The Complete Guide To Profitable Independent Consulting
The consulting marketplace has been transformed by the move to online systems and the rise of independent consulting platforms. Opportunities for independent consulting have grown exponentially. However, the basic rules for setting up an entrepreneurial business have not changed significantly.
There are myriad guides on how to become an independent consultant. Asking for a guide on how to be profitable takes a bit more thought. While not the complete guide, here are four tips that I believe would make a difference:
1. Identify a Sustainable Market
Consulting is about providing advice and assistance to people who need help to solve a problem. The problem already exists. They have either not been able to solve it independently, want to speed up the process, or want guidance from someone who has been there/done that in the past.
Therefore, the value proposition is that they help people solve their problems. Linked to this is the advice often given to aspirant consultants to find a specific niche in an industry.
Michael Gerber, in his book The E-myth Revisited, shows that many people enter the entrepreneurial world based on what he calls an entrepreneurial spasm. Unfortunately, this spasm also accounts for 96% of entrepreneurial failures.
Unfortunately, it is a delusion that a consulting business can be built on a single opportunity or skill set. You will need to think through your business ideas properly and do some research on the consulting marketplace. Is there a market, it is large enough, and will it pay enough?
As an aside, this is why I am such a fan of the online consulting marketplace and independent consulting platforms. Clients log their problems and their needs. Consultants or aspiring consultants can assess and test their skills and marketability against this existing market.
Work On Your Business, Not Just In Your Business
Being successful in the consulting marketplace takes a shift from being focused on day-to-day delivery to clients. However, you must give attention also to growing the business, finding new clients, and finding innovative ways to stand out from the competition.
To again quote Michael Gerber and his book E-Myth Revisited, entrepreneurs should work on their businesses, and not just in them.
Freelance consulting tends to be a one-person operation, and, particularly in the beginning, this means that you do everything. You can be very busy completing projects, writing reports, and doing the billing. However, to build a profitable independent consulting business requires that you spend up to 50% of your time in marketing.
Marketing includes networking, calling potential clients, putting in bids and proposals, maintaining an online presence, and developing a repeatable system for attracting and converting clients.
Some people find this aspect of consulting daunting. The advice in the past was that if they didn’t like it, they should reconsider whether they were cut out for independence.
The online consulting marketplace has changed much of this.
Today, new consultants can register on freelance consulting platforms. They will still have to market themselves and bid for work, but much of the task of finding potential clients has been done by the platform itself. A platform such as Consultport attracts suitable clients and pre-screens both clients and consultants, and matches them for projects. Besides, they have a professionally run website to showcase your profile and past successes. They will even manage the contracting and payment side of your business.
This is an incredible resource for freelance consultants.
Develop the Right Attitudes
Independent consulting is not for the mentally fragile.
There are some hard truths in the consulting marketplace:
- The market is not interested in you or your skills. The market is only concerned about its own needs and wants. To be profitable, you will have to find out what the market wants and give it to them.
- Consulting is an ‘eat what you kill’ job – you can only bill and be paid if you go out, find clients, and bring the business back. While this may sound somewhat harsh, it is also incredibly satisfying to close a deal, deliver what the client wants, and be paid in proportion to your service, your idea, or your capacity to execute.
Along the way, there will be multiple rejections and times when you will make mistakes. How you respond to what happens to you – good and bad – will define your success and profitability.
Here, we will look at three essential attitudes for building a profitable business: positivity, attitudes towards money, and self-starting.
Positive Mindset:
It is critical for entrepreneurs, – including independent consultants. It helps to build resilience and keeps you moving forward, looking for ways to improve yourself or overcome obstacles when things are not going your way.Attitude to Money
It will, in no small way, dictate your success, and certainly your revenue and profitability. The first requirement is to get comfortable about money – learn to talk about it, ask for it, deal with not having any. The second is to know your worth so that you do not overcharge or undercharge for what you offer. Part of this is to understand the value of your time. This is the commodity you are selling, together with your expertise – you are accountable for every minute of your day.Self-Starter Mindset You demonstrate this by what you do, not what you say (don’t you hate those CVs with the tired “I’m a motivated self-starter” line?) Real self-starters set and achieve goals, initiate problem-solving, take calculated risks, create and innovate, and promote themselves. As an independent consultant, whether you are on a freelance consulting platform or not, you have to light your own fire.
Have a Great Pitch
It won’t matter how good you are if you can’t clearly and concisely explain to others what you do.
Developing a pitch is a subject all on its own. But you can start with your elevator pitch – how would you explain to someone what you do in the 30 seconds or so you spend together in an elevator? And how would you do it in a way to make them ask for more?
This will take more time than you might expect to work out but is worth the effort.
You will usually use an elevator pitch in response to someone asking what you do. You can also add it to the top of your resume as a professional summary statement or include it in a cover letter for a proposal.
The content should cover who you are, what you do, perhaps how you do it, but the most important is to describe what your skill, product or service does for others. The purpose is to open doors to communication, not close sales, so take it slowly, make it conversational, and focus on forming relationships. If people engage happily with you, then you’ve got it right – if not, start again and keep practicing.
The basic template looks something like this:
I help (your expertise) to (get result) by (your offer)
If you have this short pitch correct, be prepared to answer the next question, “How do you do that?” And then move on to closing deals!
Be Part of the New Consulting Marketplace
Setting up a profitable independent consultancy may be more complicated than you think. But it may also be easier than you think if you take some tips in this article at heart.
My honest advice to consultants, whether aspirant or already quite established, is that they move with the times, become part of the online consulting marketplace, and take advantage of the incredible support offered by freelance consulting platforms.
on a weekly basis.