When I decided to leave corporate America,I wanted more freedom. But I liked the idea of keeping contact with that world I had come to know and love. Consulting was a fit for me. I set my own schedule, and determine what I am worth, while still having the opportunity to occasionally, “embed” myself in corporate culture as onsite consultant.
If you’re considering the switch, here are some things to consider.
In addition to your current savings, you need to build up a reserve. How much depends on what you have been living on. In most cases, six months to a year of expenses will allow you to get to the place that you have enough clients to survive. Personally, having two years of savings is the best case scenario if you can swing it. It really gives you time to understand your strengths and plan for those income gaps when a contract ends or a client moves on somewhere new.
Become an Expert
You don’t have to be the expert, but you do need to establish some expertise that is recognized in your field of endeavor. There are several ways to do this. A combination of the following is best.
- Gain recognition in the media for doing what you do.
- Write a book that sells well enough to prove your expertise.
- Develop proprietary processes and prove them in the real world.
- Earn degrees, certifications and other credentials.
- Start a business blog and write frequently.
There are other ways to establish this expertise and what clients are looking for, varies.
Learn the side hustle
Taking on side consulting projects before giving up a regular job is a great way to gain experience and build up valuable references and referrals. It will also give you an idea of what to expect in pay and how your services will work. The majority of consultants and freelancers are building their business on the side. Let your employer know and make sure you are not violating your own contract.
Find out what it pays
There is a myth that all consultants make the big bucks. It’s true that some do, but like most businesses the vast majority are earning a living, just like everyone else. Interview other consultants, study industry trends and talk to potential clients about what they pay. Network with your peers just as much as you would with business prospects. Not all fields are ripe for consultants. Know what to expect.
Dreams vs. Needs
You have to be realistic. Even if your dream consulting gigs could easily pay for the mansion on a hill and the chauffeured limousine, you may have to settle for a nice apartment and a good used Honda to get started. Make sure you meet your actual needs while working toward those dreams you want some day. Knowing the difference between the two can keep you from unrealistic expectations.
Businesses have peaks and valleys
It would be nice if it was all up, up, up, but it’s not. Business is seasonal or even cyclical, even a good economy hits bumps and no client is really a lifetime guarantee. Be prepared to go through lean times by continuing to save, especially when things are good, so you can survive the valleys without giving up.
Build a client pipeline
Through your side hustle, it’s important to begin making connections. It’s rare that a consulting client calls one day and writes you a check the next. It takes time to build and pitch services and for companies to allot resources to make sure your consulting doesn’t go to waste. A pipeline is made up of new connections, those who are ready to start and everyone in between.
Make the leap
Once you have prepared your nest egg, know what to expect, have gotten your feet wet and have some prospects in your pipeline, it’s time. For many, this is the hardest part. While a well-run consultancy can be more stable than a corporate job, it’s hard to imagine that at first. Set a date for yourself, inform your employer and find someone to hold your hand as you take the leap. It’s a leap I have questioned, but never regretted.