Are you experienced, talented, and have a unique skillset that any organization would love to acquire? Would you rather work for yourself than someone else? Then you may want to consider becoming a consultant.
Fortunately, you’re not alone.
Consulting is a business that’s on the rise for both clients and the self-employed. In fact, research conducted by Source Information Services discovered that 42% of clients surveyed planned to bring in more consultants in the near future.
If being a consultant is starting to look more and more like a promising career path, then here is a guide to help you get started.
A consultant is simply an individual who provides expert advice for a fee. Since consultants usually are employed in an advisory capacity they are not held accountable for the outcome of a project.
Depending on the industry, job duties will vary for consultants. In most case though, consultants are hired to improve or fix a specific component of a client’s business that they are speclificiazed in. Consultants also share advice, make recommendations, and solve any problems within an organization. For example, an IT consultant may be called in to teach employees how to correctly use a new computer computer that was recently installed and how to troubleshoot any issues with the software.
In most cases, consultants are used before and during the launch of a business. But, consultants can also be used when a business needs to reorganize or rebrand itself. Consultants will be retained until the goals of a business have been achieved. Because of this, the time period for the consultant’s services will vary.
Besides education or work experience, a consultant can be successful by possessing the following the traits:
Organizations usually look for consultants who are either highly educated or have years of experience in their field. As a whole, consultants are not required to have a college degree. If you’re looking to join a consulting firm though, having a college degree from a top university will definitely help you gain an advantage from other applicants.
Even if you don’t have a college education your years of experience in your respective field can be just as attractive to consulting firms or potential clients. However, if it is required that you have a degree, certification, or just need to brush-up on your skills you can self-study by taking online classes on Coursera, Udemy, or edX. You can also attend a class either online or in-person of any accredited university of your choice if they offer a degree program in your field. Depending on your area of expertise, you may need to have take a class so that you can have the right certifications or keep up-to-date with the latest trends and changes.
If you start your own consulting firm or are a freelancer, it’s important that you know the difference between being a consultant and a contractor.
Additionally, according to project manager Rosalind Baker, the main differences between consultants and contractors also include:
Knowing the difference between the two is important for you and clients because:
Figuring out which type of consulting services you’ll provide can be relatively easy to figure out. Just like any other small business owner, you can start your business based on what you’re passionate about, what expertise you have, or what you would like to start doing.
While that may sound easy enough, if you focus on part of a market, which is a niche, you’ll have a better time at finding success as a consultant. For example, you’ve decided to share your experience from working at home. That sounds broad at first, but you could narrow that down to become a home office design consultant. You could continue to narrow that down to location since you’ll most likely have to visit the home. If you live in Boston, then you would want to market your services to Bostonian's who work from home.
The benefits of narrowing down your niche include:
How do you go about finding your niche? Consider answering the following questions to guide you along:
If you’re having a difficult time narrowing down your niche, you can always do some keyword research to help you determine your niche.
If you’re unfamiliar with keywords, they are the specific word (or phrase) that an individual is searching on Google or Bing to find information on exactly what they want to read, watch, download, or buy. Consultants can use keywords to see which markets are in-demand and what the competition is like by taking a look at how many people have visited a website. Thankfully there are tools from Google AdWords, WordStream, and Market Samurai that can help you with your keyword research.
And, when it comes time to start marketing and promoting your consulting business, you’ll already have the keywords and tools needed to make content that will attract customers.
Still need help identifying your niche? Here’s a list of the consulting jobs, courtesy of Entrepreneur, that you can use to start brainstorming ideas for your consulting business.
Consulting, as with any other freelancer, may not involve the same amount of paperwork that other business owners have to fill-out. However, consultants are still business owners. As SBA.gov points out, this means that “you need to be sure you have the right licenses or permits, make estimated tax payments on time, report your earnings each year, and deal with client paperwork such as contracts, non-disclosure agreements, and more.”
Prior to working with any clients, make sure that your business is legally set-up by fulfilling these obligations:
As a freelancing consultant, you’ll also need the day-to-day documentation and paperwork like:
As a consultant you have to remember to brand your business in order to attract new customers - which requires more than just a logo. A brand, according to Seth Godin, “is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business, a buyer, a voter or a donor) doesn’t pay a premium, make a selection or spread the word, then no brand value exists for that consumer.”
When it comes to developing your brand, here are some questions that you should answer:
Once you determine what your brand is going to be all about, you need to figure out what sets you apart from other consultants in your niche. In other words, what value will you bring to the marketplace? If you’re a great teacher as an IT consultant, then you may want to use that skill as a selling point when approaching potential clients since you can effectively teach their employees how to operate new software.
Once you’ve determined what makes your brand unique, you need to make sure that it’s reflected through:
Also make sure that your brand is consistent. This means having the same logo or color pattern on your website, social media channels, business cards, and invoices. Consistency also means delivering high-quality content on a frequent basis.
Finally, don’t hesitate to give your brand an overhaul from time-to-time. This means updating your logo if it doesn’t match your brand and staying current with the changes in your industry.
When it comes to marketing and promoting yourself as a consultant, you’re not necessarily placing an ad in a local newspaper. Instead, you’re looking for ways to prove that you’re a leading authority figure in your industry. And, you can achieve that by creating content that is valuable to your potential customers.
Content can come in a number of different forms. It could be through a daily blog post, publishing a book, creating an infographic,or hosting a webinar or podcast. The idea is that you need to create content that not only proves that you’re a thought leader in your industry, but also is going to be shared. This will build your brand and get clients to notice you notice you.
Creating content is just the beginning though. You need to have a strong online presence to share and interact with your audience. This starts with a website that includes a description of services, your past experience, testimonials from clients, and contact information. You can purchase a domain name from GoDaddy for just $2.99.
On top of your website, you online presence should also include a blog to publish content. WordPress, SquareSpace, and Blogger are a couple of recommendations. Don’t forget to include a portfolio as well that illustrates your previous work. If you not in a creative field, you could provide case studies on your past success. You’ll also need to be on social media by creating profiles on Facebook, Twitter, or LinkedIn. This gives you a chance to share your content or thoughts, exchange ideas, or connect with other influencers.
Other proven methods of marketing and promoting your consulting services are:
Marketing and promoting your services will only take you so far. When you don’t have clients approaching you about work, you will have to take the initiative to find work on your own. Thankfully, there a number of websites available where consultants can find work.
While the websites listed above are great places to find work, consultants should also look at their established network. Whether it’s friends, family, college roommates, former colleagues, or your accountant, one of the easiest, and most effective, ways to find work is using your current network to find work.
Also, don’t forget to ask your previous clients for referrals. Word of mouth will be one of the best ways to attract new customers.
Congratulations! You just landed a no client. What are you going to do to make sure that you retain their services?
Neil Patel, who used to consulting prior to finding success with Quicksprout, reminds us that consulting has a high churn rate. But, if you follow his advice, you’ll increase your chances of keeping them for longer.
Another tip from Neil is one that you’ve most likely heard numerous times before; you have to dress to impress. If you walk into a meeting wearing a pair of worn-out jeans and a hoodie, do you honestly think that the client is willing to hire you? Even if you are the most knowledgeable consultant that is being considered, you’ll probably miss out if the other consultants are wearing suits. Why? Because they come across as a professional who knows what they are talking about and should be taken seriously.
Neil states that once he began to dress to impress, he was able to charge more money, have potential clients listen to him, and even having individuals come up to him during conferences.
While you are getting paid for your services, you always have to remember that you were hired because you possess a set of skills that the client does not. In other words, don’t let a client tell you how to do your job. That doesn’t mean that you can do whatever you want, it means that you have a responsibility to what’s best for the client. But, you’re the expert and they’re not. To keep them satisfied, make sure that you keep them update with your progress and show them reports.
There are other instances of when you may have to fire a client. For example, you may have a client that you get along with personally, but they never pay you on time. Even after you’ve brought this to their attention, they continue missing the due date. If you don’t want to do damage to your cash flow, you’re going to have let that client go and move on to someone who does pay you on-time.
To avoid potential headache clients, ask any in your network if they have worked with them in the past. Or, just Google their name or business and see what comes up. Does their website look fishy? Are there complaints about them of message boards? Did they leave an inappropriate Facebook status bad mouthing their ex? Look for any red flags prior to working with a client - also do the same on your end.
No matter if you have the same candidate for years, have had to let them go, or can’t accept a project because you don’t have the time or experience, you should always have the best interest of the client in mind. While you may have have disagreements or face roadblocks, you have to be a professional. If you fire a client, refer them to another consultant.
One of the most difficult tasks that independent consultants must handle is managing their time and projects. Besides being disciplined because you’re essentially working from home and can create your own schedule, you’re also at the mercy of your customers. This can be a problem because your clients don’t care how much work you have as long as you get their project done when they need it. And, because you don’t want to run into a situation where your work dries up, you keep taking on more and more projects.
Because you’re juggling multiple clients, projects, and deadlines, how can you manage everything and still be productive?
For starters, you may have to decide whether or not you want to live that lifestyle. If you don’t mind working that much and like bringing in the money, you can take on as many clients as you like. If you do run into any roadblocks that prevents you from completing a project, be honest with the client and explain the situation.
To help make you more productive and manage your time more efficiently, you can also try using some of these powerful project management tools:
If you ever do get overwhelmed, you may want to consider outsourcing some work. You can use some of those same freelancing sites, like Upwork, to find an assistant or another consultant looking for work to help lessen the burden.
One of the most common, and important, questions that consultants ask is how much money do they make? If you have a salaried position, a consultant could make anywhere between $28,000 to $131,000 - depending on what area of consulting you focus on. If you’re out on your own, you the short answer, according to Stephen J. Freidl, would be a mix of "whatever the market will bear" and "how busy you wish to be.” However, it’s not uncommon for consultants to work by the hour, on a retainer, or by fixed-project rates.
Before you decide on a rate, it wouldn’t hurt to do a little research and find out what other consultants are charging. The easiest way to go about this is seeing if they have prices listed on their website or asking for a brochure. You could even ask clients or fellow consultants at industry events what the normal rate is for consultants or take a like at sites like Careers-in-Business. This should help you establish a rate that will be competitive. If you’re just starting out though you may want to consider having lower rates until you have some more experience under your belt.
Another task to accomplish before you set your fees is to list all of your expenses. This will also give you a better understanding of how much money you’ll have to charge so that you can pay all of your bills and have a little something leftover. The last thing that you want is to have a rate so low that you can’t pay for overhead like insurance, rent, utilities, or office supplies. For example, if your total expenses are $3,500 per month, then at least you know that’s the minimum amount you have to bring in.
After you’ve checked out the marketplace and taken a closer look at your expenses, it’s time to settle on a hourly, retainer, or project rate for your services.
Hourly fees can get a bit tricky. Either the rate can be so high that clients won’t be able to afford you or because the rate is low you won’t be taken seriously.
Since you already listed your expenses, you could add that and your salary together (your salary could what you previously earned or what your competitors are charging), multiple that figure by a 10% or 20% profit margin, and divide that figure by your billable hours to determine your hourly rate. However you determine your hourly rate, it’s pretty normal for consultants to double that figure so that they can cover their overhead.
Just remember, if your hourly rate is higher than most other consultants, then the clients who hire you except you to be worth every dollar.
This type of payment is a monthly fee, which averages around $3,500 per month, that you and the client agree on. The catch? You have to be on-call for the client for a specified amount of time each month - which can be rolled over into the following. This is a common form of payment for consultants since it gives the client access to the consultant whenever they’re needed. And, consultants like this form of payment since it is a steady stream of monthly income.
The only drawback is that you’ll most likely have a clause in your contract that prevents you from taking on additional jobs from competitors.
If you’re just starting out, project rates may be difficult to determine at first since you may not know how long projects take and how much your hourly rate is. Once you do figure this figure out, you can add 10% to your monthly rate. But, if you do decide to go with a project rate, just know that this is a fixed amount that you’ll be paid for a specified amount of time, which is usually paid monthly.
At some point you will have to raise your rates. This can be uncomfortable if you have a solid rapport with current customers. But, if you’re great at your job, you customers will realize that you’re in demand and that’s why you have to raise your rates. When you do raise your rates, give your customers plenty of notice, at least one billing cycle, and should be modest.
Also remember that you can have different rates for different customers. For example, your longstanding customers, aka your bread and butter, should be charged lower rates then the client you just acquired last week.
After you have set your rates and have clients lined up, it’s time for you to get paid for your consulting services by sending your clients an invoice. An invoice, also known simply as a bill, is important because it’s how you’re going to paid what you’re owed by a client for the work that you just completed.
While invoices can vary from person to person and industry to industry, they typically include:
Even if your invoices contain the components listed above, you’ll want to create a more professional invoice that will help you stand out from the other invoices piling up on your client's desk. And, that will probably improve your chances of getting on time.
Creating professional invoices is just one part of getting paid for your services. You also have to ensure that you’ll get paid each and every time that an invoice due date approaches.
There are two final points that you should keep in mind when it comes to invoicing. Number one; don’t continue working for a client if they don’t pay you. You could use that time working for a client who does pay their bill. Number two; if there is any intellectual properties involved, such as copy or software, that will belong to the client. However, you should hold onto the property until they have the invoice in full.
Despite all of the planning and experience, there will be times when things will go wrong. This is especially true if you’re just starting out as a consultant. If that’s the case, you may want to consider finding a mentor.
A mentor is someone who has the experience to know what has worked and what hasn’t for their consulting business. Because of this, you can exchange ideas with a mentor, along with receiving advice, feedback, and an objective point of view.
You can find mentors by asking your professional network, reaching out to an industry leader, or even hiring a mentor - which is pretty much what you, as an consultant.
Of course, mentors aren’t the only individuals you may have to seek advice from. When starting out you may need to seek the advice from accountants and attorneys if you need financial or legal assistance. This will ensure that you can get your business properly established and maintained, along without having to worrying about being penalized.
In short, you’re not an expert at everything. If you aren’t familiar with something that is outside of your field don’t hesitate to seek the advice from an expert.
If you have any further questions regarding consulting, you should turn to the resources listed below: