How to Start an AI Consulting Business in 2024: A Complete Guide

A few years back, a hand injury threw a wrench into my career as an MLE. After some time away from the keyboard, I made the shift to consulting and soon found myself making more money while working less hours - from $150/hour to clients happily paying $60,000 upfront. Now I'm consistently earning between $40,000 to $80,000 monthly through my AI consulting practice.

But it wasn't always easy. This comprehensive guide will show you exactly how to build your own successful AI consulting business in 2024, avoiding the mistakes I made along the way.

Why AI Consulting in 2024

The timing couldn't be better for AI consultants. Every company is scrambling to integrate AI into their operations, but most lack the in-house expertise to do it effectively. As traditional deterministic software gets replaced by probabilistic systems, there's a massive knowledge gap that needs to be filled.

I'm seeing this firsthand - companies are desperate for experts who can help them:

• Build and evaluate RAG systems

• Implement AI features effectively

• Train their engineering teams

• Make strategic AI decisions

The market demand is unprecedented, and it's only growing.

Understanding Your Value Proposition

The biggest mistake most new consultants make is undervaluing their expertise. Here's what I learned from Alex Hormozi about understanding and communicating value:

Value = (Dream Outcome × Perceived Likelihood of Achievement) ÷ (Time Delay × Perceived Effort/Difficulty)

Let's break this down for AI consulting:

1. Dream Outcome: What specific result can you deliver? (e.g., reducing hallucinations in their RAG system, improving customer retention)

2. Likelihood of Achievement: How can you prove you can deliver? (This is where case studies and previous experience come in)

3. Time Delay: How quickly can you deliver results? (Speed is often crucial for AI implementations)

4. Effort/Difficulty: How easy can you make it for the client? (Your expertise should reduce their implementation challenges)

The key is focusing on outcomes, not tasks. Instead of saying "I'll build you an AI system," position it as "I'll help you reduce customer churn by 20% using AI."

Setting Up Your Business Foundation

Before you take on your first client, you need to set up your business properly. I've detailed my complete setup process in my consulting stack post, but here are the essentials:

1. Form an LLC (I recommend Doola for hassle-free setup)

2. Open a business bank account (Mercury is excellent for consultants)

3. Set up proper accounting systems

4. Implement essential tools (scheduling, contracts, invoicing)

Pricing Your Services

Here's where most technical consultants leave money on the table. Instead of hourly rates, use what I call the "Airline Model" of pricing:

1. Economy Class: Basic service package

   • Project-based scope

   • Limited interaction

   • Standard deliverables

2. Business Class: Enhanced service

   • More frequent interactions

   • Additional deliverables

   • Higher level of support

3. First Class: Premium offering

   • Full project ownership

   • Strategic partnership

   • Guaranteed outcomes

For example, one of my recent proposals looked like this:

• Economy: Basic RAG system implementation ($20,000)

• Business: Implementation + team training + weekly progress reports ($30,000)

• First Class: Everything above + guaranteed performance metrics ($50,000)

The key is to give clients options while ensuring you're excited about delivering any tier they choose.

Building Your Client Pipeline

There are four main ways to generate leads:

1. Paid advertising

2. Warm outbound (referrals)

3. Cold outbound

4. Free content

I've found content creation to be the most effective long-term strategy. Here's my process:

1. Take discovery calls with potential clients

2. Record and transcribe the calls

3. Turn common questions and challenges into blog posts

4. Share insights on Twitter and LinkedIn

5. Let the content bring new clients to you

I now get about 20,000 views monthly on my blog, resulting in 2-3 qualified leads per week.

Tools and Systems

To run your consulting business efficiently, you need the right tools. Here's my essential stack:

• Project Management: Notion for organizing client work

• Communication: Circleback for meeting notes and follow-ups

• Contracts: Dropbox Sign for professional documentation

• Scheduling: Cal.com for easy booking

• Content Creation: Claude AI for writing assistance

For a complete breakdown of my tool stack and why I chose each one, check out my detailed consulting stack post.

Getting Started Today

Here's your action plan for the next 30 days:

1. Week 1: Set up your business foundation

   • Form your LLC

   • Open business accounts

   • Set up your tools

2. Week 2: Define your offering

   • Create your service tiers

   • Write your first case study

   • Set up a simple website

3. Week 3: Start content creation

   • Write your first blog post

   • Set up social media profiles

   • Create a content calendar

4. Week 4: Begin outreach

   • Reach out to your network

   • Schedule your first discovery calls

   • Start building your pipeline

Want to Fast-Track Your Success?

I've compiled everything I've learned about building a successful AI consulting business into a comprehensive email course. You'll learn:

• How to price your services based on value, not time

• Proven proposal templates that win high-value clients

• Content creation strategies that attract your ideal clients

• Mindset shifts needed for consulting success

Join the Indie AI Consultant newsletter to get started.

Remember: The AI consulting gold rush is happening now. Every day you wait is a missed opportunity to position yourself as an expert in this booming market.