Thousands of professionals have dreamed about starting their own consulting business. It seems like a great career path: Hang a shingle, bring in clients, be your own boss, do awesome stuff and make bank.
Yet consulting, as it turns out, isn’t sexy, glamorous or easy. It’s downright hard — harder than you might think. I encourage anyone with the moxie to start a consulting business. But I also offer cautions — a few “yield” signs that could save you a lot of grief and get you closer to achieving your dreams.
Here’s what you need to know:
You’re going to face cranky people.
Some people can’t handle unpleasant relationships, especially ones in which they get BS or are kicked around. If you’re not ready to face cranky people, then consulting isn’t for you.
Consulting is a face-to-face business. You meet with people. You shake hands. You step into corporate offices. You sit across tables. You talk to people. And some of those people you talk to are just plain mean.
You figure out pretty quickly who is worth working with and who’s not. As you figure it out, you might have to endure some relationships that eat away at you.
Your deliverable is knowledge.
A consultant is hired for one reason: knowledge.
You must assert your knowledge in the niche for which you were hired. Clients select you to work on their behalf because you know something that they don’t.
This means that you tell it to them like it is, and don’t back down. Deliver the knowledge that they pay for. If they don’t like it, so be it. If they disagree, so be it.
Your deliverable is knowledge, and if you deliver it in a half-baked way, you’re losing the quality of your service.
You’re probably not charging enough.
One of the biggest mistakes I see new consultants make is that they don’t charge enough for their service.
Maybe it’s guilt. Maybe it’s inexperience. But maybe they just don’t know how much they should charge. There’s no magic formula for fee-setting, but there is a general rule: Charge more than you think you should.
It’s important to your clients that they get a return on their investment, so this should be important to you, too. If you can prove your ROI, you’ve got the leeway to charge a healthy percentage of the client’s profit.
Remember, the higher your rate, the better you look. If you saw two wristwatches — one for $10 and the other for $5,000, which one would you think superior? Obviously the more expensive watch is, the better a timepiece it is. The same goes for consultants. A consultant whose fees are $100 per hour will be valued far less than a consultant who charges $5,000 per hour.
If you’re expensive, then you’ll be more likely to get the clients who pay expensively. And that’s where you want to be.
You’re selling yourself.
As unpleasant as it may sound, a consultant is selling him or herself. There’s nothing sordid or dirty about this. This is the way business is done in the consulting world.
To successfully sell yourself, here’s what you need to be prepared to do:
- Dress to kill. You’ve got to look as good as the services you provide.
- Put a big price tag on yourself. People associate higher costs with a higher value. The more you charge, the more people will consider you to be valuable.
- Be trustworthy. Trustworthiness is essential in consulting. First off, no one will hire you unless you’re trustworthy. Second, if they do hire you, they won’t take your advice. Trust is what you have to go on.
- Prove your worth. You can’t just look it; you’ve got to actually be it. Give what you promise, and give it well.
- Think of yourself as a valuable brand. The better the brand, the more successful you become. The higher-quality the brand, the better your marketing becomes.
You’re not your own boss.
I don’t know of any industry or occupation where you can essentially “be your own boss” in terms of defining what you do when you do it and how you do it. Whoever gives you money is your boss. When you’re a consultant, that means your clients are in charge. They own your billable hours and they expect results.
Being your own boss extends to your ability to say “no,” discipline yourself to work smart and hard, and demand fair fees. Beyond that, you’ve got to work hard for a bunch of other bosses.