Be a consultant, they say. Enjoy freedom. Be your own boss. Be the expert. Charge big bucks for a few hours’ or a few days’ work, then hang out. Rightâ€”in your dreams.
Setting yourself up as a consultant is certainly a timely topic these daysâ€”financial disasters and allâ€”but I think I owe it to you to add some realism to the concept. While traveling this weekend (down to San Francisco for a couple of days), I picked up The New York Times and saw “Risk Yes, Structure No” in the careers section, written by Eilene Zimmerman. It’s about consulting. More specifically, it’s about the move from consulting as a job with a paycheck and a boss to consulting on your own.
Let me start by saying I’ve been there. And for me, it worked. So don’t take all the warnings and concerns I have to add as entirely negative.
By “been there,” I mean that out of business school I took a job with McKinsey Management Consulting, which I didn’t like. They didn’t like me much, either, so I lasted only a few monthsâ€”but that’s a different post. I spent three years as a consultant with Creative Strategies, ending up as a vice president. Then in 1983–in the middle of a recession as bad as this oneâ€”I ventured out on my own. That, too, is a different post.
Zimmerman goes through a series of questions and asks successful consultants to answer. Her piece is well done, and truly the talk of the times, too. But still, I think there’s another whole side to it that I need to add. I’ll get to that in a minute, but first, in answer to the question “Am I ready to quit a consulting job and go on my own?” she says:
Compared with corporate workers who take direction from a boss and receive regular paychecks, consultants lead lives with much less structure and much more risk. You need to know whether you can handle a new level of uncertainty and self-direction.
Before you decide to take the plunge, understand that consulting doesn’t always provide consistent income.
“You may have the best-laid plans, but you still don’t know when you will land that first client or when your income will become regular,” said Edith Onderick-Harvey, president of Change Dynamics Consulting, a leadership development firm in Andover, Mass. Also realize that you will need to spend a significant amount of time marketing your skills.
“Sometimes 75 percent of your time will be spent selling yourself and often that’s just networking, not even real job opportunities,” Ms. Onderick-Harvey said.
That’s all true for sure. Just to add flavor, I’ll give you a specific example: me and my wife, Vange, and, as they grew up, our five kids. From June of 1983 until sometime in 1995 when Business Plan Pro took off, we never really knew where the money was coming from beyond two or three months. I made a good living, when I look back on it, but the uncertainty was hard to live with.
I had one very significant advantage which I hope you’ll also acquire: a very strong, long-term client. I managed to build a relationship with Apple Computer that lasted and became a long-term platform for repeat business lasting 12 years.
I had another, shorter-term advantage that I hope you’ll have as well: a good, strong relationship (meaning somewhat reliable monthly business) with the employer I was leaving. I left Creative Strategies to start out on my own (lighting out, as one of my favorite blogs calls it) but took a monthly retainer for a newsletter contract with me.
And finally, a third advantage that came shortly afterward: another monthly retainer from a second client, one I had met while a vice president, who contacted me afterward and negotiated the monthly retainer.
When I think of just lighting out on my own without these fundamentals to rest on (the Apple relationship and the two retainers), it chills my spine. It could have happened, though, because I lit out first and cemented the key relationships later.
And, it could have gone otherwise. We almost lost our house six months after I started. We were two and a half months late on the mortgage.
So I’d suggest, before you go out on your own, you consider
- Do you have a choice? and then, if you do,
- Where is the money really coming from?
By the way, buried in The New York Times story is this reference:
Write a business plan that establishes how revenue will be generated and how you will handle sales, marketing, finance, operations, expenses and fees.
Yes. I consider that a magnificent understatement.
More on this in part 2, tomorrow.