The dos and don'ts of becoming a consultant.
This article accompanies Corporate vs. Consulting
I've coached and mentored solo practitioners since 1996, having established my own independent consulting practice in 1985. I've never had an office or staff -- no one -- and I earn well into the low seven figures. I keep 90 percent of what I earn. I tell you this because most of what you hear about creating a solo consulting practice is just plain wrong.
Here is what you need to know:
* This is the marketing business. Do not stress your methodology or "deliverables." No one cares. Buyers only care about how they will be improved after you walk away. Learn to market well because, believe me, you don't know how to right now.
* Understand your value and articulate it clearly to true buyers -- people who can authorize a check to pay you for that value. Forget your comfort zone because your buyers are not in the human resource department. Your buyers are senior executives in large corporations or the owners of small firms.
* This business is about intellectual firepower. You need to appear and be perceived as a peer of true buyers. Therefore, training jargon, fads and HR approaches won't measure up. (Never mention "right brain" or INTJ or similar fluff.) Focus on the pragmatic needs of your buyers: reduced attrition, greater market share, reduced stress, higher margins, better public repute and so forth. If you're not reading the Wall Street Journal daily, then you're not serious.
* Charge for your value, not by a time unit. Anyone who tells you to determine your financial needs, divide by available hours and come up with an hourly rate is either an amateur or a visitor from the 19th century. Even lawyers, the worst business people I've ever met, are starting to charge by the project and the value they provide. Time-based billing will kill you. Value-based billing will enrich you.
* Understand that wealth is really discretionary time. Some people work so hard to make more and more money that they actually erode their wealth. It's not how hard you work, it's how smart you work. Your presence (labor intensity) is not of value. Your results are the value.
* Finally, beware of the greatest threat to all entrepreneurs and professional services providers: poor self-esteem. The first sale is always to yourself. If you don't believe you can do it, you can't. If you don't believe you're a peer of the buyer, you're not. If you begin to ask yourself, "Why would they listen to me?" or "How can I charge this much?" then find another job. If you don't blow your own horn, there is no music.
Alan Weiss has written many books on solo consulting, including the 20-year best-seller Million Dollar Consulting (McGraw-Hill). His newest is Million Dollar Coaching (McGraw-Hill) and his next later this year is The Consulting Bible (Wiley). You can obtain his free Million Dollar Consulting® Mindset newsletter at SummitConsulting.com. © Alan Weiss 2010. All rights reserved. You can contact Alan via http://www.contrarianconsulting.com.