Friday, February 6, 2009

Starting a Consulting Business

Are you on the chopping block? Already been chopped? Or are you just tired of working for The Man?

 If so, you may be thinking about starting a consultancy. Here's how:

Sure, if you have great expertise in a high-demand area, consult in what you know about.  

But if your expertise isn't that strong or demand for it is low, you can still establish a successful consultancy. (See below for ideas.)  Like the big consultancy firms do, get the consulting assignment and then hire a contractor(s) with the technical expertise to do the job. 

By subcontracting with a technical expert(s), you may need only  enough expertise to get, not implement, the consulting contract.  Here's how:

1. Do the equivalent of a term paper's worth of research in the area so you know enough lingo and key issues to get a meeting with prospective clients.

2. With or without an introduction from someone in your network, contact 50 potential clients. The model I usually recommend is:
  • Call to say you'll be sending an email with a link to your site.
  • Email that link and a request to meet with them to discuss if and how you might solve a problem for them.
  • Call to follow up. Your goal is learn about what, specifically, they might like you to do and to set an appointment for a subsequent meeting in which you'll bring a technical expert(s) to discuss details.
  •  If there's no response, call once more.
2. Live or via phone or even webcam, bring the aforementioned technical expert(s) to your meeting. 

3. Pricing your consulting assignments: Charge a flat fee (with clearly defined parameters of what that will include) that will ensure that you and your technical person(s) are well paid yet still provides excellent value for the client.

What to consult in:

Pick a consulting area that meets as many of these criteria as possible: 
  • in-demand
  • is complex and technical (If it's easy, most of your potential clients would do it in-house.)
  • will yield the client high return-on-investment
  • is in an Obama priority area (for example, financial regulation, alternative energy, inner city education, health care for low income people, illegal immigrants).  This link shows you how to become a federal contractor. 
  • meets a new government mandate.
  • involves China (for example, manufacturing, import, export).
  • you have considerable expertise
Finally, do a great job. Too often, consultants, especially in their early, hungry stages, focus only on getting the next consulting gig.  The successful consultant is excellent both at marketing and in providing the consulting service. 

3 comments:

Jeff Shore said...

When I first started my consultancy Marty gave me this advice: "Jeff, you only need to focus on two things- 1) Get new business. 2) Take exceedingly good care of the business you have." Ten years later the strategy still works.

Thanks, Marty!

Individual Coaching said...

As Warren Buffet says, “rule no.1: never lose money, rule no.2: Never forget rule No.1”. This is much like saying never lose pace and be steadfast with your aim. Furthermore, you need money to start a business and still need money to sustain it. Prince Alwaleed Bin Talal Alsaud added, “If I'm going to do something, I do it spectacularly or I don't do it at all”. If you want to succeed, you must give your best shot. And of course, don't forget the guidelines given in the article.

Greg said...

Nice article! One thing I found that sidetracks a lot of aspiring consultants (myself included, when I first started my consulting business) is fear: fear of failing, fear of the unknown, fear of not knowing where to start, etc. The best thing to do is to start somewhere, and do something each day. Your momentum and motivation will snowball as you see your progress. More info & tips at www.StartMyConsultingBusiness.com.

I'll be releasing a free step-by-step guide called "Create A Professional Business Website For $100" soon, so sign up for blog updates to make sure you don't miss it.

 

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