
Services Provided
Services vary depending on the area of expertise. Common services include strategic planning, process improvement, project management, training and development, market research and market research, among others.
Client Engagement
Clients are at the center of the business operations. Consultants have to work closely with clients to understand their unique needs, challenges, and preferences and ensure successful implementation of recommendations.
Business Model
Different consulting businesses operate on different business models. A business model may be based on hourly or daily rates, project-based fees, and retainer agreements.
Value Propositions
Consulting businesses lie on their ability to offer specialized knowledge, guidance, and other external perspectives that may not be available in their competitors.
How to Set Up a Consulting Business in the Philippines
Both local and foreign entrepreneurs and investors are welcome to register and run businesses in the Philippines. Most industries, including the consulting sector, are open to foreign direct investments. To set up a consulting business, follow this helpful guide:
1. Decide on Your Niche.
What are you an expert in? What skills and knowledge can you impart to an organization to help them improve the way they do business? To be a consultant, you need to have a certain degree of authority in a field of interest that can be of use to an organization. If you have a license, a degree, or accreditation in a specialized field, that can add to your credentials as a consultant.
In the Philippines, the most sought after consultancy services include business formations, acquisitions, and mergers, management and strategy development, ISO accreditation, public relations, market research and analysis, human resource management, design, IT, and website development.
2. Develop a Network.
Join clubs, organizations, trade events, and similar activities related to your field of expertise, or even social clubs and non-professional groups where you can meet like minded individuals who may refer you to potential clients.
Starting and growing a network is important for several reasons. It can help spread word of mouth about your services and connect you with potential clients. You will also get to learn more about your industry and keep yourself updated with the latest trends and developments in it, which you can use in keeping your services competitive and updated.
3. Establish Your Expertise.
Find opportunities to share your knowledge, such as acting as a speaker or resource person for events and seminars, self-publishing a paper or a book, contributing to a website or magazine, and so on. While these may not be income generating activities, they can help establish you as an expert in your field.
4. Have the Right Tools and Human Resources.
At the start of your business, you may not need a large staff, but make sure you have the essential personnel to carry out jobs. In addition, it’s important to invest in any tool and equipment you might need, including software and apps.
5. Market Your Business.
Selling consultancy services can be more difficult than selling tangible products. You may need to tap into clients or customers who probably are not even aware they need your services. Analyze your business and what you have to offer, and pinpoint your potential markets. From there, you can identify the best avenues to spread awareness of your services. Here are some of the most effective ways to market a consulting service:
[a] Website. People will want to know about who you are and what you do, and there’s no better way to do that than having a website where you can clearly state the type of services you offer and how you can help other businesses.
[b] Social Media. With everyone in social media these days, Facebook, Twitter, LinkedIn, and other platforms can be highly effective in reaching potential clients and spreading word about your services. In addition to promoting your business on your social media, consider advertising on these platforms, as well.
[c] Email Marketing. Email marketing is most effective when you have developed an email list of businesses or individuals with whom you at least had initial contact. Cold emails, or emails sent to businesses you’ve never communicated with previously, may not be as effective as recipients tend to ignore or even block emails from unknown senders.
[d] Networking. As mentioned previously, networking is a highly effective marketing tool for a consulting business. It’s an excellent way to get introduced to the right people and receive referrals.
6. Keep Growing Your Knowledge and Abilities.
Everyone benefits from continuous education. By keeping yourself informed about the latest trends and developments in your field, you’re better able to provide quality service to your clients and keep their trust. It also helps you identify and implement any adjustments or changes to your programs and services if necessary.
7. Register Your Consulting Business.
Like any other business, a consulting business must be duly registered with the government regulatory bodies and agencies to ensure legal operations and compliance with regulations. If you have already decided to establish one, choose the type of business structure. It may be a sole proprietorship, partnership, or corporation. Each has its own set of documentary requirements and implications for ownership and management.
After deciding on the business structure, process the reservation and registration of your business name. For a sole proprietorship, this involves reserving and registering the name with the Department of Trade and Industry (DTI). If you are forming a partnership or corporation, the name should be reserved and registered with the Securities and Exchange Commission (SEC). For cooperative businesses, the Cooperative Development Authority (CDA) handles name reservations and registrations. It is advisable to have alternative names prepared in case your preferred choice is unavailable.
Particularly for corporations, preparation and submission of incorporation documents, such as the duly notarized Articles of Incorporation (AOI) and company bylaws, to the SEC require special attention. One person corporations (OPCs), however, are not required to submit bylaws, but additional documents may be required for registration. Consultations with corporate law experts may also be necessary to ensure that all legal and technical requirements are met.
In addition to registering with the SEC or DTI, you must also obtain various clearances and permits from the local government units (LGUs) where your consulting business will operate. These include the barangay business permit, mayor’s permit, locational clearance, and certificates issued by some agencies.
Furthermore, registering with the Bureau of Internal Revenue (BIR) is another important stage. You will need to submit several forms, including BIR Form 0605 for annual registration tax payment, BIR Form 1903 for business entity registration, BIR Form 1905 to register Books of Accounts, BIR Form 1906 for authority to print receipts, and BIR Form 2000 for documentary stamp tax on shares and lease agreements for domestic corporations.
As a consulting business employing workers, you will also need to comply with labor and employment laws, which include registrations and compliances with the statutory agencies, including the Social Security System, Home Development Mutual Fund (Pag-IBIG Fund), and Philippine Health Insurance Corporation (PhilHealth). These registrations ensure that you meet all social security and health insurance obligations for your employees.
By following these steps and ensuring all documentation and registrations are completed accurately, you can successfully establish and operate a consulting business in the Philippines.
… and you might just need our assistance.
Ready to set up a consulting business in the Philippines? Set up a consultation with FilePino today! Call us at (02) 8478-5826 (landline) and 0917 892 2337 (mobile) or send an email to info@filepino.com.
