A few years ago, Marcelo Andrade, PMP, was a full-time IT project manager at a manufacturing company in Brazil. Then he got a glimpse of life on the other side.
“Having worked intensively with a team of consultants for more than six months on a project, I became interested in the dynamics of their work,” he says.
One year later, he received a job offer from one of the consulting firms on the project. He took the plunge and made the switch, eventually starting up his own project management consulting firm, Eficia Consulting in Uberlândia, Brazil. “I came to the conclusion that, in the worst case, I will be adding a rich experience to my career,” he says.
For any practitioner, launching a career as an independent consultant is a gamble. Striking out on your own means wondering where the next paycheck will come from and constantly drumming up new business. It certainly comes with its advantages, though—like choosing which projects you take on and working across a variety of industries.
“You can gain exposure to a wide range of business models, products and industries,” says Pattie Vargas, PMP, principal of The Vargas Group, a management consultancy in San Diego, California, USA.
Consulting often proves to be a project management crash course.
“You can learn as a consultant in a few months what you would take years to learn by working in just one company,” Mr. Andrade adds. “You are put to the test with more intensity than the corporate environment, so it's like accelerated professional development.”
Consulting also gives project managers added legitimacy—a definite advantage in a profession that all too often lacks official authority, says Charles Ryder, PMP, director of Kennedy Ryder, a project management training and consulting group in Kuala Lumpur, Malaysia.
“Working within a corporation, I felt that although I had a lot to offer, my voice was not being heard,” he says. “Consultants are more likely to be listened to, have their recommendations acted upon and have access to more senior people than full-time employees.”
I realize I can never be complacent or sit back and assume business will always come my way. It is a constant search for the next new opportunity.
—Lisa DiTullio, Your Project Office, Cohasset, Massachusetts, USA
ON YOUR OWN
Of course, a lucrative career as an independent consultant doesn't happen overnight. Too often, project managers take the leap without proper preparation.
“Many consultants don't have a fully defined business plan before they launch out on their own,” Ms. Vargas says. “Investigate the market to understand the likelihood of employment, have a firm financial plan for how to manage your business and cash flow, and clearly define your service offering so you can do better target marketing.”
Do your research. Look at websites, attend workshops and pose questions on professional bulletin boards to see what other consultants are doing.
“Put together some marketing materials and then get input from hiring managers,” she adds. “Ask if they would hire you for the services you are offering, and, if so, what they would expect to pay. Solicit input on your message. Ask hiring managers if your value proposition is clear and compelling.”
Being an independent consultant means understanding how to run a small business.
“You will be your own bookkeeper, marketing department, office supplier and scheduler,” Ms. Vargas says. “All that work that got done by others at your previous employer will now be done by you.”
That can be the greatest shock when transitioning from the corporate environment to working independently, says Lisa DiTullio, principal, Your Project Office, a project management consultancy in Cohasset, Massachusetts, USA. “The first two years were full of surprises as I fumbled around with tasks I never had to manage in my prior existence.”
With self-management must come discipline.
“There isn't necessarily a boss holding you accountable,” Ms. Vargas says. “If time management is a challenge as an employee, it will be worse as an independent.”
And time management becomes all the more complicated with consulting gigs. “The project manager's schedule is constantly in flux,” Mr. Andrade says. “It is very difficult to establish a normal working schedule.”
Devise a system—and be sure to consider work-life balance. “Have family and private time,” Mr. Ryder advises. “You will be a better consultant for it.”
Although project management consultants put in some long hours, your time is your own. “Even if you are working a fulltime contract, you can take time off here or there—provided the work gets done on time,” Ms. Vargas says.
MARKETING MODE
Although companies looking to cut costs will frequently hire consultants, competition remains fierce. To attract clients, you must clearly demonstrate what sets you apart from other consultants.
You have to sell your personality. Customers must like you and see that you can adapt to fit into their culture, says Carl Godell, PMP, owner and director of operations at CJL Communications Inc., a project management services company in West Bloomfield, Michigan, USA.
“I must keep adjusting to meet those unique individual customer needs, listening to what the customer needs, finding the pain, fixing the pain and accepting some of the risk,” he explains.
And while one of the perquisites of being an independent consultant is that you get to pick your own clients, you also have to find them.
MONEY MATTERS
How much is your time worth? For independent consultants, it's no philosophical conundrum. They need to put an actual monetary amount on their work—and it should account for all of their expenses.
“Simply taking your salary and dividing it to get a daily or an hourly rate will rarely prove to be an effective method for forecasting your income or meeting financial needs,” says David Zahn, president, Zahn Consulting, a strategic alignment and coaching firm in Wallingford, Connecticut, USA.
“It assumes that you will be at 100 percent capacity and that none of the ancillary costs have been factored in,” says Mr. Zahn, coauthor of How to Succeed as an Independent Consultant— Fourth Edition [Wiley, 2004].
Those ancillary costs can add up very quickly, says Pattie Vargas, PMP, The Vargas Group, San Diego, California, USA. Once you go independent, you'll be paying for healthcare, marketing, advertising, office overhead, travel, legal fees, insurance, accounting services, training and certifications.
And while project management consultants typically earn more than salaried practitioners, they also have a heavier workload, says Marcelo Andrade, PMP, Eficia Consulting, Uberlândia, Brazil.
To calculate fees, work under the general assumption that you will be able to sell about 50 percent of your time, not including weekends, holidays and vacations, Mr. Zahn suggests. “Choose a fee structure that will meet your annual needs, based on only being booked half the time.”
He suggests three possible methods to determine what to charge for your services:
▪ Per basis: Fees are calculated per time unit, per project, per type of project, etc.
▪ Prevailing rate: See what others are charging and choose to be on par. Alternately, you can present yourself as a premium provider or a value offering.
▪ Value to client: What is the worth derived from the execution of this particular work?
In the grand scheme of things, money is but one factor in deciding to become a consultant. It just happens that, for many, it's the deciding factor.
“As a consultant, you can never rest on your laurels,” Ms. DiTullio says. “My mind runs 24/7, constantly brainstorming new ideas, ways to create visibility and channels to land new business. I realize I can never be complacent or sit back and assume business will always come my way. It is a constant search for the next new opportunity.”
Sometimes you don't have to search very far. Consulting jobs often come from current clients, so consultants should try to leverage their connections.
“Every client you deliver the expected results for is another part of building a professional network, members of which will eventually remember the value of your work,” Mr. Andrade says.
Nearly all of Ms. Vargas' business is based on existing relationships.
“They knew me and the quality of my work, so they felt comfortable referring me to their clients or colleagues,” she says. “Those networks are crucial to gaining new opportunities and making new introductions.”
Online resources such as LinkedIn and Facebook can certainly add to your network, but never abandon in-person networking, Mr. Godell suggests.
“The computer is an amazing tool for connecting throughout the world,” he says. “But you still have to knock on doors, shake hands and look eye-to-eye.”
Manage networking as you would a project. “It should be targeted—don't spend time at networking events that don't draw your target market or you'll find it to be a large time drain,” Ms. Vargas says. “Likewise, there may be other consultants who are eager to ‘pick your brain’ about ideas, opportunities and guidance. Just as someone helped you, you should be gracious to them, but beware of too many meetings like that or your week will be gone.”
Ultimately, whether you get jobs will come down to your performance. Fail to live up to expectations, and you could find yourself blacklisted.
“Years ago when I was a project manager full-time, there was a ‘not recommended’ list of consultants who we did not want in our projects due to low commitment and capacity to deliver them,” Mr. Andrade says.
As with any career, there will be some trials and tribulations.
“There is no ‘perfect’ job, so make sure you aren't switching to consulting to escape a bad job environment,” Ms. DiTullio says. “While the switch can be liberating, it requires dedication, perseverance and relentless energy.” PM
