Consultants on Consulting: How to Make the Switch
Project professionals discuss how they went from practitioner to consultant — and how you can you do the same.
25 May 2010
A career as a consultant may look like a dream from afar. You get flexibility. You get to be your own boss. Still, project managers who’ve traded in their practitioner role to become a consultant will be the first to tell you the transition takes a lot of hard work — with no guarantee of success.
But for those who are passionate and can carve out a niche, the consultant route may be a good option.
Before you take the leap, define your expertise and the services you plan to offer your clients, says Bruce Katcher, Sharon, Massachusetts, USA-based author of An Insider’s Guide to Building a Successful Consulting Practice.
Focus on particular types of projects, at a particular stage of development, in specific industry sectors or in a specific geography,” he says. “That way it will be clear to others what you do and what types of people need your services. It will also make it much easier for you to market your services to the appropriate target audience.
It can be tempting to try to be all things to all people when you’re trying to get new business, but that’s a mistake, says Roberto Toledo, PMP, managing director at Alpha Consultoria, a project management outsourcing and staffing firm in Mexico City, Mexico.
“Don’t go in saying you can consult on anything related to project management,” he says. “It’s better to offer your potential clients tangible, identified results. Saying to a potential client, ‘I can offer you an assessment of the current maturity level of your project management office’ is a much better sales argument.”
Failing to define your services can be costly. “Not being clear about where you intend to go and why is a big reason why 80 percent of new companies fail in the first five years. With a clear vision, it’s much easier to succeed,” says Jack Bergstrand, who spent 25 years in project management before starting Brand Velocity, an Atlanta, Georgia, USA-based consulting firm focused on strategic and technology project acceleration.
The easiest place to launch your marketing campaign as a consultant is with your current employer. Mr. Toledo suggests talking to your employer about your plans and offering to work on a contract basis. If you do pursue such a deal, make sure your arrangement recognizes you as a consultant and not an employee.
In addition to your current boss and co-workers, meet with past employers and colleagues to let them know that you’re consulting and ask for referrals. These contacts are also good for testimonials about your work. Don’t be afraid to reach out to these people on sites like LinkedIn and ask them to write a recommendation on your profile.
As you’re lining up all these new clients be sure to discuss fees up-front. “If you charge by the hour, your clients will try to pay you the same hourly figure as they pay their employees,” advises Mr. Katcher. “This is insufficient compensation for the risks you have taken to become a consultant and the value you provide. It will also not be enough to cover your benefits, retirement and marketing expenses.”
If, for example, you want to earn US$100,000 per year before taxes, when you add in the additional costs you will incur for taxes, insurance, retirement benefits and other expenses such as administrative costs or marketing, you will really need to earn revenue of approximately US$175,000, Mr. Katcher says.
“You cannot plan on being able to bill out all of your time to clients. You need to factor in days that you will not be working, such as holidays and your vacation, sick and personal days. You also need to set aside several days per week for marketing, sales and administrative work,” he adds.
And remember: Because consulting is all about forging relationships, you’re probably not going to magically build up a flourishing business overnight. “Building a consulting practice is hard work and often takes a long time — but it’s also very rewarding,” says Mr. Bergstrand.
