Unless your spouse is a TV network executive or you have a rich aunt, when you start out as a consultant, you do not have all year to start earning money. Typically, consultants who do not get a project within the first 90 days throw in the towel and start looking for a regular job.
My advice to those of you who really want to make a go of it is to
- go with your strengths
- try to get subcontract work
- watch your cash
- be nice to your "angel."
Go with your strengths
I have found that if someone is magical at doing something, he would really rather be doing something else. To paraphrase Groucho Marx, "I don't care to belong to a club that will accept me as a member."
Let's say that you are the world's greatest sales trainer. Your audiences love you. You carry them to levels of inspiration that others can only dream about. However, you probably dislike being a stand-up trainer and dislike sales audiences even more. I am sure that what you really want to be is an instructional designer or author of e-learning modules, both of which you are mediocre at.
However, please bear with me. When you are just starting out in your own consulting practice, go with what you've got. Be a sales trainer. Teach a few classes. Earn a couple of bucks. Maybe when you have a little money in the bank, you can move on to designing a few sales training courses. After a year or two, you may move on to developing e-learning modules on the sales training topics you know so well. I recommend that you stick to your strengths when you begin your consulting practice and then add products and services that may interest you as time and finances allow.
Get subcontract work
I once read that it takes nine months to a year to be asked to bid on a major consulting contract. That is typically the amount of time it takes from the day you first talk with a training manager, director of training, or human resources manager until the day they call you about a specific project. From that point, it can take several more months until you actually work together. Consulting is a relationship business, and the decision makers of the business are typically very conservative.
If you were not able to adequately prepare to open your consulting practice by networking, speaking, publishing, being active in a professional society, and growing a network of professional contacts, you need to find a way to eat while you jump-start your practice. Many new consultants accomplish this by working as subcontractors for well-established consulting firms. These firms often hire subcontractors to complete parts of projects (for example, developing a design document or writing a workbook) or even completing an entire project. Typically, the contracting firm manages the project, maintains a large amount of the contact with the client, and keeps a healthy share of the money. As a subcontractor, you may be paid a set price for a specific deliverable or service, or you may be paid an hourly or daily rate.
The good news is that if you are even somewhat connected to the professional community, it should be easy for you to pick up a subcontract within the first month or two that you are out on your own. You won't have to worry about being paid, because the contracting organization usually pays you fairly quickly, regardless of when the client pays them.
Subcontracting is an especially easy way to get started if you have already been certified by an established training company (such as the American Management Association) to present its courses. These companies often receive requests they cannot fulfill using their own internal capabilities, and they are happy to point their clients in the direction of a competent and certified resource.
The only bad news in working as a subcontractor is you will make less money, get less satisfaction, and will not get to retain the business relationship with the client.
- Subcontractors typically earn half of what they could earn by working directly with their own clients.
- Since the contracting organization manages the project and handles most of the client contact, you may miss the client interaction and often need to live with someone else's decisions.
- Finally, the contracting organization owns the client, and you cannot market yourself to them. If fact, most contracting organizations will make you sign an agreement that prohibits you from doing business with their clients for at least one year.
When you are looking at your monthly bills and the negative balance in your checking account, the ability to quickly earn several hundred bucks a day does not seem half bad. The downside is if you get caught up doing too much subcontracting work, you'll never get your own practice off the ground and truly work for yourself.
You can usually gather a listing of contracting companies that use subcontractors by looking at the advertisements in professional publications or the sponsors listed on professional association websites. I have found that most local professional societies support job boards that list contract assignments in addition to full-time opportunities.
Watch your cash
Unless you have been monetarily blessed, you will face financially challenging times. It is best to hold on to your cash tightly. Sure, you have to invest in yourself. Of course, you need to spend money to make money. However, my recommendation is to put a tight clamp on your personal and business expenses. Wait a while.
Many companies buy lists of new businesses, because they know you are easy prey. They will be calling to sell you computer systems, copiers, postage meters, and office furniture. They will tell you that all these gadgets are necessary to gain an advantage over the competition and to make you look professional. Bite your tongue and pinch yourself 10 times before you spend a penny - your money is very precious now.
Be nice to your "angel"
An "angel" could be a spouse, parent, or well-to-do relative or friend who provides you with financial, as well as emotional, support while you are building your consulting practice. Some consultants are fortunate enough to have a couple of "angels."
Whatever it takes: Be good to your angel. That could mean calling a few times a month. It could mean sending copies of articles you have written or press releases of speeches you have made. You could even include them in the acknowledgments of your first book. Maybe you could take your angel to dinner occasionally, wash the dishes, or take the kids to the park on a Saturday morning so he can sleep in, shop for clothes, or play golf. Perhaps you should just send a kind note - or simply say thank you.
Note: This article is excerpted from Consulting Basics by Joel Gendelman.
Joel Gendelman opened his consulting practice more than 20 years ago. Future Technologies develops training programs and presents workshops for some of the finest corporations and organizations in the world. Gendelman is an active and widely published consultant, has been on the editorial board of a major professional magazine, held board positions on prestigious local and national professional organizations, published more than 50 articles and 3 books, and holds numerous industry and professional awards; consulting-mentor.com.
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