Consulting is one of the hottest businesses that could provide you with both flexibility – and money – today. If you have expertise and skills that others may be willing to pay for, starting a consulting business may be your way towards financial independence.
Companies are increasingly outsourcing services and expertise no longer available from their own staff, bringing in consultants to help fill in the gaps. Consultants have become so in-demand as people in business, health care, education, government, and other fields are calling on specialists to provide answers to ever-growing complex problems.
>> RELATED: How to Start a Successful Consulting Business
However, establishing and maintaining a consulting practice is not easy; rather, is a constant process of self-marketing. Strong expertise and solid reputation do not guarantee success in the consulting business. Never make the mistake in believing that your reputation can sell itself on auto-pilot mode and that you can simply sit and wait for work. As a consultant, you need to aggressively sell your product – you!
Here are several major steps that show how anyone can turn knowledge and experience into a profitable consulting business.
Forge harmonious working relationship with the client.
It’s the mantra of the ’90s business professional: build relationships that last beyond the initial sale. From the start of the relationship, clarify expectations from the assignment: describe what you do in specific terms and specify what benefits the client will obtain. Clients have high expectations of consultants hired for their expertise or specific skills.
>> RELATED: How to Sell Consulting Services
If you are capable of producing the quality of work that you believe customers will continue coming back for, then consulting may be for you. Furthermore, don’t expend a lot of energy if it looks like you’ll make only one sale; spending too much time with this kind of one-shot deal can blow a whole year of sales with another potential client.
Clearly state your objectives and strategies.
As a consultant, you’ll be expected to solve some problems of a fairly large nature. You need to be as clear as possible in your proposal as to what you’ll be providing for the price you’re asking. Be forceful in describing the advantages the client will enjoy in dealing with you. How else can a company determine whether you’re worth it? Always remind the client in your proposal of why they need you in the first place. The reader must weigh the cost of your service against the benefits he/she will reap. Help him/her decide with numbers, i.e., “Increase Productivity by 300%.”
Present a polished, professional image.
You are in the image business, and your clients’ perceptions of you are what ultimately bring in the sale. The best way to attract new clients is to be recognized as an expert in your field or industry. Present yourself as an expert with marketable skills based on a combination of knowledge and education in your field and years of experience in your industry.
>> RELATED: How to Make Your Consulting Services Stand Out
Clients are willing to pay a premium for these skills because they are rare. They need to see you as successful, in demand, and of the highest quality there is — so make sure all of your materials, from business cards to sample videos, convey the image of an expert whose knowledge they can benefit from.
Don’t be afraid to offer free, introductory sessions when you need to.
So often, consultants get caught up in thinking that every hour should be a billable one. They fail to see the merits of giving away their services. Being a consultant doesn’t mean the meter should always be running. This is especially true if you are just starting out. Keep in mind that you need to build awareness of your services before you can sell folks on them. Unless you are able to connect your knowledge and experience to the needs of a contact you currently have, it may be awhile before you get your first assignment. The best way to get them interested is to hold a free information seminar once every quarter or so. Speaking to association groups and non-profits for free or a fraction of your normal fee could likewise provide valuable exposure and referrals.
Charge by the hour, not by the job.
Your consultancy rate depends on several factors such as level of experience, type of industry and size of the contracting firm, the ongoing rate of your competition, financial need, type of work involved, and the present economic conditions. Avoid the trap that many consultants make — underestimating the number of hours a job will take. Even if you have an hourly rate of $100 per hour, for example, make sure that you include estimates of additional hours that you might probably use for the project. Since consultants are only paid for the time spent on a client’s project, build into your fees enough money to cover overhead, the time you invest in marketing, taking care of administrative tasks like billing, and so on, as well as your own time off. Never discount the value of your own time.
Update your client list regularly.
Generate as much new business as you can handle, using your own personal Rolodex, referrals from associates, networking, advertising, participation from trade associations and registries, and even cold-calling potential new clients. You may ask the client for referrals, let him know that you are proud of the job you are doing for him. You can also use the assignment to network with competitors, suppliers, and customers to find next assignment. At least once per year, it is advisable to evaluate your client portfolio and remove those that generate only a tiny portion of your annual income. To be profitable, you need to focus on the bigger accounts. Be on a constant lookout for bigger clients.
>> RELATED: How to Become a Management Consultant
Learn more about industry and players so can expand your target universe. But most important of all, you must always exercise the freedom to take on those assignments you feel are stimulating and rewarding – and the option of walking away from opportunities you don’t intrinsically enjoy. After all, your main goal should be to enjoy what you are doing.
Remember to follow up with every client.
As a consultant, your job is never ending; once you sign on as an expert, you remain one for life (or until you make a mistake). Be certain that the end result of the assignment is what both you and client expected. After the satisfactory completion of the project, your first task should always be to scope out a series of follow-up assignments for the same client. You have to create the need for your services.
A consulting business is a great way to make a living. This is the business where you get paid for your expertise while offering you the ability to enjoy the freedom and independence of doing your own thing. With the right skills and temperament to run your own consulting practice, and the willingness to do your homework up-front, a consulting business is a potentially satisfying and lucrative form of self-employment.
Recommended Books on How to be a Consultant and Start a Successful Consulting Business:
- The Consulting Bible: Everything You Need to Know to Create and Expand a Seven-Figure Consulting Practice
- Getting Started in Consulting
- The Consultant’s Manual: A Complete Guide to Building a Successful Consulting Practice
- Million Dollar Consulting
- Million Dollar Consulting (TM) Toolkit: Step-By-Step Guidance, Checklists, Templates and Samples from “The Million Dollar Consultant”
- How to Start a Successful Consulting Business
- 10 Questions to Ask Before Hiring a Consultant
- How to Become a Management Consultant
- How to Make Your Consulting Services Stand Out
- Knowledge Management 101