How to Start a Consulting Business in Retirement

woman in retirement starting consulting business

One of the fastest, lowest cost and most fulfilling ways to increase income in retirement is to start a consulting business. If you’re older, like me, and have undoubtedly developed some amazing skills over the years.

But you may not be as much of a marketer, or as tech savvy as the younger generations, unless you happen to be in the marketing or IT field.

And it takes some of each of those skills to start a consulting business these days, at least if you want an online presence.

So, it can seem very confusing and somewhat overwhelming about just how to start a consulting business As someone who has done part time consulting over the past 15 years, I’ll share with you, step by step, how to start a consulting business in retirement with ease.

This post will cover how to choose which type of consulting is best, how much to charge, whether to be local or online, picking a niche, some legal and tax tips we learned over the years that we wish we had known from day one, and more.

Clarify How Much Consulting Income You Want

Starting a consulting business all begins with deciding just how much income you want to make and how many hours you want to work.

Defining this right up front will save you from wasting a lot of time and energy and point you in the right direction. From your personal wealth plan, determine how much consulting income you want.

If you haven’t done that yet, follow the steps in my post how to Create a Wealth Plan.

For example, if you want to make an extra $2,000 a month income from consulting, and you can charge $200 an hour, you’ll need to work only about ten billable hours a month.

One best things starting a consulting business for extra retirement income is that there are basically no costs unless you decide to set up an LLC before you begin.

In fact, it’s best to test out any income stream idea with very minimal cost since it may not work, or you may want to tweak the focus of your consulting. This is called proof of concept.

Therefore, all you really need to start a consulting business focused on a local market is 100 business cards unless you are entering a highly litigious field as explained more below.

(Also, keep reading and you’ll know what to put on your business cards!) And with a local, startup or small consulting business, almost all of your ongoing revenue can be kept unless you plan to spend a lot of money on marketing or staff.

How Much Should You Charge for Consulting?

The amount you charge per hour of consulting work will be a factor of several things.

The Industry

Some consulting fields are obviously more lucrative than others. But there are often incorrect assumptions about how much you can charge for consulting. For example, you would think a dog training consultant would be able to charge less than a startup business consultant.

You may have read here how I happily paid a dog training consultant $185 an hour! That leads me to the next factor that affects how much you can charge for consulting.

The Results You Deliver

The results you will deliver will influence how much you can charge for consulting more than anything. I’ll share a story to illustrate this important and often missed point. Bear with me.

The story is a little long but makes an important point you’ll always remember that will help you realize the value of your skills.   Camille Gaines

After hiring three dog training coaches, and going to obedience school three times, I just couldn’t break my big white Labrador, Blanco, from a nasty and dangerous habit called zooming.

He would get overly excited, usually when he heard flowing water.

Since I walk Blanco off leash on our neighborhood hiking trails with a flowing creek almost daily, this was an enormous problem.

He would run fiercely in circles within inches of me, and then jump up and nip my arms as he circled trying to engage me in play as though I were also a puppy. (Now you see why it’s called zooming!) Sometimes he would knock me over.

After wasting hours and a lot of money with those three other dog trainers, I was ready to pay whatever it would take to stop this routine since I had decided I would have to place my beloved Blanco if I couldn’t break him.

To make the problem worse, this was causing a conflict between me and Larry. So I was looking for someone to resolve marital issue, a daily dangerous situation and a deeply emotional problem.

The I Would Pay Anything Problem

I was ready to pay almost anything to resolve this one gigantic problem!

You see the value here? After hearing about this “very expensive” but efficient and results driven dog trainer, I was ready to pull out my wallet. So, we (me, my husband, and Blanco) had one session with the dog training consultant that charged $185 an hour.

Zooming was never a problem again. The result Alex delivered was worth every cent because it got big results in very little time with very little effort from us.

The Results You Deliver

What result can you deliver? Don’t downplay your skills! You’ve got them. We all do.

Here are some examples of results. A plan to remodel a kitchen in a beautiful yet economic way with the perfect layout? 

This saves time, money and makes everyone in the family happy during precious but busy family meal time! Starting an online business that can be sold for $1,000,000 in 5 years?

This delivers wealth, fulfillment, life enjoyment and peace about retiring! A suitable living plan for an aging relative that allows him to live well at an affordable amount?

This reduces years worth of stress, saves money, and makes the entire family happy. A solution that allows someone to wake up without headaches?

(I’ve also been there, and I spent thousands of dollars in solving this problem, too!) This restores health, the ability to work (thus have more money), ability to exercise daily (be healthy and live longer), be happy, feel good and live fully again!

What result will you deliver and what is the real value of that result? Here are more possibilities to get you thinking.

  • A company that succeeds
  • A child that graduates high school
  • A financial plan that delivers fund for life
  • A diet that heals
  • Assistance that provides more family time for a busy executive

Again, don’t downplay your skills. What have you figured out that others haven’t?

Your Clientele

What can your clients afford? You may be thinking that you want to do good in the world and help others that can’t afford you. Me too, so here’s what I do to overcome that dilemma.

I provide tons of free content along with my book at a very low cost. I have also done pro bono speaking for women challenged with low incomes. You can always help those who cannot afford your consulting a higher rate.

Like the airlines say, put in your oxygen mask first. Charge the highest rate you can get for the results you deliver unless money is not part of the equation for you. If you’re feeling unworthy of charging a lot right now, you’re not alone. We all do. It’s called imposter syndrome.

Note that starting out at a low rate and increasing your consulting fees based on supply and demand is an excellent strategy. This will also allow you to gain confidence, tweak the focus of your consulting, and improve your consulting skills.

Decide How Much Time You Want to Work

You’ve dreamed of retirement for years, so how do you want to spend your time now that it’s finally here? I finally succumbed to the fact that I like to work.

I didn’t really know that until I didn’t work, and I allowed myself to be okay with accepting that I like to work. So I have always done some kind of “work” since I was a teen.

You may have found that you also enjoy some form of mental challenge or growth opportunity, also known as “work”. If you want to work 20 hours a week, for example, then you could plan on 10 to 17 billable hours, with 3 to 10 hours for running the business and marketing.

When you make more money, you can outsource many tasks, such as marketing, bookkeeping, and appointment setting.

Delegating Tasks in Your Consulting Business

Ideally, the increased revenue gained from delegating will pay for the cost of delegation. As a retired executive, that’s what the dog trainer did with a VA who set all his appointments and handled the billing.

Now, for example, over the years we have grown to a team of at least 4 to 9 outsourcers at any given time for our small businesses which have expanded beyond consulting.

The better results you can deliver, the more you can ethically charge. Then the more you can pay others to help you, thereby creating positive change for everyone.

And the more you charge, the more time you have to help those you want to serve because you have the income to delegate work to outsourcers (or employees if you choose).

Choose the Focus of Your Consulting Business

It can be hard to choose the focus of your consulting business. This is especially true after 50 because you know a lot about several things (even though you may not realize it).

One of the very best things about consulting as an extra retirement income stream is that you can test out your idea on a local market.

Most very successful consultants I know have tweaked the focus of their business at least once, if not many times, or started multiple businesses from an initial consulting business.

And many savvy consultants offer several services in related areas which comes about from seeing what their clients need as they work with them. After reading this post, you’ll be ready to pick a focus, so keep reading.


Almost everyone resists choosing a niche but the narrower your niche is the more you are an expert. For example, if you need to hire a tax consultant to help you with your  real estate rentals, do you want to hire someone who specializes in real estate?

And would you pay more for that expertise? I sure would because it should save me tax money and stress. If you know you want to start a YouTube channel for your business, would you rather hire a YouTube consultant or a social media consultant who spends 10% of their time with YouTube marketing?

You get the idea. The narrower your niche the more you are an expert. Plus, the narrower your niche, the less competition you have and hence the more you can help your clients. Don’t think of consulting for people who own a small business.

Think of consulting for small business owners over 50 who want to sell their small business within 5 years.

Read my related post How to Rewire Your Brain for Success. 

Define Who Needs Your Help

Who needs the results you deliver? In the dog trainer example, it was dog owners that needed him. But we can narrow that down to owners of dogs with behavior problems.

And since dog trainer has a high one time fee that delivers results, he also wants only clients that appreciate the value of time, efficiency and results, and will gladly pay for it.

This could lead you to busy executives who make a lot of money, for example. Who needs exactly what you offer? And can you narrow that down more several times? Here are some examples.

  • Homeowners who just bought older houses in the $500,000 to $800,000 range
  • A small business owner who can’t figure out how to update her website
  • An independent financial advisor on a budget who is struggling to compete with the big firms when it comes to marketing

BTB Vs BTC Consulting

Do you want to work with businesses or individuals?  As a general rule, businesses pay more for consultants than individuals pay.

Plus, businesses can write off your consulting fees in most circumstances. And they can hopefully make more money in the end and recoup the cost of your consulting fees.  

Which Business Structure Is Best?

The type of service you offer will affect the best business structure for your consulting business. When it comes to choosing a business structure, you’ll want to consider both taxes and liability.  

Do You Need an LLC for Consulting?

If you decide to go with a highly litigious field for your consulting work, you’ll probably want an LLC, and you may also want business insurance. Talk with an attorney (or a legal or small business consultant) in your state, as LLC rules vary among states.

Note that if you do form an LLC, you will elect how it will be taxed. Many people misunderstand this. An S Corp is the most popular option that I see for very small businesses and solopreneurs.

You could always start out as a sole proprietor to test your idea if you are not in a litigious field.  Remember, I am not an attorney and do not give legal advice.

I just write about what I have learned from my experiences, certification and education to hopefully save you some time and money. The lessons I have learned in this area have been expensive and painful and I’d love to spare you some of that!  

Income Taxes for a Consulting Business

Income taxes on consulting income will depend on the business structure you choose. Having a small business can save money on taxes when handled correctly regardless of whether you are a sole proprietor, an S Corp or a C Corp.

But the differences in the tax benefits among business structures is remarkable, especially when you factor in health care costs, insurance, and tax rates that are affected by this important decision.

All of this is very important from a wealth building standpoint! There are some excellent books on the topic. Get one, read it, and then talk with a CPA.

While I am not a CPA, here is what I have learned from having a C corp, an S corp and several LLC’s over the past 15 years. (I’m also an AFC©, and have taken the federal income tax course twice two decades apart at the college level which has come in handy.)

Whatever business structure you choose, I would also offer these tips as soon as you start your consulting business.

  1. Get a business credit card or debit card that links to your business account and is used exclusively for business.
  2. Download the monthly expenses into a spreadsheet or use Quicken or similar for accounting and tax purposes.
  3. Save receipts. Often now, I will take a picture of a receipt with my phone and upload it right to Dropbox because many paper receipts deteriorate over time.

Treat your consulting work as a business from day one even if you’re just testing the waters.

What Do You Like to Do

So far this post has addressed pragmatic factors in how to start a consulting business in retirement. But probably the most important factor is doing what you like to do in your consulting business.

By doing so, you will be happier. You’ll also naturally be more successful because you’ll put in the required time and effort. Most of us worked for years doing work we really didn’t want to do.

Now you get to do what you want to do, get paid for it, and even save some money in taxes!

Coach or Consultant?

Do you want to be a coach or a consultant and why would you care? While the field of executive coaching has become popular in the past decade, in general, consultants work with businesses while coaches work with individuals.

But coaches and consultants would argue that point because the true distinction based on definition is that coaches help clients get their own answers while consultants provide information.

This means that a coach’s expertise is more broad based or top level while consultants are more knowledge based in an industry. A mentor of mine said that by calling yourself a consultant you can instantly raise your rate by more than $100 an hour!

I work as both a coach and a consultant depending on whether I am doing small business consulting for a financial service or doing wealth coaching with a client. Then I have a niche within each of these areas.

The terms overlap and you can call yourself whatever you want to best convey your consulting service as long as you don’t cross any legal or regulatory lines.

In the video below you can see the very first time I got paid for consulting for a Forbes 400 heir.


Local Vs Internet Consulting

Earlier you defined who needs your help. Clarifying where those potential customers are will guide you where to go to offer your services.

Here’s what’s exciting. You can offer your services to the entire world!

In one of our online businesses, we have clients from all over the world through our website. And it has always been an online business reaching a global market from day one.

Read my related post Is It Too Late to Become an Entrepreneur? Or Is It Too Late to Start an Online Business?

Expanding Your Consulting Online

Unless you are specifically offering a service that applies to local businesses, my suggestion is to serve a national or global market by setting up an online business. You may not want to do this initially like we did.

Alternatively, you can expand if it’s appropriate after your have tested out your concept. The best strategy will depend on who you are serving with your consulting work.

If being online sounds expensive and overwhelming, keep reading. Websites are very inexpensive now. In fact, I built this website myself for under $100.

I am not a techie at all but I have been managing our websites for well over 10 years now. You can also outsource to have a simple website built for under $500 if not less if you follow the process I used for this website.

Read my related post Starting an Online Business After 50.

Loosely Define Your End Goal

Allow yourself to think bigger than you may be thinking. Many people start a consulting business and later expand into other areas. For example, we now have online courses, memberships and group programs.

And our client’s needs led us to have software developed which we also sell. When structured correctly, you can end up with a valuable and marketable online asset which began as simply a way to showcase your small consulting business.

As you decide what kind of consulting to do, consider if this possibility appeals to you. If so, lean toward an area that allows you to scale your expertise through group programs.

While it may not seem like it, almost every type of instruction can be scaled. For example, in my income coaching, I have helped doctors and therapists scale by teaching groups, something that seems impossible.

And almost anything can be taught virtually. I know of artists, business consultants, lawyers and CPA’s who provide group programs virtually.

One really great thing about group programs is that they allow you to help more people for a fraction of the cost to your clients when compared to one on one consulting.

I really like that about group programs since most people cannot afford private consulting services.

Read my related post Businesses to Start Later in Life.

Consulting Income in Retirement

Let’s put retirement consulting income in perspective.

Just think, it would take $600,000 worth of dividend stocks yielding 4% to generate that same $2,000 a month of income that you can make from consulting very part time in an area you know well and enjoy.

And the upside potential is huge. And most of all, the work is fulfilling.

Read my related post Start a Business or Invest in Stocks?

Summary for Starting a Consulting Business in Retirement

Now you have seen 10 major factors for how to start a consulting business in retirement. Don’t think you need to have it all figured out before you start. Just start.  

The best place to start is with my Ultimate Wealth Plan. You can get it here now.

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The information on this website is for education only and is not to be construed as personal financial advice.