Let’s say you’re an expert in a field but got laid off from your job. Or you have skills but can’t find permanent work that pays enough. It may be time to become a self-employed consultant. Consulting is a great way to own your own small business. I know, because I was a consultant for over a decade.
One-person businesses are by far the largest category of small businesses. Of the more than 30 million US businesses in 2012, 22.7 million of them were solo shops. A large chunk of those are consultants.
Consultants work in fields including health care, software, engineering, accounting, law, design, and management consulting. Sometimes they provide only expertise and advice; other times, they perform specific work that might otherwise be done by the client’s employees. They typically set most of their working conditions (hours, location), provide their equipment, and work without supervision.
There’s a reason being a consultant is a popular choice for entrepreneurs; consulting offers many advantages.
Generally, it’s relatively easy and inexpensive way to start. With the exception of certain service businesses (such as medical or accounting) requiring special certification, equipment, or advanced training, it’s possible to begin with just business cards and space on your dining room table.
But if you want to make a good living as a consultant, you’ll have to do more than print up business cards. The most successful contractors make it look easy, but don’t be misled when you see them leisurely drinking coffee at Starbucks at 11 am. They were likely up late finishing a project or may have already attended a 7 am networking group to drum up business.
Most successful consultants approach their business as a business. They might be their company’s only employee, but that company still requires the same commitment, planning, financial management, and marketing as any other type of venture.
Once you’ve launched your consulting business, you have to become the company’s main “salesperson.” And the product you’re selling is “you.” That can be tough and uncomfortable. You have to learn to “toot your own horn,” but do so in a way that doesn’t make you feel awkward—or put people off.
Some tips on how to do this:
* Compile a list of three to five benefits that you offer clients and practice saying them without awkwardness. Note that benefits are different from the actual products or services that you provide. For example, rather than just saying, “I design book covers,” you could say, “I create compelling book designs that help you sell more copies than you otherwise would, at a price that’s half of what you’d pay if you did it in house.”
* When meeting with prospects, recount other successes, even if you had them as an employee. Talk about what you’ve done for others, and you’ll effectively communicate what you can do for prospective clients.
* Get testimonials from previous clients and put them on your website and other marketing collateral.
* Bring friends with you when you go to a networking event, and allow them to brag about you to others instead of doing it yourself.
* Above all, don’t put down competitors! That only makes you look petty.
As a consultant, it’s important to develop a template of a letter of agreement or contract to use with clients. You may want to have an attorney help you develop or review this standard template. But don’t make it too intimidating to clients. If you work with large corporations, they’ll probably have their own contracts.
Your agreement or contract needs to:
* Spell out the nature of the work you’ll perform
* Define the “deliverables,” or what work you’ll exactly produce for the client
* Lay out what will happen should the scope of the work change in some way
* Detail exactly how much you’ll be paid and who will pay for any expenses
* Specify how and when you’ll be paid and what happens if payment is not received in a timely fashion
* Describe the terms under which the contract can be ended
* Explicitly state who owns the rights to the work
Consultants rarely have consistent, recurring income – and that can be challenging. But the upsides of consulting are compelling if you’re willing to work hard and keep marketing.