After contracting for a while and being involved in delivering services to your clients, you might wish to go consider moving into consulting. As we saw in Part I that consulting is more about guiding and helping clients, sharing your expertise and enabling change so they can become more effective.
So, what is the consulting approach?
The consulting approach
Consulting requires a different approach to working with clients and a different model of engagement to suit that style of working.
Consultants usually work with several clients in parallel, and spend a few days each month with each client. They’re rarely needed 5 days a week.
As a result, a good deal more flexibility is required, and consultants are subject to a good deal more uncertainty as to when and where they’ll be working. Some weeks they may be fully utilised, other weeks they may be doing nothing – at least, nothing they could bill someone for.
In order to respond to clients ad hoc demands, some slack needs to be built into a consultant’s schedule, leaving days free for those last minute requests. If you can’t meet a client for 3 months because you’re too busy, you’ll almost certainly find that they’ll take their business elsewhere, and after those 3 months you may end up with no work at all.
This is very different to how contracting works. Contractors are 100% utilised by one client for long periods of time. As much as you’d love to, you can’t do any work for client X while you’re under contract to client Y.
Contractors are effectively serial monogamists, lining up a new marriage as the current marriage draws to an end. The trick to making a good living as contractor is to ensure you never end up single and on the shelf. This works for the majority of contractors, who prefer to put all their efforts into one client relationship at a time.
Consultants have to manage several relationships, and balance the needs of a group of clients to try to make sure everybody gets what they want. The advantage of this model is that it’s less likely that you’ll end up with no income at all.
Disadvantages of consulting
The main disadvantages to consulting are:
- More effort: It takes much more effort to manage multiple clients.
- Uncertainty: Never knowing far in advance how much work you’re going to have.
- Account management: Managing the expectations of multiple clients can be tricky
- Getting paid: With lots of one off assignments, chasing payment can be a pain.
- Finding work: Agencies aren't overly interested in short assignments, so you are on your own.
- Busy clients: Busy clients sometimes book you for 2-3 days and then none of their staff are free to see you.
These don't have to be considered disadvantages, but just hurdles to overcome. Building a online profile and personal brand is essential to keep the pipeline of work busy. This won't happen overnight, and can take years. Networking is personal marketing is how you will find work. Agencies won't be overly interested because you will charge too much - the ones that are will put a huge margin on top, which then makes you uncompetitive compared to other consultants they can hire directly.
Getting paid can be a pain, as many large clients pay 30 or 60 days later. For some consultants the best approach, if they are in high demand, is to ask for money up front. This can also be a great litmus test to check the client is serious about hiring you.
Clients who do not plan well can sometimes find that the consultant turns up expecting to train a 5 staff, and none of them are available, or only a few are. Then they might try to reschedule at the last minute, which doesn't help you. This is where money-up-front can help - alongside contract terms that make it clear that refunds are not available if they try and reschedule.
If you are new to consulting then, just like being new to contracting, you may learn some hard lessons at the start, but eventually everything will run relatively smoothly.
Forecasting & planning
The key to lucrative consulting is forecasting.
Whereas a contractor has certainty for a 6 or 12 month period when they start a contract, a consultant probably doesn’t know exactly how much business they’ll be doing beyond the next month or two.
It is difficult for consultants to plan further ahead than a few months and remain responsive to their clients emerging needs. The problem with being an agent of change is that things change!
You need to work smarter and be adaptable, operating more like a traditional business than most contractors are used to.
You need a basic business plan outlining:
- how much you are going to make?
- where the money might come from?
- Your marketing and sales process.
Winning business as a consultant takes longer, and converting prospects into customers is much tougher.
For contractors, marketing and sales is minimal, consisting of a CV and approaching agents who have already spent the time and effort building client relationships. By the time you’re sitting in front of a prospective client, much of the sales and marketing has already been done on your behalf.
As a consultant, you are less sheltered from the winds of the consulting market. It’s for this reason that many contractors who would probably have much to offer as consultants decide not to take the plunge (or, quite often, take the plunge and then decide that it was a bad idea…)
In Part III we will provide some tips for entering the consulting market.