Can I make it in my own consulting business?

Can I make it in my own consulting business?


consultingThe post-COVID economy is a wake-up call. My full-time job could disappear any day. I’m not waiting around to find out when that will happen. I’ve decided to leave now and enter the world of consulting. How do I market my services cost-effectively? How do I find customers? I network through a professional society, and I’m considering putting out feelers with direct mail and phone calling, but I haven’t tried this yet. I’m also looking into hiring someone to do marketing for me. What do you think about this idea? I’m very good at what I do, but marketing isn’t my expertise. Think I can pull this off, Nick? Any help you can offer will be greatly appreciated.

Nick’s Reply

You have identified the toughest problem in consulting: winning clients.

Start consulting by talking to friends

Your best marketing tool is your reputation. You need to learn how to leverage it by discussing your new business with potential clients — people you have worked with in the past who know the quality of your work. This is even better than networking through your professional society, which should nonetheless be part of your strategy.

You can further leverage existing contacts by getting personal referrals through your work associates: your co-workers, your current employer’s customers (don’t steal them — pick their brains), and the vendors you have worked with. These are the people you have depended on and who have depended on you. Go to them now.

Jump-start a consulting business

I’ll offer you one way to jump-start your new business that I’ve used successfully when launching new businesses. You’ll find a different version of this in Alan Weiss’s excellent book, Getting Started in Consulting.

A powerful marketing method is to poll managers you hope will give you consulting assignments — without asking for business. This is a kind of market research. Reach out first to companies and managers that know you. Explain that you’re considering going out on your own, and that you’d appreciate their advice and insights.

How to Say It
“I’m talking with a few managers I respect. I’d like just ten minutes of your time to answer three questions for me. (1) What kinds of work do you hire consultants to do? (2) What do you look for in consultants you hire? (3) What is the process a consultant has to follow to get your business?”

This is not quite a sales pitch, so don’t sell — not yet. Focus on requesting advice and insights. Use their answers to help you decide whether to make the leap. This approach has the added value of letting these managers know you may be available for assignments. If they are helpful, add this final question: “Is there any advice you’d give me about starting my own consulting business?” (Another is, “Can you suggest any managers or companies that might need services I’d be offering?”)

Getting advice vs. selling

Of course, these managers will read between the lines. They know you’re looking for clients. But you’re not putting them on the spot because you’re not pitching. It’s a fine line, so don’t cross it unless they invite you to. I find this approach tells me pretty quickly who my first prospects might be. Of course, some of these folks will not take the bait. Don’t force it! Thank them and move on to the next.

Beware of spending too much of your capital on third-party marketing services. They can blow through your budget very quickly. If you hire a marketer, make the compensation dependent on new sales. For a one-person consulting shop, the best marketers are really salespeople, and they earn commissions, not fees.

Earning seed capital vs. long-term marketing

The purpose of the polling method is to fund your new business with one or two purchase orders as quickly as possible. But it’s a rare newbie consultant that can keep building a business this way. Your next step is to begin the long, methodical process of establishing a presence and building a reputation.

Weiss offers suggestions about how to build a reputation, like writing specialized articles, doing speaking gigs, teaching, and many others. As an example, I wrote a book, and over a period of years it has yielded excellent results for my business. My book is the best business card I’ve ever had! It’s generated even more exposure as it led to radio, TV and other media appearances. The hidden message: The best promotion for your business takes time.

There’s no quick and easy way into consulting

Be careful about marketing by “putting out feelers” or by using mailings. You won’t be taken seriously. I get such junk mail all the time; I don’t even open it. Feelers are not serious attempts to get business. You must prove to a potential client that you can solve their problems and to do that you must show you know the person and their company. Junk mail proves you don’t know them.

I believe the best way to find new clients is to identify who you want to work for first. Determine what their problems are and be ready to outline how you would help make them more successful. This challenge is far more important than producing a resume or marketing materials that you broadcast widely. You’re more likely to win desirable business if you go after the right clients to begin with.

You’ve got a tough road, but it can be satisfying and lucrative if you keep your wits about you and don’t expect the world all at once. The main reason new consultancies fail is because once they’ve got a project or two going, they stop marketing and there’s no “next project” when the previous one ends. Watch your war chest; make it last. And when the wins come in, leverage them for more business. I wish you the best!

Have you ever hung out a shingle? How did you make the transition from employee to consultant? Do your skills lend themselves to consulting? What’s the most important factor in starting a successful consultancy? What’s the quickest way to failure?

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