How do you start an AI consulting agency business in 2027?

Startup costs: Low — $2K-$8K. Laptop, Anthropic/OpenAI API credits ($100-$500/mo), LinkedIn Premium ($80/mo), website ($30/mo), domain ($15/yr), basic LLC + accounting. No office, no inventory.

LLC / contracts / insurance: Single-member LLC ($50-$500 state-dependent). E&O insurance is the one most consultants skip and regret — $600-$2K/yr. MSA + SOW template (have a lawyer review once, ~$500-$1.5K). NDA template free. Add an AI-output disclaimer clause: you're not liable for hallucinations the client deploys without review.

Customer acquisition: LinkedIn is the channel in 2027 — post case studies 3-5x/wk, DM warm connections. Cold email to mid-market ops/marketing leaders ($25M-$250M revenue) converts ~1-3%. Speak at one industry meetup/quarter. Referrals become ~50% of pipeline by month 9 if early work is good.

Revenue model: Mix of project ($8K-$40K, 4-8wk implementations) and retainer ($3K-$15K/mo for ongoing optimization, model swaps, prompt iteration). Avoid hourly — clients cap your upside.

Year-1 reality: $60K-$180K solo, $150K-$400K with a junior. Most of year 1 is unpaid sales motion. The tech is easy; finding buyers who'll pay >$10K is the hard part.

Honest take: market is crowded with people who watched a YouTube video. Differentiate with a vertical (legal, healthcare ops, B2B sales) or a function (RAG, eval pipelines, agent orchestration). Generalists starve.