I hear it all the time. People decide that they are going to start their own consulting businesses. In challenging economic times such as we are currently experiencing, the impetus is often job loss. Other times it outgrows that good idea that people have that they know will be embraced inside the business community. Whatever the driver, too many people leap into consulting without a thorough appreciation of what they are getting into.
I am not going to spend a lot of time on the things that you have no doubt heard time and again about starting a business. The stuff about having a business plan, sources of capital and so on. Rather I’d like to focus on some basic realities of launching a consultancy that many people simply do not consider.
One of the biggest misconceptions I see is the “consultant as a bridge to my next job” strategy. Lots of business people see a gap in their resume as anathema and decide to close it by becoming a “consultant.” They have no long term desire to build a business or consult, they just want to show employment continuity and earn a few bucks in the interim. But it is extremely difficult to conduct a job search and launch a consultancy. They are routinely out-positioned by real consultants who have a story and track record and so they rarely get work. Plus, the strategy is transparent to potential employers, who have seen it time and again. Not a good idea to be a pretend consultant.
The second big misconception is that a “great idea” will lead to success, once the world is introduced to it. Might could be, as they say in New Hampshire. But there is no shortage of good ideas out there. The challenge is making your good idea known and actionable to your target audience, an audience that is being inundated with “good ideas” daily. That’s where marketing and salesmanship come into play.
Which leads into the next big misconception. I have heard it time and time again. ” I could be a great consultant if only I did not need to do so much selling.” If you can not sell, you can not start your own consultancy. Period.
There are other, even more basic misconceptions out there. As obvious as it may seem, many people fail to consider that having their own consultancy is fundamentally different from being someone else’s employee. For instance, as an independent consultant, if you do not work, you do not earn. There is no such thing as sick pay, vacation pay, bonus pay, service awards or gold watches after 50 years.
These misconceptions and others lead people down a path that they are ill prepared for. They struggle and quickly get discouraged. No wonder half of all new businesses fail before the fourth year. But there are rewards to having your own business that are simply too numerous to list here. Not the least of which is the sense of accomplishment you will feel from building something from the ground up.
If you are interested in launching your own consulting business, or any business, I encourage you to thoughtfully consider your actions. Be prepared and do your homework. Assess your motives and understand the fundamental differences between being an employee and being an owner. Once you are certain that you want to make the change, then move onto your business plan. Done correctly and with patience, your likelihood of success increases exponentially. Good luck.