The old pattern of going from a full time career to 100% leisure is less common today. Currently, the pattern is that you leave your day job (voluntarily or otherwise), but you don’t retire. You become a consultant.
How to become a consultant? This question may occur to us after many years in a position that is no longer as exciting as it used to be. It may be thrust upon us by an unplanned job loss before we are ready to retire.
Becoming a consultant may be something we had always wanted to do, but had never quite got the nerve up to take the plunge. We hear of high failure rates and think there are far too many complicated factors to take into account.
If you follow the three simple steps below, you too can set up a successful consulting business. I know because I did it and my company has lasted for over 20 years.
That question is “What good or service can I supply that someone is willing and able to pay for?” If you become a consultant, you will more likely be providing a service rather than a good. Although a lot of us dream of doing something completely different in the second half of our career and lives, it is often easiest to build on our past reputation and sell the experience, knowledge and contacts we have accumulated over the years.
The second half of the question is equally important and often not considered. There may be many who want our expertise, whether it is in tax minimization or to establish an export market, but they may not be able to pay for it, perhaps because they are struggling start-ups themselves. A flexible fee structure including options such as stock in a start-up can help here.
If you are starting a consulting business and not a new hobby, you need customers. That is probably the biggest change in moving from being an employee (however highly paid or professional) to being on your own. You are the rainmaker. There is no pot of money from which you can get paid if you don’t bring it in.
So, before you start consulting, line up at least three paying clients. Then, even if two of them don’t work out, you will still have some income from the third. If you cannot find at least three potential customers, go back to the entrepreneurial question and adjust your potential client base, the service you are offering or, perhaps, your prices.
An exception to getting three clients from the start is if the projects you will be working on are long and lengthy. Engineering, project managing and similar work falls into this category. You could not manage more than one project at a time. So line up that one big project and plan to do it well, but keep up your networking and have in mind other potential sources of work for when the first project ends.
What you do not want to do is to incur lots of expenses before you have any money coming in. Some foolish people who have never run a business before feel they have to rent an office, hire staff and buy equipment so they can be a ‘real’ business. This is nonsense and a fast, easy way to go broke.
For most consulting operations, you need little more than a connected tablet or smart phone. If you want dedicated space to work, a home office is just fine. If you need help on a project, subcontract. That way you will only have money going out when you have the money coming in to pay for it.
Can women succeed starting up businesses, consulting or otherwise? Harvard Business Review says we do better than men. We may not see our companies turn into great big global operations, but few of us want that at this time in our lives. We prefer a comfortable, manageable operation under our own control. Following these three steps that tell how to become a consultant can get us that.
Now, you’re ready for the practical tools to get started. Nancy Keene gives us 5 Essential Tools for the Entrepreneur.