I recently had a call from an acquaintance I met awhile back asking for some guidance on how to start a consulting business on the side. She knew I spent several years as a consultant and we both had previous experience in the eLearning world so I was a logical person to reach out to.
Instead of going straight into the tips however, I started with a warning, which is what I feel I need to do here… Consulting isn’t for everyone for many reasons. Instead of having one boss, you’ll have many. And instead of just focusing on the primary skill set you are offering, you’re also going to have to handle marketing, accounting and sales, which will take up a good percentage of your time. Lastly, I quickly learned that there’s a cap on what you can earn as a consultant. It requires you to spend time working for a client and you are typically paid by the hour or job. There are only so many hours in the day and so many days in the year. If you already have a full time job, you will find that consulting quickly eats into any free time you once had. If you want to make more money you either increase your prices (which there is a limit on for any market) or work more hours (which has its own time constraints that I just listed).
Now that that’s all out of the way, here are the 3 tips I suggest to anyone wanting to start a consulting business on the side.
1. Know your niche
This is more than just saying copywriting, web development, etc… You need a real niche within your specialty. A buddy of mine is an accountant. He has several clients in a range of fields, but when he first started he chose one field (daycares) to focus on. Why daycares? Because he knew someone at a daycare that needed help when he was first starting out. He helped them, then asked them to refer him to other daycares. When others saw how much he helped one facility, they were excited to work with him.
In addition to referrals, a niche will give you access to industry events where many folks from a particular field will meet up regularly. Getting your foot in the door at one of these events will further establish you as an expert in your field (that specializes in their field).
You can always go after other niches down the road, just be sure you start with one and put 100% of your attention there first. Which niche should you choose? Whichever one you have an “in” with. This could be a previous employer, a friend’s employer, church or other organization you attend, school your child attends, etc…
2. Approach with value
I currently manage the products for an international software company. I get emails every day from someone who says they can help me do one thing or another better than I’m doing now, and they want to setup a call or meeting. I’m a busy person, so the chances of me setting up a meeting with someone who cold emailed me is slim to none.
If you want people to respond to your emails or calls, having a foot in the door through a friend or mutual acquaintance helps, but it’s just a start. You need to approach with value. Instead of emailing asking for a meeting, send something super useful that they could benefit from now. Are you a marketing person looking to break into the consulting business. Send a post you’ve created that talks about the 3 biggest marketing challenges your niche faces and how to solve them. Don’t have a blog with useful posts that you can refer to? Sounds like you have some work to do.
In addition to the post, let them know that you’ve worked with similar organizations in the past and link them to your portfolio. Don’t have a portfolio? That’s no problem. Have a blog where you highlight specific things you’ve done to help your current organization or any organization in the past. The bottom line is that whoever you are pitching needs to know that a.) you know what you’re talking about, and b.) that you’re capable of delivering what you say you can deliver.
3. Know how much your time is worth
Completing the tips above will pretty much guarantee you a client (or stream of clients). Now it’s up to you to close the deal. When I first started out I didn’t know what to charge, so I asked clients what they’d pay. It’s no surprise that they didn’t want to pay much, which means that I didn’t get paid much despite the amount of hours I was putting in.
You should have a basic fee structure (based off what the market currently charges) in place before your first call. This may be hourly, or per job based off client needs. You need to be able to explain why the price is what it is and why it is worth every penny. And never try to beat the competition by pricing. That’s a quick way to lots of work without much in return. Make a fair price that rewards you for your time, and over deliver on your promises so they’ll keep coming back to you in the future.
Now get out there and start your consulting business.
Already a consultant? What tips or warnings would you add?