Four key questions…

Whenever someone gets curious about consulting, they usually end up asking one or more of what I call the “four key questions.”

How Do You Get Your Clients?
How Do You Set Your Fees?
How Do You Decide What To Consult About?
How Do I Get Started In Consulting?

1. How do you get your clients?

This is probably the question most asked, and for good reason. No matter what business you start, you won’t succeed without customers.

The answer, of course, is Sales and Marketing. For many considering consulting, this is a potential show stopper. It may be due to professional pride (I’m not a peddler) or even fear (I can’t stand the rejection.) Either way, you need to get over it if you want to be a successful consultant.

But never fear, I’ll share a bunch ideas that have worked for me (and others too.) Personally, I view the Sales/Marketing challenge as just another problem to be solved, no different from any other consulting challenge. Put in this perspective, it can even make getting customers fun.

A final thought — if you are just starting out, you’ll need to do this yourself. If you decide you can not take on this on, you may want to reconsider consulting.

If you are really set on consulting, you could join an established consulting firm that already has the sales/marketing process in place. But sooner or later, you should learn to master these challenges yourself. Even as an employee, the “rainmakers” are cherished.

2. How do you set your fees?

This is the next question that arises, and there is no simple answer. Always remember, however, as a business you must make eventually make a profit. Otherwise, you might as well stay where you are at, even if that just means going fishing.

We’ll look at several ways to price your services. These can range from hourly/daily rates to project based fees, retainers, etc. To begin with, you’ll need to determine an hourly/daily rate, based on your comparative worth in the marketplace. This includes your salary, overhead, and profit. The latter is important, as their is no sense of doing work for the same or less that of an employee.

This is just a starting point, however. Most successful consultants eventually figure out how to get a premium for their services. They may further expand their income opportunities through leveraging, such as classes, books, or other information based products. The current trend is away from hourly rates, and towards project or value-based fees.

Whatever you do, don’t price your services too low. This is a common error made by brand new consultants, or those consulting on a part time basis. My advice — don’t do it! Frankly, the clients you attract with bargain prices are probably not worth having in the first place.

3. How do you decide what to consult about?

This question is personal, and a bit tougher. The challenge is to find something the market values, but that you also enjoy. The latter is really important, for there is no sense starting a business around something you don’t like to do. You also want to look for the chance to leverage your experience, skills, and education.

If you already like what you do, the choices are simple. Maybe you are like me, an engineer who really liked engineering, but who was tired of the big company BS and bureaucracy. Since I already had the technical skills and experience, I just had to work on the business issues. But even here, I had credentials, contacts, and credibility with my future clients.

If you don’t like what you do, it becomes a bit tougher. But don’t overlook a lateral move that let’s you leverage yourself.

An example is a young lawyer I met on an airplane. After getting her law degree, she found she really didn’t like the day to day grind of being a lawyer. She discovered, however, that she really enjoyed the challenge of jury selection, a task most of her colleagues loathed. She turned this interest into a successful consulting and training firm serving the legal profession. As a lawyer herself, she has instant credibility with her clients.

4. How could I get started?

This is usually the last question to come up, and often mildly disguised as “How did YOU get started?” My quick answer is “One step at a time…”

You don’t need to do it all at once. It was nine years from when I began consulting part time until I made the full time Jump to Consulting. During that time, I tried a lot of things that proved useful later on.

For example, as a field sales engineer, I developed and promoted product-focused seminars to bring in leads. Later, I started a couple of newsletters for my customers, both to keep in touch and also to alert customers of new products. To enhance my credibility, I started writing business and technical articles for industry focused publications.

All of the above were techniques I used later in my consulting practice. But thanks to my previous employers, I had already worked out many of the kinks. Not only that, my employers were happy with my initiative and the results they produced.

One boss even gave me a sterling review for the things I tried (even though not everything worked.) You too can start today in your present job. You can even pretend you are a consultant. Eventually, you will be.

But maybe your time frame is shorter. You’re suddenly out of a job, and consulting looks attractive. Yes, it can be done, but it is not easy. Those who I’ve observed that went this route had both their services and their potential clients pretty well defined.

Of course, don’t overlook your present or past employers. While they may not be in a position to hire someone full time (do you really want a full time job anyway?), they may welcome the use of your talents on a temporary basis. And if they are cutting back, they may very well need your help just to get the necessary work done.

Don’t fret — this is just the beginning. We’ll address all of these questions in much more detail in subsequent postings. Until then, keep thinking about these key questions.