How to protect yourself as a consultant

Vulnerabilities to your business come in many forms, between cash flow problems, innovation demands and poor customer relations. Discover how to safeguard your business in just a few steps in this article. 

We’ll walk you through various ways you can protect yourself as a consultant with common business tactics, including: 

• Business development and marketing
• Insurance
• Customer Service
• Invoicing terms and cash flow management
• Accounting quality
• Gain a better financial overview with Countingup

Consultancy businesses are slightly more exposed to business risks as it’s easier to patent products and designs, rather than services. For this reason, you’ll need to be even more protective in defending your business from industry and business pressures. Fortunately, this doesn’t have to be difficult – we’ve outlined some easy to achieve steps below for you to start with.

Protecting your consultancy business through innovation and marketing aims at making sure you’re equipped to beat your competition.

As previously mentioned, service businesses like consultants need to make sure they’re at the forefront of what their clients want and their industry needs. Developing your business and marketing your superior value is a crucial element of protecting your business. Learn more about achieving this in our articles: 

• 6 ways technology helps small businesses
• What are market trends in a business plan?
• What is product development?

Even once you’ve got customers through the door because they’ve heard you’re the best, you need to make sure that reputation stays. A vital tactic to ensure this is through good customer service. 

This is because word of mouth marketing offers an invaluable opportunity for businesses: nearly 70% of consumers base their purchasing decisions on the recommendations of family, friends, peers and colleagues. Polish your customer service techniques and read the following articles: 

• How to improve customer service
• Four factors that make good customer service
• Customer feedback techniques for business start-ups

What sort of legal protection does your business have? One of the most useful safety measures you can take to protect your business is to take out a professional indemnity insurance policy. It helps protect your business if your advice causes financial harm to businesses (whether by accident or from ill-informed research).

Similarly, you may also be able to trademark certain parts of your business, including things like your logo and colour scheme. Speak to your lawyer about intellectual property protection for your business and read the following articles on other types of business insurance:

• What is public liability insurance?
• What is excess in insurance?
• Your Guide to Self-Employed Health Insurance

Protecting your business’ finances is arguably the most important action listed in this article. Issues with your cash flow can cause many other problems within your business as you need working capital to do almost everything in your business: from paying suppliers, investing in advertising or travelling between clients.

One of the clearest things you can do is have clear payment terms shown on your invoices, specifying both deadlines and accepted methods of payment. Similarly, having an awareness of your financing options and knowing how to firmly (but politely) chase up late payments can also make sure you’re never stuck for cash when you need it most. Find out more in our articles:

• How to fix common invoice mistakes (and avoid them next time)
• How to improve cash flow for your business
• How to calculate cost of capital

As a final pointer, you can protect your business with accurate record-keeping and accounting. Some of the main records you’ll need to keep are income from invoices and investments from lenders or shareholders, expense receipts (including things like travel, operating expenses, cost of goods, assets and liabilities, as well as taxes on your profits and VAT records (if applicable). 

However, if you’re just starting out, you should begin to take small steps like setting up a dedicated business bank account in order to get a clearer picture of your business finances (without the interference of personal transactions messing up your records). Find out more about our top accounting and finance tips from our articles: 

• 8 must-measure metrics for small businesses
• Tax tips for small businesses
• 3 types of financial reporting every small business needs

We can’t run your whole business for you, but we can make huge parts of it easier. Countingup is the business current account and accounting software in one app; with all your financial information available under one system, Countingup automates time-consuming bookkeeping admin and allows you to take a better overview of what’s happening to your business. 

Countingup comes with an automating invoicing feature so you can send professional and timely invoices to clients (and fix deadlines) easily. Countingup also comes with an expense categorisation tool and a receipt capture tool so you can organise and update your accounts even while on the go. Best of all, it works in real-time – offering you cash flow insights about your income and expenses as they happen.

Join the thousands of other UK business owners using the Countingup app to save time on your financial admin and focus on growing your business. 
Protect your business by automating the important stuff and give yourself time to focus on the rest. Find out more here and sign up for free today.