Dr. Chris Downs

We know from ample research (e.g., US Bureau of Labor Standards, 2022) that most new business ventures fail within the first 6 years. By some estimates (Sabre Financial, 2023), 20% of new consulting practices fail during the first year, and over half of consulting startups are out of business within 5 years.

For those of you wanting to make a career of solo consulting, those failure rates should be breathtaking. But those same data can also be empowering! Let me explain.

If you have not yet launched a solo consulting business, or are fairly new, knowledge of the factors that lead to business failure is powerful. I repeat: Knowledge is Power!

“Successful consultants anticipate potholes in the road ahead. Learn about the biggest potholes and plan for them! ”

— Chris Downs

There are many reasons consulting businesses get into trouble and close. Sometimes those reasons happen suddenly, and the consultant sees no way to remain in business. Other times, the reasons are insidious, gradually growing in size until the consultant looks back and realizes the danger signs were there but were ignored.

In the next five blogs, I’ll review many of the more common reasons solo consulting practices fail. If you are looking for ways to minimize these risks, please consider reading my book, Lessons Learned from a Successful Consulting Practice. LINK

In general, the risk factors that can lead to closing are grouped into three general categories.

1. Risks associated with consultants

2. Risks inherent in business marketplaces

3. Risks linked with clientele

I will go into some depth with these in the coming blogs.

Notice: This blog wholly reflects the views and suggestions of Dr. Chris Downs. Readers’ use of his views or suggestions are wholly the responsibility of the reader as reflected by their actions, reactions thoughts, statements, and behaviors. Dr. Downs accepts no responsibility for readers’ use of his words. Further, this blog contains no intentional or structured therapeutic intent nor is the content designed to harm or improve the psychological state of the reader. Readers are responsible for their own reactions to and/or use of any and all suggestions or advice.