Independent consulting life can be an enviable position to be in. After leaving the consulting industry for a period of time, I returned to consulting life as an independent (for a little over a year). The pros of independent consulting life include more flexible work schedules (relative to traditional consulting firms), challenging work, and control over both what type of work one does and which clients one works for. But there can be some downsides and pressures that what needs to constantly work when working on one’s own. Below I list some of the pressures of working on one’s own (a subset of these reasons were primary factors for me to return to work within a larger firm):
- Finding new clients while working for existing clients can be tough – There are only so many hours in a day and as an independent, you are marketing yourself. If you are working for a client, you may not have much time for new client development. It is definitely preferrable from an efficiency perspective to sell into existing clients, but logistical reasons may make these options limited (e.g., needs of client change as they move through problem solving lifecycle, and an independent cannot always position themselves as a one-stop shop). Other ways I have seen independent consultants address sales pipeline considerations are by developing a very focused niche (sometimes backed with strong intellectual property), having a extremely strong network of contacts (e.g., with past co-workers and clients in client management positions), using referrals, and lining up clients directly (including timing-wise) from a rolloff from project with the independent’s prior consulting firm. Note that I have never used this last option, but I have seen it used, and I recommend if you choose this path that you both use caution and understand the path’s limitations.
- Although you can "choose" your clients, sometimes you have to eat too – Probably the hardest thing for me as an independent consultant was cutting across vertical industries (e.g., software, manufacturing, insurance). I have spent my work life almost exclusively in the software and telecom industries (note that this is different from many consulting firms which may have consultants working across many industries early in their careers, e.g., first client dog food manufacturer, second client telecom, third client bank, fourth client valve manufacturer). In any case, sometimes as an independent consultant when an opportunity arises that is outside of your target client profile, one needs to take advantage of the situation and really think hard about how one’s background and skillset can be applied to solve the client’s problem at hand.
- Landing the first client can be tough – Often when you move to life as an independent, you may have little to no sales pipeline to start with. On top of that, you may have no past consulting references, which creates additional risk in the eyes of new client prospects. Note that getting that first client can easily take six to nine months and the contracting and qualification processes are often very different than those when getting hired as an employee.
All-in-all, I would say that independent consulting is a tough (albeit rewarding) route. As a general rule, I would probably recommend that only experienced persons and those that have attained the principal-level or higher within a traditional management consulting firm pursue the independent consulting path. The predominant reasons for my perspective here are that these professional milestones can often address or balance out (to some extent) issues related to customer references, size of professional network, and in-depth knowledge of sales processes involving complex services and emotional purchasing behavior.
But as an consultant dont u need some models to analyze a business situations, as a employee of consulting firm,you take the proprietary models and apply them, but as an independednt consultant how do u do it?
Intelletual property (IP) and firm-developed methodlogies can play an important role with consulting firms, but I intentionally excluded these from my list above because I have seen it used in different ways.
For independents, the intellectual property may be built up over time and in a very niche area (for example, comprehensive database of automatic meter reading vendors and users in the utility space). Sometimes the IP rights are obtained by R&D investment by the independent. In other cases, the IP may be developed as part of consulting for the client, but the contract may be written in such a way that carves out the non-client specific results as IP for the consultant. In other cases, independent consultants may develop methodologies based on prior experiences or thought leadership in a particular area.
For larger firms, the IP is often used as part of the strategy to scale the business. For example, the frameworks can be used as part of marketing collateral and as part of “cookbook” methodologies that both new and seasoned consultants can use to jump start an engagement.
The extent to which IP is both leverageable and important to a client are something that needs to be evaluated by a client on a case-by-case basis.
That said (and in support of independent consultants), I have rarely seen situations where skilled consultants are not able to find some sort of “workable” methodology to address a client’s problem. I use the term “workable” here because it implies “value-add” but not necessarily “optimum”. Methodologies used by independent consultants can be as simple as re-hashing long forgotten methodologies from business school, combining methodololgies from different areas, giving old methodologies a new twist, adding analytics to methodologies that have not traditionally had any, etc. The possibilities are somewhat endless, but one should never forget that the litmus test lies in end results in terms of helping the client.
I left corporate emnployment after 25 years and decided to enter the world of independent consulting with no previous track record. However I did have a lot of practical experience to offer in my area of expertise, Business to Business Sales and Marketing. That was two years ago and I would like to make a couple of points related to Steve’s post.
With no clients to walk into, I just stated networking, both online and offline. Some of this was plain people networking and I also started to distribute my knowledge in the form of articles in places like http://www.top-consultant.com .Within 3 months I had a $50k consulting project via a referral from someone in my network and a new business partnership was formed with Paul Collins at http://www.equiteq.co.uk. He grew a consulting firm from scratch to $100m and now helps other consulting firms build growth, so I fell on my feet! Paul had read one of my articles and contacted me directly, we now work together at Equiteq. The lesson I learned here was that you can make your luck and serendipity happens…networking works!
However, I also agree with Steve’s point that it is a risky business entering the world of independent consulting with no prior experience. I have suffered with a lack of formal training and would advise people to consider working for a firm for a few years before going solo.
Tony,
Thanks for sharing. I suspect that there are many people that conteplate independent consulting without thinking deeply enough about networking, work experience, and experience with sales. For example, I have run into many people that have a simplistic view of networking that it is all about “having coffee”. At least for me, I know that some of my early views on networking were simply around socializing.
Steve
Steve –
I just came across your site. I’ve been consulting independently for about 6 years. And, it’s been a wild ride. While I have learned some tips over the years, I think there is a real need for strong sales folks to represent us IC’s.
I focus on business process consulting. And, as I have done more projects with clients and have grown my own network, I still find he sales process daunting at times. The online services (monster, sologig, hotgigs) are never very useful or rewarding. All of my projects have come through my network.
However, I have thought that if there were a lead generation firm that would represent MY consulting practice (instead of the general swath of recruiters that represent clients filling “in the box” job reqs) it would be a huge boon for my practice and something for which I would be willing to pay a commission.
Short of that, my only recommendations to would-be IC’s are (1) use your network, (2) make sure EVERY (and I do mean every) project you do is reference-able, (3) get certifications in your area(s) of expertise – you can ALWAYS learn new things – get certifications for it.
Finally, don’t get discouraged!!! Everytime I go through a contract search I start to questions my abilities. Then, I snap out of it. Spend time networking and selling but also get outside, exercise and get involved with your life, too. After all, the freedom to “live” is the reason we do this IC stuff in the first place.
David Novick