How to establish a consultancy business in the Netherlands? A general guide
Ever wanted to operate as an independent consultant? In the Netherlands, you can benefit from many possibilities to achieve this dream. Starting a consultancy business involves a lot of thinking on your part though, before you actually establish the business. So where do you start? Whether you are an independent communication consultant, a legal consultant or an ICT consultant, this article will help you on your way to starting your own business. Do colleagues and friends often ask you for advice? Then you have probably already thought about setting up a consultancy firm. We will outline some of the most important factors you should consider, in order for your business to achieve potential success. We will also provide you plenty of examples and extra details to think about.
Why would you start a consultancy business?
Some people have worked as a consultant for a larger firm, and decide they want to jumpstart their career by opening their own business. In other cases, maybe the profession of consultant simply appeals. The Dutch consultancy market is a very vibrant and demanding one. During the past decade it has grown exponentially. One of the main reasons for this development is the improved flexibility of the Dutch labour force. Not only do people work more from home, but many previously employed consultants started their own smaller businesses. This lead to an increase in the amount of Dutch freelancers.
The fact that these smaller firms now exist, has put some serious pressure on some very well known larger firms. A large firm has a lot of expertise and experience to offer, but due to the amount of employees, the firm can sometimes put a consultant on a project who doesn’t fit there at all. This has led to many clients preferring somewhat smaller consultancy firms. A smaller firm offers a more personal approach, often with a very clearly defined niche. Next to that, the rates of a smaller consultancy form are often lower than the rates the large companies offer. This makes consultants also affordable for smaller businesses.
Which basic knowledge do you need to start as an independent consultant?
If you want to start a consultancy business, experience and knowledge about this field of work is essential. No client will hire you, if you cannot prove your worth. In general, consultants are very proficient at conducting research and analyzing the results they have obtained from the research. Consultants collect a lot of (related) data, which will help them come up with workable solutions for the client they work for. A consultant is able to identify behavioral patterns, production bottlenecks, market trends and of course customer preferences. With those and other factors, they can create standard business processes that can help the organization achieve its goals and objectives.
As a consultant, your core responsibility is to improve your client's operations or business activities, by making changes based on your analysis. You must be able to implement the changes for your client within an agreed time. Companies are willing to pay very high rates, as long as they get the preferred results. A very specific trait of the consulting industry, is that there is a readily available market for such services, simply because clients naturally want to improve their performance on an annual basis. Companies always strive for evolution and more success. So if you are well positioned, knowledgeable and know how to deliver results, you can achieve very good results with a Dutch consultancy company.
Consultants are good in one thing: problem-solving
If you want to know whether you can keep your head above water as a consultant, you should look into your personal problem-solving skills. As a consultant, you are constantly solving problems for your clients. When a client offers you information about an internal issue, you create a business case out of this. It is very important to know which problem you are actually solving. One way to look at the bottleneck from all angles, is to interview many employees who are involved in the same business process. The business case generally consists of three steps: determination of the problem, finding out why it exists at all, and offering a solution to fix the situation.
Determining the problem
There are many possible business cases, since every company has its own personal problems. One issue that very often comes up, are outdated business processes. Since technology evolves very rapidly, businesses need to update and refresh their business processes on a structural basis. In such cases, you should find out exactly which processes need updating and how you will achieve this.
Figuring out the reasons for the problem’s existence
In the case of business processes, the fact that these have not been updated is mainly the issue. But with other problems, you should dig deep and find out how the internal issue originated in the first place. Maybe some employees are behind on work? Or maybe management hasn’t provided enough information to its employees? Maybe the employees need training? Every problem has its own solution, and it’s your job as a consultant to expose the core of the difficulties.
Offering a solution to the problem
Once you know the problem and the reasons for its existence, you need to come up with solutions to solve it. Obviously, that is what your client is paying you for. In the case of the previously mentioned business processes, the best solution is to implement new and updated processes. Make sure that you are good at solving problems, before you start a consultancy business. Otherwise, you should not expect to earn a lot of money.
Choosing the specialization or niche of your business
If you want to open a small or medium-sized consulting company, then we usually recommend clients to choose a well-defined niche. In the consultancy world, a niche usually means specializing in a certain type of client and/or subject. To determine your niche, you should look at what skills and knowledge you have that could benefit clients in the Netherlands. Of course, you need to have the necessary expertise to be able to give advice at all. Do you know a lot about a certain subject? Then you can start a consultancy business within this field it. The most chosen niches in the consultancy world are:
- Marketing consultancy
- Communication consultancy
- Management & strategy consultancy
- ICT consultancy
- Operations consultancy
- HR consultancy
- Legal consultancy
A lot of start-ups are marketing consultants. This is also one of the easiest niches to enter, since you can rely much more on your expertise, than your education. Marketing is something that can be very easily learned online, without the need of formal education. You will need to have a knack for marketing subjects, and it’s imperative that you build a solid reputation during the first years of your business. Marketing results can very easily be measured via a wide variety of marketing tools and apps. If you are also a graphic designer, then this is an added bonus. If not, take into account that many clients will ask you to design new company logo’s and similar things. You will need to outsource this, if you don’t know how to create material. Keep in mind that the marketing consultancy industry in the Netherlands is extremely fierce. You will have to be able to stand your ground, in order to succeed.
The communication consultancy market in Holland is also booming. Clients are always looking for new ways to deliver the same message. Communication consultancy also involves writing, so if you are a good writer and have a talent for solving marketing issues too, this might provide a good start for your business. It can help to join the Dutch Association of Recognized Advertising Consultancies (VEA). This is the association of communication consultancies in the Netherlands. There is also a lot of competition in the communication consultancy industry, so you will need to stand out and offer something that others don’t.
Management & strategy consultancy
The management and strategy industry is mostly aimed at larger companies, in which there is also high-level decision-making involved. In essence, if you are a management consultant, you will help your clients with managerial problems. This means you will also act as a company executive in some cases. Large corporations often hire external parties to solve executive issues, due to the fact that external parties can look at problems independently. It is imperative that you have experience with management consultancy before you start a business, because you will be dealing with high-level problems that require a solid amount of experience and knowledge.
The operations consultancy industry is specifically aimed at the optimization of operational and business processes. A good example is advising on the supply chain of a logistical company. But as an operations consultant, you can have clients from all industries. Often, governmental organizations are looking for operations consultants, to streamline the vast amount of processes within the organization. This niche requires you to be adept in logical thinking, and seeing where processes are failing.
Human resources is mainly concerned with the personnel policy and the organizational policy of the client. In Dutch, HR consultants are also referred to as P&O consultants. This means you will help out clients with hiring employees, training employees and all kinds of administrative matters. You will generally need to show education within this field, if you want to start a successful company.
ICT is currently one of the consultancy industries with the highest growth. This sector includes information and communication, and the space where these two overlap. In general, as an IT consultant you advise companies on the solutions they want to achieve in the field of digital work processes and services. This can be system development and system integration, but also the introduction of entirely new systems. Proficiency with information and technology is a must to be able to be an IT consultant.
Last, but certainly not least, there is the option of becoming a legal consultant. In the Netherlands you do not need a law degree, to name yourself a legal consultant, since the title is not protected. It is essential that you have experience with and knowledge of the Dutch legal system, otherwise you will not be able to help any single client. You can also start a legal consultancy business based on the legal framework of your home country, and help expats and people who might need your specific expertise in the Netherlands.
The necessity of market research
So you want to start a consultancy company, and you know which niche is best for you? Then it’s time you do some market research. This involves creating a target audience that you will research first. You can do this by looking up demographics about your niche on the internet, and finding out which area might have potential clients. You can also schedule interviews with people from your target audience, in which you talk about your plans and their wishes. It is also possible to start a conversation with people from your target group in focus groups, or to send out online questionnaires via social media. The most important thing to find out, it whether there are clients in the Netherlands who are willing to pay for your services.
How do you acquire new clients for your business?
The Netherlands houses a very wide array of consultancy businesses. The best thing you can achieve, is to stand out to your specific type of client. A potential client will be looking for a certain type of expertise, and it’s your job to know when someone is looking. The way you present yourself is also just as significant, since first impressions are very important in the consultancy industry. You should pay a lot of attention to the overall look and feel of your website and marketing material, but also the clothes you wear when you have a meeting with a potential client. Finding clients can be tedious sometimes, but the Netherlands offers an enormous amount of networking events for all industries. You can also join a certain type of business club, or look at online platforms aimed at freelancers. Once your business is up and running, and your clients are satisfied, you are sure to get new projects via referrals.
Explore the competition in your region or field
Once you know what your market is waiting for, it's important to investigate what the competition is doing. The best things to do is to look up at least ten competitors within your region, including large as well as smaller firms. We also advise to map out the ten best firms within your specific niche. Examine the strengths and weaknesses of each competitor, so you can quickly see where your opportunities lie. You can also request the annual accounts and extracts of your main competitors from the Dutch Chamber of Commerce. Also research what prices they charge, since this will help you in determining a realistic rate.
Choosing a legal Dutch entity for your business
Every entrepreneur must choose a Dutch legal entity, to be able to register in the trade register of the Chamber of Commerce. Which form is most suitable for your company, depends on factors such as your expected turnover and number of board members. The Netherlands offers the following legal entities:
- Sole proprietorship
- General partnership
- Private limited company
- Public limited company
- Limited partnership
We strongly suggest establishing a Dutch BV, whether it’s a new firm or a subsidiary. This legal entity offers limited liability, plus it is also seen as a professional choice to select a Dutch private limited company. If you would like some advice on this matter, feel free to contact the team of Intercompany Solutions anytime.
Creating a solid business plan
If you have a clear idea of what you are going to do, you can create a stable basis for your future consultancy company. That is why it is highly advisable to draw up a business plan. Your business plan is essentially a tool that will keep you on the right track. You can save your plan and update it yearly, when you look at your business results. A business plan makes it very clear what you want your business to be, and how you will achieve this exactly. There are many templates on the internet regarding a business plan, you can browse around a bit to find a template that resonates with you. Keep in mind that you can also use the business plan, to convince potential investors.
A business plan should always answer the following questions:
- What exactly are you going to do?
- Where are you going to settle?
- Which legal form do you choose?
- Is there a market for your product?
- How will you get customers?
- What about your competition?
- How much money do you need in total to be able to set up this company?
Many starting entrepreneurs find writing a business plan quite difficult. Intercompany Solutions can assist you with this process, if you feel you can use some help.
Contracts and legal documents you might need for your consultancy businesses
Once your business is established, you will need to prepare some standard legal documents for projects. One of the most important documents is the assignment agreement between you and potential clients, which is also called a freelance contract. This contract arranges the specific terms under which you will work for your client(s). This will inevitably vary per client, as every consultancy project will be subject to different terms and conditions. There is no legal requirement that obliges you to create an assignment agreement, we strongly urge you to do this, though. Because an agreement makes it easier to resolve any issues that might come up in the future. You can make a draft for your first client, which you can then use for any consecutive client as well.
Next to the assignment agreement, we also advise you set up general terms and conditions for the services you offer. These terms and conditions apply to all business activities you get involved in, as well as all clients. You can describe various standard conditions, such as payment and delivery conditions. Another document you should have at the ready is a non-disclosure agreement (NDA). A lot of the work you will do might entail sensitive information. Signing an NDA will make the relationship between you and your client feel more safe and trustworthy.
If you choose to establish a Dutch BV, you will also have to sign an employment contract between yourself and your company. This is due to the fact, that you are employed by your own company as a managing director. You can also choose to set up an account agreement between your BV and yourself. This enables you to establish a loan between you and your company, without having to set up a loan agreement every time you do this. The last mentionable document concerns a shareholders’ agreement, in the case that your Dutch BV will have multiple shareholders. This document describes the exact relationship between the shareholders, to avoid any misunderstandings in the future.
The registration procedure
Do you feel like a Dutch consultancy business might be something for you? And have you read all the information above, still feeling like this could be a possibility for you? Then you should inform yourself about the Dutch company registration procedure. You can find more information about it here. This will enable you to prepare some necessary documents, that you will need to make the registration final. Intercompany Solutions can assist you during every step along the way. Once we receive all documents, we will validate these and send them back to you to sign. After we receive the signed documents back, we start the official registration procedure. We can also help you with extra tasks, such as setting up a Dutch bank account. The entire procedure can be realized within just a few business days. Feel free to contact us anytime for more information, or a clear quote for your future business.