For a time during the recession of the early 2000’s, I stopped referring to myself as a consultant. It seemed that every time I did, it was as if I had a huge blinking neon light on my forehead that proclaimed, “Looking for a Job! Looking for a Job!” My clients and potential clients were inundated with consultants who, when push came to shove, were really looking for a job.
I have noticed that during this past recession, there has been a similar phenomenon; many out of work people are hanging up their shingles as consultants. Some do it out of necessity, months and years without a job can push some people to strike out in new directions. A downturn in the economy is often the time when many new businesses are started. On the other hand, there are those that immediately upon losing a job, announce their new consulting practice.
Having spent a large amount of my life as a consultant, I would like to offer some information that may be helpful to those who are moving down the consulting path. I would also like to invite any readers that are experienced consultants (or not!) to chime in. I am also going to presume in this posting that we are talking about someone pondering becoming an independent consultant, not joining a consulting firm.
One thing to consider when thinking about entering the field as an independent consultant is what value proposition you bring to potential clients. It is very easy to paint the consulting image with broad strokes, doing most things for most people. The new consultant must be pretty specific about what services he or she offers, and how those services will benefit potential clients. Finding a trusted colleague to work through this at the start is a good way to go.
Secondly, there is the question of finances. True, the barriers to entry and exit for consulting are low, but are you in a position to go 18 to 24 months without a first contract? If the answer is no, then you may want to continue looking for a job! Even if you are fortunate to find a contract quickly, you must think ahead to where your next contract may come from. It takes some ingenuity to work for one client and keep on prospecting for others at the same time.
Finally, take some time to think out what legal entity you wish to use for your consulting business. There are advantages and disadvantages to each of the legal entities that you might go with, and it is wise to consult with a legal advisor before finalizing your consulting business’ legal form.
For those who have the enthusiasm, patience and will, consulting can be a rewarding career, even if you fall into it by accident!