7 Common Concerns of New Independent Consultants — and 8 Easy Solutions!
Concerns when considering a career change are normal. For those thinking about leaving corporate life to become a consultant, those concerns are elevated.
Starting a consulting business does not simply mean finding your way around a new office — it means running your own business. If you have always been an ‘employee’, never your own boss, you might be hesitant to make the change.
I’m here to tell you that your fears are understandable, and I’ve been there myself. But, as long as your career is in a position that making the move to consulting makes sense, the transition into becoming a successful business owner is far simpler than you think.
I have spent the last 16 years helping people just like you take control of their lives and build successful independent consulting businesses. What I have learned is that even though everyone thinks that their own insecurities, challenges and problems are unique, there are a lot of commonalities.
Most people starting out as an independent consultant have the same seven common concerns. For you, one or two of these might stand out as the ‘big fear’, but you are likely to have tossed and turned about all seven of these.
It is also the case that these seven concerns revolve around the big hurdles you need to face when building your consulting business — they aren’t unfounded concerns! Together, we are going to learn how to deal with them. This is my list of the seven most common concerns of independent consultants — and eight simple solutions that will let you succeed on your own … and yes, I meant to say eight!
1. What if my network won’t hire me?
If there is one concern I hear the most, it’s “ what if my network won’t hire me”. This is perfectly understandable. The big change when moving into independent consulting is the responsibility to manage your own network and a pipeline of jobs.
A lot of new consultants fear that they will quit their job and never be able to get off the ground. Others know that they have their first few jobs lined up, but fear stagnation in the long run. This concern can dominate the first few years of a new consultant’s life, and even prevents some from ever giving consulting a shot.
What to do:
Making sure that your network hires you is central to your entire consulting business — it is your consulting business. This one is not ‘in your head’. To succeed as a consultant, you need a plan to make your network work for you. We are going to spend a little extra time explaining how to prepare and go about networking to make sure that you succeed.
Step 1: Make sure that you have a network
If you don’t have a network, it is unlikely that your network will be able to hire you. You need to make sure that you have wide-ranging connections before making the move into consulting.
One good metric is having more than 500 connections on LinkedIn. This is a little superficial, but it is a valuable starting point to think about the health of your network. Of course, not everyone is on LinkedIn but you will need to be if you want your network to hire you, so make a profile and start adding people.
Quantity is good, but quality is better. Knowing a few well-connected people is far more valuable than having a giant network of people who can’t hire you or connect you with real decision makers. Many consultants get their business off the ground with the help of one or two well-connected individuals willing to get them through the door with your first few clients. Make sure you have that person within your network.
Step 2: Start networking now!
The real key to overcoming the fear that your network won’t hire you is to network before you leave your job. Rather than quitting and then going about laying the groundwork for your first consulting job, start now!
You may not be able to pick up a consulting contract before you leave, but nothing is stopping you from meeting a few people. This will help you assess the state and scope of your network. It will even allow you to win your first assignment. If done right, you will be able to leave your current job and walk straight into your first consulting gig.
Ready to start networking successfully?
Our guide to networking addresses common concerns independent consultants have regarding the game of networking and provide guidance on how to master it.
Step 3: Deliver real results to your first clients
If there is one thing that will keep the work coming in, it is delivering real results to the clients you have. You need to hit the ball out of the park on your first job. People talk. If you build a reputation for excellence, job opportunities will come to you. Doing this means not only knowing what objective success for your clients looks like, but also understanding their unique expectations and delivering on those as well.
Step 4: Stay connected and grow
The final piece in delivering long term client opportunities and overcoming this fear is to keep networking. A large part of getting job opportunities is staying ‘top of mind’ with people — that means staying connected.
You should be sitting down with 6–8 people every week, just for a chat. Meet new people and stay in touch with the foundation of your network. Remember to give people Christmas and birthday cards. Be active on LinkedIn, write thought leadership posts, interact with posts, make recommendations and engage. In all of these engagements, make sure that you add value to each interaction and avoid sales pitches. Check out our blog on how to network like a consultant for more advice.
You need to use every job, every connection and every contact to meet new people. By growing your network and remaining in touch with the people you already know, you will create an ever-expanding pool of people who will turn to you when they need consulting advice. That is how you make sure that your network hires you and overcome the concern of network failure.
2. Will I have income security?
It is a common belief among people in traditional employment that working for yourself is a path to perpetual insecurity. They fear that continuously moving from one job to the next means constant fear of this job being their last — leading to income insecurity.
Nothing could be further from the truth. Getting over this fear is about preparation and a change in mindset. Building job security through self-employment as a consultant is more than possible. In fact, it is a route to far greater job security than you could ever obtain working for someone else.
What to do:
The first thing to understand is that your perception of traditional job security is wrong. When working for someone else, you could always lose your job. Your boss might try and push you out, your department could be downsized, or the whole business you work for could go under. With very few exceptions, when working for other people, your job security is dependent on decisions made by other people.
As an independent consultant, you are self-employed. That means that you are in charge of your own destiny. If anyone is going to make downsizing decisions, it’s you. By having many clients, you diversify your customer base. You might lose one client, but you would have to lose them all for it to put you out of business.
The reality is that once you are established, working for yourself is the most secure form of employment you can have. You just need to make sure that you network, build a good reputation and always do what you say. A move into independent consulting is actually a move towards job security — realise that and stop worrying.
3. I don’t know where to start
Starting a consulting business can be the hardest part of being a consultant. Many people know that they want to become a consultant, know that they can succeed, but don’t know where to start. This is completely understandable — consulting is new ground, how could you know where to start?
Not knowing where to start can have two different origins. Generally speaking, prospective consultants either completely lack the reference ground required to develop a plan, or feel completely overwhelmed by the number of options that striking out as self-employed offers. Either way, the solution is actually the same.
What to do:
When starting a consulting business, there is actually only one place to start — your network. You need to get out there and start meeting the people you already know. You need to identify who you know that can connect you with other decision makers. You need to identify if anyone in your core network might want to hire you right off the bat. You need to figure out how to build stronger connections within your extended network.
Getting out and meeting people will also give you a better picture of your own skills. Learning what people you know already think you are good at can teach you a lot about your reputation, along with helping you identify skills you didn’t know you possessed. Lastly, meeting your network will also give you a feel for the kind of skills you might need to develop to fit in with the job opportunities you will first have available.
For those overwhelmed by the possibilities, creating a schedule will help. Sit down, think about how many hours a week you have to dedicate to building your consulting business and start allocating your time to different tasks. Figure out how much time you can dedicate to meeting people and set aside time to prepare — studying different industries and learning new skills. All the while, however, stay focused on what will help you connect with the people you already know.
Meetings will turn into jobs, and jobs will turn into more meetings, new contacts and then new jobs. That is the cycle of consulting — contacts into contracts. The only place to really start is to get out there and meet the people you already know, introduce them to the idea of you as a consultant and see where things go.
Get Started Today
With our guide, you can get the inspiration and information you need to get started in consulting!
4. My skill set is not in demand
Starting a consulting business will laser focus your attention on the skills you possess like no other form of employment. Having a good skill set is always important, and I would never suggest that professionals don’t think about their skills or work to improve. But the routine that develops (to a greater or lesser degree) in any form of traditional employment can make it easy to forget about what your skill set is actually delivering to your employer. You are just doing the thing you were hired to do — if it wasn’t valuable, your job wouldn’t exist.
Being a consultant removes you from the world of routine, and requires you to constantly demonstrate your value to new clients and prospective clients. Being a consultant also requires you to be an expert — simply ‘good’ isn’t enough. Consultants sell their advice and if you weren’t an expert, why would anyone listen to you? It is no wonder that starting a consulting business can cause some anxiety around your expertise and the in-demand value of the things that you know how to do.
What to do:
The first thing to realise is that self-doubt is not a bad thing — it’s actually an indication that you are good at what you do. The Dunning Kruger Effect is an observed physiological phenomenon in which people who have only a cursory understanding of a particular subject often mistakenly self report the highest levels of competence. It is why university students often believe they have cracked some secret about philosophy, politics or the world.
It is only through deeply grappling with a subject that you learn the massive depth of things to understand. Your self-doubt is evidence that you understand that there are many things that you do not know. Although people become more confident in their skills as they become true experts, there is wisdom in understanding the limitations of your knowledge.
The next thing to realise is that the consulting market is vast and there is demand for almost any set of skills, so long as you are good at what you do. It doesn’t matter if you are an expert in HR, marketing, logistical operations, business mergers, international expansion, IT, or high-level acquisitions strategies — there is room for specialists, generalists and everything in between. If you are talented, you will be able to become a consultant with any skill set.
Your goal as a consultant should be to understand how to land the right clients and set the right expectations. What is important is being good at what you do — you just need to find the right clients. Luckily, the job you have today has likely placed you in a professional network that values the skills you already have. Like with so many things in consulting, you just need to turn to your network to find the right people and resources to get started down the right path.
However, this does not mean that you should simply think that the skills you have today are the only ones you need. By becoming a consultant, you aren’t giving up on learning. In fact, you are about to embark on a learning-fueled adventure. Understand your limitations, work to improve your capabilities every day and stop thinking you don’t deserve your success.
You should work to both deepen certain skills and broaden others. The most successful independent consultants possess areas of specialisation and generalist knowledge that will allow them to dive deep into challenges and connect solutions across different business functions.
The key, however, is to let this progression develop naturally as you grow your consulting business. Identify the skills that clients value the most and invest in developing those further. Then think about other areas of business that sit just adjacent to those skills and look to learn something new.
For example, if you end up doing a lot of technical consulting on new IT projects, learn something about staff training and integrating new IT systems into work culture. That will allow you to consult on both halves of IT projects in the future.
What skills are in demand for consultants?
Check out what the eight best careers are if you want to become an independent consultant. The skill sets of people with these careers are highly sought after.
5. I don’t know what to charge as a consultant
Not knowing how much to charge as a consultant can be a big stumbling block when starting out. It is confusing, and established consultants can be pretty cagey about their rates.
Getting your rates right is critical to being properly compensated for your work and getting clients in the first place. Charge too little and you won’t take home what you deserve — you might even lose opportunities by not appearing professional. Charge too much and you will scare away clients.
What to do:
The secret to consulting rates is that they vary. Consultants quote different rates to different clients based on what they believe they can afford, and then keep their rates secret to avoid upsetting clients who pay more for services. This is great for consultants, but challenging for prospective consultants trying to get a handle on industry standards.
Good quality consultants charge around £2500 per day. Some might charge a little less under certain circumstances, and highly-experienced consultants with an in-demand skill set can charge considerably more.
Your ability to expand into the higher end of average day rates is something you will be able to determine through experimentation with different clients. One thing to remember is that if you never get pushback on your prices, you are probably not charging enough.
You also need to remember that different clients are able to pay different fees — a primary reason that price points in this industry can be confusing to new consultants. Large enterprise clients and well funded small businesses, for example, can obviously pay more than an NGO or non-profit organisation.
Broadly, you might expect to change your rates by 10%-20% depending on the client. It can also be important to remember that putting prices in the context of the value you will deliver to the client can help you land higher day-rates. A project fee of £25k, for example, will look like great value compared to £1 million in cost savings over 2 years.
6. It will take too long to start getting paid as a consultant
It is common for someone to be ready to start a consulting business and feel like they have a plan in place to get started, but be concerned that it will take too long to get their first paycheck when starting a consulting business. This can be a real concern, but it can also be overblown.
What to do
It is true that it can take a while to land your first job as an independent consultant. However, it can take a while to get a new job if you leave your current one for any reason.
The answer to this fear is pretty straight forward — don’t strike out to start a consulting business if you’re on the brink of destitution and plan ahead.
There is risk when starting any business, or making any kind of change to your life — heck, there is risk just leaving your house in the morning. You do need a bit of cushion to start a consulting business with confidence.
However, just like with making sure that your network hire you, getting out there and meeting people before you leave your job can go a long way to making sure that the gap between your last paycheck and your first signed client will be minimal. However, you don’t want to be in a position where you are forced to take clients just to get paid. You need breathing space to take the right jobs, put in the time required to network and invest in the future of your business.
7. My family won’t support my decision to start a consulting business
My own family was concerned about my move into consulting many years ago. Fear of an unsupportive partner, friends or colleagues can put many would-be great consultants off from making the transition.
Although ignoring the advice of friends or colleagues can be done, you have to have the support of your family to make the move into consulting work. A lack of support will put a strain on your home life and prevent you from giving your business the attention that it needs. Having that support should be a dealbreaker for your decision to start consulting. You need to know how to explain your plan to become a consultant to your family.
What to do:
You need to talk to your family — it is that simple. Listen to their concerns, talk through those concerns and be responsive to criticism. Having a detailed plan about how the transition will work will go a long way in calming the concerns of your partner. Tell them the kinds of jobs you intend to do, how you will get them, who you already know who can help you get those jobs and your plan for growing the business.
Talk about the costs and benefits of making the change. Independent consultants have more control over their work/life balance than most. Be able to talk about future job security and your vision for a stable and successful future in self-employment.
The reality is that your partner is likely to have many of the same concerns that brought you to this article — job security, network accessibility, skills and fees. If you can provide answers to all of those questions (and you have a plan to succeed), they will support your decision. Don’t be afraid to talk to your family about this decision, use their input, concerns and advice to build a better plan for starting a consulting business and then move forward together.
Franchise consulting partnerships: making the move into consulting far easier
The eighth solution on this list is to join a franchise consulting partnership.
Contrary to what you may believe, being an independent consultant doesn’t mean working alone, or operating without any support — it means owning your client relationships, owning your own business and controlling the jobs you take.
Consulting houses
There are a number of types of organisations out there designed to help consultants find work and deliver to clients. The most well known are the large consulting houses (think Bain, McKinsey and BCG). For most of the people who work here, this is not independent consulting: it is working as an employee doing consulting work.
Associate programmes
There are also ‘associate programmes’. Some of these are associated with large consulting houses, but also boutique operations. Joining an associate programme leaves you free to find work on your own, but will also provide you ready-made access to client opportunities. This can be great for new consultants with smaller networks.
The problem is that the associate programmes will take a large cut (often more than 50%) of your day rate, and the clients you meet through the programme will remain loyal to the programme — not allowing you to build the kind of independent reputation you need to grow your own business.
Franchise partnerships
These are basically the reverse of associate programmes. Rather than providing your clients, they provide guidance on how to grow your own network. You get access to mentorship and training opportunities, along with an executive assistant (EA). You will meet other independent consultants and grow the possibility for partnerships and client sharing.
Like associate programmes, partnerships operate on revenue sharing schemes. However, you will keep a far larger percentage of your fee — generally, in excess of 80%. The pay off is also greater. Because a franchise partnership is invested in your success, you know that all training opportunities you get through the programme are in your best interest.
On the whole, franchise partnerships provide structure to your transition into consulting. They can help you access your network, set the right prices, learn how to network, develop new skills, grow your business and allocate your time appropriately. If you still have concerns about how to start your consulting business, reaching out to a partnership will help you get tailored advice on what to do next.
2019 is a great year to get started. The consulting industry is growing, independent consultants are in high-demand and you made it to the end of this article. If you are serious about consulting, don’t let your fears hold you back. Be honest about the help you need to maximise your chance of success and get out there and start meeting people. Good luck! It isn’t as hard as you think it is.
Originally published at https://blog.positivemomentumpartners.com.
