Could you cut it as a consultant?

If your career has allowed you to specialise in a particular area of expertise, then why not consider capitalising on these skills and start your own “consulting service”. Since little start up capital is required a consulting service is a cost effective way to start your own business. Generally speaking a consultant is "an advisor in a particular field who provides advice and guidance to either a business or to another individual".

Jo Darby from Priority Partners, says the benefits of being a consultant for a Mum are huge; you can pick up the kids from school, be paid fully for what you are doing, you can choose to work from home if that’s what you want to do, ultimately you will be able to choose what you decide to do and with whom. Jo says the greatest benefit of being a consultant for her is the sense of fulfilment, doing the work you really love.

Jo says” I think it all comes back to what you value, she acknowledges “I suppose whats important to me, … the biggest value I have in life is all about freedom, which is what consultancy brings to me”. Jo believes becoming a consultant is actually about aligning yourself to what is most important to you, your core values such as freedom and flexibility to work your own hours. Jo says from her personal experience it is about “ having choice, she can now do the work she really loves to do and can choose to work with those people who bring her energy”.

Jo admits in the early days it was a little bit harder to pick and choose clients, “because we tend to just take any client on board to try and get started”. Jo says choice of clients has always been apart of Jo’s long-term vision, which she has now achieved in terms of saying yes I will work with this person and or business and no I won’t work with them.

What do I need to be a consultant?

You don’t necessarily need a serviced office; you can set up an office within your home. You may need certification or hold a licence, it is entirely dependant on the area you decide to consult in. It would be highly beneficial to the initial success of your business to be able to promote significant and credible achievements in your area of expertise. For example if you successfully set up key systems, effectively facilitated and coordinated a large project, successfully tendered for large contracts, advised a board or team of employees or assisted with the negotiation and facilitation of joint ventures, profitably managed the supply chain and so on …such accomplishments are great examples of your ability and highlight your level of expertise.

The first and most important ingredient in successfully starting a consultancy business costs nothing more than your time and consideration. Jo warns before advising anyone to become a consultant she suggests they consider their motivations for wanting to be a consultant. You should only consider “consultancy” if you truly believe you have something creditable to offer, that would genuinely be of benefit to someone else, other less heart felt monetary motivations will certainly underpin your lack of success as a consultant. Jo explains, “if I am working with someone who has certain skills they could transfer into a consultancy practice and who is considering whether or not they stay where they are or become a consultant, the first question I would ask is what is the motivation for wanting to start a consultancy business this is the prime motivator. I would typically say to them, when you think about moving into consultancy what is it that firstly you are trying to eliminate from where you are now. For example if someone is working long hours, not getting paid for what they do, working with clients they don’t want to work with I would caution them and suggest they carefully consider their situation, becoming a consultant may well not eliminate the problems they are experiencing”.

Jo suggests if you are considering becoming a consultant, you should ask yourself what are you trying to achieve? She says when you truly understand and embrace what you are trying create and why, you will gain an incredible sense of power and motivation. Jo says it might be freedom for some whereas for others it could be about doing what they really love and have a passion for. Jo believes when you are motivated by factors such as self fulfilment and a sense of worth, you simply can’t help but work on your business. Jo finds great joy in her life as a consultant; she finds she is inspired to work on her business because she really loves what she is doing. As apposed to how one would feel if there motivations to become a consultant are inspired by a need to escape a current situation or because you feel you are not being paid well enough, or you have an over controlling boss.

You should also consider your expertise, what you will consult in. To be a good consultant you need to be knowledgeable in your area of expertise and you need to be passionate about this skill set. One of the biggest points of difference between consultants in a similar field is passion and commitment. Those who truly care for the short and long term well being of their clients are far more successful, than those who purely just consult. Jo encourages people to consider their skill set she says if you are considering becoming a consultant you need to be exceptional in your field of expertise, and if you can’t be absolutely exceptional that is ok but you do need to be prepared to become the exceptional. Jo admits some people try to be the best at the beginning, she says you don’t have to be the best at the start but you need to be prepared to lift the bar everyday to eventually become the best.

Other considerations

You will need to register a business name, unless you have opted to trade under your own name.
You will need to register for an Australian Business Number (ABN). You will need an ABN, as otherwise your clients who are registered for GST will be required under law to with hold a certain amount of your payment / fee. Which by the way is then forwarded to the ATO.
You may or may not need indemnity insurance; it really depends upon the type of advice you are dispensing. I would recommend you look into whether you do need to take out an insurance policy or not.
You will also need to consider whether you will or won’t register for GST, it is preferable to register, so you can gain the benefits from claiming the GST input credit on your business related expenses. Please note just because you have an ABN doesn’t mean you are automatically registered for GST nor does it mean you have to register for GST. (You may wish to visit the FAQ section covering GST, click here)
You will need to have excellent people skills, in order to establish, develop, and sustain client relationships.
Try to distinguish yourself from the competitors, offer your potential target market something new and or innovative. This will narrow down your field of competition because there are fewer consultants specialising in what you do.

Networking

To be a successful consultant you will, need to understand how to successfully network yourself and create a large group of relevant contacts, who you could approach to help start building up a client base. In the initial start up stages of your consultancy service you will need to “chase the business”. You need to be committed and resourceful it takes time and energy to build a successful consultancy service. Start up phase irrespective of the type of business, is notoriously tough, this won’t always be the case. As you build your business, you will find your business will start to organically grow through referrals.

Jo offers some advice on the topic of networking; For networking to be effective you need to say, “what is it that I want to use the networking event for? what outcomes do I need to get from the networking engagement, for example do I need to network so I can develop cross referreal relationships” or “is it to get your name out there” it is important to identify the intent for attending the networking engagement. Jo also cautions you need to “keep a lid” on the amount of networking you do. If you spend a lot of time networking you may find you have no time to do other tasks as required by the business, your level of productivity will certainly suffer.

Time Management

You will need to be organised. A client will expect you to turn up on time, with the day, meeting or consultation planned in advance. Don’t expect to turn up to an appointment and “simply wing it”; the client will see your lack of preparation as a sign of a lack of competence and commitment. Even though you may have secured the clients business, you must still conduct yourself in an organised and professional manner, the client will be watching your every move.

Jo emphatically says, “Time management is critical, if you want to be a successful consultant”. As a consultant you sell time, and as they say “time is money”. Jo says she deals with this issue with a number of her clients, she says she asks her clients to identify their vision and goals and all the tasks required to be completed. She helps her clients to establish and set strong boundaries, Jo says, “If you don’t set strong boundaries say around the client, the client could possible absorb all your time and energy”. Jo states, “it is important to actually take care of your self as well so you have the energy to maximise your use of time”. Jo says she helps a number of her clients to identify key processes and how these can be automated to bring about greater efficiencies, for example a new client comes on board, the consultant should have developed “welcome” templates.

Jo says it is important to have a strong “systems” foundation; it’s about work flow. Before you embark on servicing your first client you should spend time mapping out and developing how you want your business to work, what are the key processes, systems and procedures. As a consultant you need to understand how your business flows, the life cycle of client and even down to when the client finishes.

It is a lot of work up front; Jo says once you get it in place it’s like a map of how you want your business to look and underpins your ability to better manage your time. Jo says you should look at key areas of business and allocate a proportion of time to each activity. i.e. when starting up a consultancy practice you may need to spend 40% time networking, 20% maybe spent on building a product, working with your product or product delivery, 10% of time should be spent on practice management and development. Jo says you should also always factor in self-care.

You should always consider who is the best person for the job; consultants can waste a great deal of time undertaking activities where they lack the skill set to effectively complete. Jo says it is just as important to know what you know and what you don’t know. It is important to complete those tasks that you have a complementary skill set, to effectively perform the task at hand. However where you lack the necessary skill set you should outsource. Jo recommends “if you are considering becoming a consultant you need to gather the people you will need at the outset”, Jo says get your solicitor to look over the client contracts, consider what insurance will you need, who will complete your Business Activity Statement, will your book keeping generate and distribute invoices, finally you also need to have at least a good 6 months income before you start, so you are not desperate to get clients on board as this can take time.

The pitfalls of consultancy

It is quite possible get bogged down doing bits you really love and ignore the bits you don’t says Jo. You need to make sure you evenly distribute your time according to the proprieties of the business.

Another common pitfall says Jo is not billing for all hours worked. Price structure is important, you must set a price structure that reflects not just the face-to-face hour with the client, but incorporates everything that contributes to the hour, for example putting client packages together. Further to the pricing structure it is important to consider setting boundaries for late and non-paying clients.

Why would a business use the services of a consultant?

These days it’s quite the business norm to out source special projects and tasks to those with the expert knowledge and experience. It is far more practical to hire someone who has a great breath of experience than try to manage a project through inexperienced staff, or yourself. In some circumstances a business may need to hire a consultant to find the source of a problem. A consultant may also be hired to support the staff, particularly if a business is under great pressures due to work commitments. Finally businesses have found it is far more cost effective to hire consultants when they are needed, rather than hiring full-time employees, businesses save on overheads and additional expenses by not having to pay benefits for consultants they hire.

Of late there has been a new category of consultants emerge, these consultants specialise in assisting organizations / businesses with the transition of women in and out of maternity leave. With the growing number of women returning to the work force, businesses are hiring specialist consultants to cope with the transitional change within their organization.

A consultant can provide an objective and unbiased point of view or opinion. Quite often businesses are too close to be objective and it takes some one from the outside looking in to see an alternative direction or solution.

Recent business trends have resulted in a high level of downsizing and restructuring consequently businesses now employ the services of consultants to fill any gap in skills and expertise.

There are a host of other reasons why a consultant could be hired, far to many to list here. I suspect as times change more and more businesses will continue to outsource work because it is a more cost effective and efficient means of successfully executing an important project.

How do I know if I have an area of expertise?

With the number of people in consulting roles, one could assume any one could be a consultant; after all nowadays we even have “life coaches”. If you are not sure if you could be a consultant, consider your skills and areas of expertise. What do you have to offer? For example, if you specialised in direct marketing campaigns throughout your career and have credible accomplishments listed on your CV, then you could consider consulting in the area of “direct marketing”. In essence a consultant has the experience, knowledge and resources which businesses and individuals are willing to pay good money for. Look at your own working life and consider what you have learnt and experienced, now consider how you could turn this valuable expertise in gold, something of value to another business or individual.

What types of consulting businesses are there?

Women return to work co-ordinator / integration services
Accountant, i.e. MYOB trainer
Marketing strategy advisor / Direct marketing
Supply chain management
Advertising Advisor
Business coach
Public speaking coach
Change Management Consultant
Strategist
Behavioural coach
OHS Consultant
Quality Assurance – ISO standards
Career counselling
Personal counsellor
IT consultant
Website consultant
Human Resources
Business Analyst
Legal Counsel
Time Management Consultant
Organisational Consultant
Payroll Management Consultant
Public Relations Advisor
Research and Development Consultant

Your target market

You need to be able to accurately detail who is going to be willing to pay for your services and or expert advice. It’s simply not enough to believe your expert knowledge will generate sales. You should be able to list realistic potential clients; taking into account the size of the businesses you intend to consult to, large corporations may already have their own team of staff and small businesses may not be able to afford your services. Further more securing the business of larger corporations may result in the need for additional resources, however this is entirely dependant on the service you are offering.

Once you have identified who you intend to pursue, considering approaching two to three potential clients to “pick their brains”, you need to find out where they such businesses need help, how best to approach potential clients, what sort of sales pitch should you develop. If you find you can get a foot in, try speaking to the various associations, who head some industries, to see if anyone is able to provide further advice and direction. As pointed out in Show Mummy the Money, it is very important to do your research first.

Find out if your target market is affiliated with any associations, networks and so forth. It would be a good idea to position yourself and your business where your target market frequent. A good fisherman goes where the fish are biting.

As continually purported by Show Mummy the Money, it is important before you jump into any new venture, you need to do your research!

Jo Darby

Coaching. Consulting. Workshops
Productivity Specialists

Phone: 61 3 9853 7966
Mobile: 0409 316 214
Email: jod@prioritypartners.com.au

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