In every market sector there’s an army of independent consultants at work - from IT consultants to HR consultants, right through to management consultants.
In fact, according to Companies House, independent consulting was the second most popular choice for start-ups last year in the UK.
The appeal of starting your own consulting business
Professionals start up consulting businesses for a variety of reasons.
For some, it’s the lure of being your own boss, doing work that you love for organisations that you value and having the independence and freedom to do that work on your own terms at a time of your choosing.
For others, it comes out of necessity. The Covid crisis has led to furlough, reduced working hours or even redundancy. Having grown accustomed to working flexibly, setting up on your own may be a natural, next step.
Before you set out on your journey to becoming an independent consultant, you need to know the truth about the myths surrounding consultancy.
Because one thing is for sure. Being an independent consultant isn't sexy, glamorous, or easy. In fact, it’s extremely hard work.
Start-up costs may be low and profits potentially high, but the reality is that 80% of the independent consultancies being founded right now are unlikely to survive beyond two years.
This doesn’t have to happen to you. That’s why I’m sharing some of the lessons that I’ve learned over the past seven years on my own path into independent consulting.
Why do most consultants fail?
Given that so many highly qualified and intrinsically motivated professionals try their hand at consulting, it’s surprising that so many talented individuals fail to make a living from applying their undoubted skills and knowledge.
The first lesson of independent consulting is that you must find clients that need your expertise and are willing to pay for it.
Moreover, you must be able to win business in the face of competition – sometimes, intense competition. Remember: Good as you undoubtedly are, you’re not the only game in town.
Clearly, you have to get good at marketing and sales. Some people find this critical aspect of consulting challenging.
However, to succeed you do need to learn how to identify ideal clients, engage with them to uncover their current pain points, propose compelling solutions, and gain approval to implement your proposals.
This is an end-to-end process with each potential client that often takes several weeks, if not months, to unfold. What’s more, it usually requires 10 or more different interactions before your paying consultancy project is finally signed off.
Therefore, the major reason that consultants fail is an inability over the longer term to generate a sufficient number of fee paying consultancy assignments.
How do you succeed as an independent consultant?
The first thing to recognise is that succeeding as an independent consultant is as much about mindset as it is skillset.
I provide more information on this in my recent article What you need to know before starting your consulting firm.
Although, there is no single success formula, many consultants follow this simple six-step plan:
Define your consulting niche
Develop an offering that solves real world problems
Choose the right business model
Build your unique brand
Set-up a marketing engine to fuel your prospect pipeline
Sell yourself
As previously mentioned, step 6 is critical because potential consulting clients are always looking for know-how to solve a problem and the right person to deliver the solution.
Selling yourself as well as the services you provide
You must get comfortable with selling your knowledge/know-how and selling yourself.
For many new consultants, this does not come naturally. So, here are five tips that will help you to sell better:
Make sure you are talking with decision-makers
Ask probing questions to identify their needs
Focus on solutions, value, and ROI
Provide proof of your expertise
Be persistent and don’t take rejection personally
Landing your first paying consulting client
You may be fortunate as I was to land your first client almost immediately on starting up.
For me, this was pure good fortune. A former colleague heard that I had gone solo and needed some help…urgently.
For you, perhaps your former employer might wish to retain your services for a short while?
If you don’t have an immediate opportunity, then landing your first paying client represents a huge challenge.
Without clients, you have costs but no revenue. You’re burning cash and you don’t want to run out of runway.
So, how do you get that first consulting contract as quickly as possible?
Here are six tips:
Be crystal clear on who you help, what problems you solve, with which results, and why clients should choose you.
This forms your unique value proposition
Get your unique value proposition across, clearly, concisely, consistently, and repeatedly.
This builds brand awareness
Approach companies and individuals who know you already
This helps you get meetings
Focus on specific problems that you can solve quickly
This helps you isolate small assignments with lower sign-off levels
Price competitively to win the business.
This maximises your chances of landing your first paid project
Offer guarantees if necessary
This builds client confidence
Successfully delivering your first project and getting paid for it is a key milestone on your consulting journey.
Many would-be consultants never get this far. Now you have, it’s time to address your next challenge.
How to grow your consulting business?
As noted above, you need to be continually marketing your offering and building your prospect pipeline.
Assuming you’re continually identifying and nurturing new opportunities, two proven strategies will help you grow:
“Land and expand” - Identify, scope and secure new projects with existing customers
“Rinse and repeat” - Identify similar projects with new customers and use testimonials/case studies to open doors
Strategy 1 depends on the quality of work done and the ability to build upon the success of your initial project.
Strategy 2 depends on either:
a) Having a repeatable process which can become a productised offer - or
b) Your target customers all having similar pain points.
Overall, the key to growing your business is do good work within your consulting niche and to become known as a recognised expert who achieves quantifiable results for your clients.
Indeed, the final lesson that I’ve learned is that independent consultancy is a relationship business.
It’s built on your personal reputation, which comes not only from the quality of the work that you do but also from the quality of the relationships that you form.
When you ask successful consultants how they get their consultancy projects, don’t be surprised when they tell you that most of their work comes from referrals and recommendations.
Summary
If you aspire to being a successful consultant, I hope that this short article provides you with some solid advice straight from the trenches.
The need for consultants is growing in all aspects of business, especially as we prepare to exit the restrictions imposed during the Covid crisis.
If I can succeed, then I am sure that you can too.
Please feel free to download a PDF summary of the key take-aways from this article and listen to the recent Cambridge Network Webinar on the same subject.