More and more people are realizing every day that the skills they have can be used to power their dreams through consulting. There are a lot of different options when it comes to consulting, and I want to show you how to start down that career path today with expert insights from a consultant who has been successful for well over a decade.
To help out with this article, I talked with my friend Pamela Slim, an award-winning author and writer for Escape from Cubicle Nation. The website is a business and career development blog that she’s been running since 2005.
She’s also worked as a consultant for more than a decade — so she knows her stuff. I’ve broken this topic up into the following sections:
- Choose your adventure (advantages and drawbacks from 4 of consulting’s biggest opportunities)
- Choose your niche (how specialization makes more money)
- Find your first 3 clients (using these 6 proven systems)
- 3 sure-fire ways to ensure you charge what you’re worth
- Pro-tip #1: What skills are necessary to become a good consultant?
- Pro-tip #2: 5 stupid mistakes of new (and sometimes very experienced consultants)
Throughout the article, she’ll be weaving in and out to give her perspective on certain aspects of consulting. Each of her sections will start with “From Pamela” to avoid confusion.
Let’s get started.
Choose your adventure (advantages and drawbacks from 4 of consulting’s biggest opportunities)
Before jumping in with both feet, it is important to understand what you are getting into, and how to avoid stupid mistakes.
For context, there are a number of different types of consulting businesses, with some advantages and drawbacks in each:
Advantages: Very well-developed and defined consulting methodologies, ample work, clear training programs, and career paths and bias towards young, smart workers.
Drawbacks: As huge companies, they can have lots of bureaucracy, politics, and lame management policies. As a young trainee, you often have to slog through years of totally insane hours in sometimes less-than-ideal conditions (I have seen many young consultants smashed together in a conference room like sardines pouring over reams of paper). (Unrelated trivia fact: John Legend worked for BCG before launching his music career.)
“Boutique” consulting firms
A handful of specialized experts in particular industries or business problems. These firms are much smaller than the Big 5, but often have interesting work.
Advantages: More direct access to the senior consultants, which provides great mentoring opportunities, more client contact, less bureaucracy.
Drawbacks: Less infrastructure, fewer opportunities for broad exposure to many different businesses. This article, written by someone who works for a boutique firm, gives more specific examples.
Consulting divisions of product or service companies
IBM or Oracle are examples of these. These tend to supplement and hawk the products of their parent company, but do involve some more broad-based consulting projects.
Advantages: Similar to their Big 5 counterparts, they have well-developed methodologies, training programs, and career paths.
Drawbacks: Ditto on bureaucracy, politics, and lame policies. You also may not feel comfortable force-fitting products in a consulting solution if they are not the right solution for the customer.
This option is where you hang out your own shingle and go after clients yourself. You can specialize in specific things like web strategy or marketing advice or human resources.
Advantages: Total creative control, ground-up learning about all aspects of starting a business, direct work with clients, great learning opportunities, all the profits for yourself.
Drawbacks: Having to create everything yourself can be overwhelming. If you don’t have much experience, even if you are really talented, you may have trouble convincing people to hire you. You have to constantly market and sell your services at the same time as delivering the work.
Thanks for the breakdown, Pamela.
What do you notice about the options available to you?
Hint: Only one of them allows you to be your own boss.
While working with a consultant firm or within a company offers many advantages, we recommend becoming a freelance consultant. Not only can you control your own hours and workload, but you can also scale your hustle to earn you even more money.
If you want information on how to snag your dream job within a consulting company though, here are some of our best resources on career development:
- How to find your dream job. This is my three-week boot camp on applications, resumes, interviews, and negotiations (i.e., everything you need to know about getting your dream job).
- How to stand out to hiring managers. Learn how to decommoditize yourself with the Truffle Principle.
- The 80/20 guide to finding a job you love. My 46-minute video on using the 80/20 principle for your career growth. That’s right. It’s the length of an episode of Black Mirror.
At IWT, we’re all about freelancing though. That’s why I want to show you how you can get started consulting on the side — and that starts with:
Choose your niche (how specialization makes more money)
Your niche is going to be your focus as a consultant. It will determine your clients, work, and even how much you can charge.
“But why would I want to limit myself? Wouldn’t I get more work if I open myself up to more people?”
That makes sense in theory. After all, if you’re too focused you might cut out some potential clients.
However, you’ll actually be able to find more clients and even charge more for the work you do if you’re niched down.
For example, which fitness coach do you think will earn more?
- The coach who says that he’ll help anyone feel and look better
- The coach who only works with middle-aged men to get six-pack abs
The second one is going to earn much more than the first coach. That’s because that coach is specialized. He knows who his clients are and offers a clear goal: To get six-pack abs. As such, he’ll attract more customers.
So think about what type of consultant you want to be. What do you know and know well? Some fields to consider:
- Social media
- Sales funnels
- Human resources
There’s no one answer to this question. The important thing is for you to pick a field you’re interested in and get started. You can always change it later.
Once you’ve picked a targeted area of interest, you’re going to niche it down even more by taking a look at your target market.
This will be your prospective clients. Ask yourself:
- What industry are they in?
- What are their services?
- How do they use copy / IT, manage their team, use social media, etc. currently?
Once you have the answer to those questions, you can come up with your niched-down role.
Here are a few examples:
- Management consultants for nursing homes
- Social media consultant for five-star restaurants
- Email funnel consultants for SaaS businesses
Spend some time coming up with a good niched-down target market. Once you’re done, it’ll be time to actually find your first client.
Find your first 3 clients (using these 6 proven systems)
Remember: A freelance “business” without paying clients is just a hobby.
A lot of freelancers get very intimidated at this notion. After all, you have to learn how to sell yourself and market your skills — something that can be very scary if you don’t have the right systems.
Thankfully, I have six proven systems to help you find those clients. Let me touch on them quickly now:
- Craigslist. That’s right — the site where you can try and get live duck parties is a great place to find your first client by leveraging a proven psychological framework.
- Networking events. Networking events don’t have to be awkward and scary mixers. They can be a solid place to find “connectors” (i.e. people who will connect you with leads).
- Where your clients live. No, don’t go to their house. Instead, go to the places online and IRL where your clients might frequent (e.g. Facebook groups, subreddits, meetups).
- Referrals. This is a great way to get higher-paying clients. Referrals can come from your connectors, friends, or even your family.
- Cold email potential clients. With a proven script, you’ll be able to craft an email that’ll have your leads salivating for your work (more on this later).
- Industry-specific job boards. These are listings that are specific to whatever industry you’re looking to work in.
If you want more on these areas — as well as the exact scripts to utilize to find clients — be sure to check out my article on how to get clients for more.
3 sure ways to ensure you charge what you’re worth
There’s no one and only way to price yourself. That’s why new freelance consultants often get psyched out by pricing.
Charge too little and you’re undervaluing yourself.
Charge too much and you might lose out on potential clients.
Luckily, there are a few good rules-of-thumb on pricing if you’re a beginner:
- Drop Three Zeros Method. Simply take your ideal (read: realistic) salary, divide it by two, and then drop three zeros from it. Voila, you have your hourly rate!For example, say you’d really like to earn at least $80,000. Divide that by two, take out the three zeros from the end and you now have your rate: $40/hour.
- Double your “resentment number”. I love this one because it’s both really interesting and effective. Ask yourself: What’s the lowest rate you’ll work for that’ll leave you resentful of your work? Say you’ll work for $15/hour at the VERY LEAST. Just double that number so now you’ll earn $30/hour.
- Do what the next guy does. This method is incredibly simple: Go to Google and search for the average hourly rate for whatever service you’re providing. You’ll get a good sense of where to start when you’re charging your clients.
Once you begin charging your clients, you can start to take on more or less work until you earn the amount you want and tune until you get the rate you want.
And after you earn your first $1,000, it’s incredibly easy to start dialing your prices up and charge even more money from your clients.
Start “tuning” your rates after your first few clients. Were you making $30/hour? Start charging $40 or even $50. There’s no hard and set rule for how much you should charge. Just start tuning until you find a rate you’re happy with.
There you have it: The four steps you need to become a freelance consultant.
Now, let’s go back to Pamela and take a look at the skills you need to become a good consultant — as well as look at mistakes you need to avoid.
Pro-tip #1: What are the key skills required to be a good consultant?
Some people assume that you have to have many years of work experience to qualify as a consultant. If you have either very strong natural consulting skills or very specialized expertise, you can still act in a consulting role even if you can count the number of years you have been in the workforce on one hand.
Regardless of how you “choose your adventure,” you’re going to need to develop these skills:
- The ability to view the “big picture” of an organization and see how all the parts fit together. This is often described as “systems thinking” defined here with some resources.
- Excellent interpersonal skills and the ability to relate to people from all levels of an organization. Your ability to do meaningful work in an organization is based on the level of trust and credibility you have internally. If you are working on a large project, you often have to interact with extremely technical and detailed people who have a high level of skepticism, as well as present your findings in a professional and compelling way to impatient and time-crunched executives.
- Confidence to stand up for what you believe in and the grace to admit when you are wrong. If people are paying you hundreds of dollars an hour for your advice, you need to have confidence in your ideas. But you also have to be willing to make adjustments if you learn that you may be incorrect. A good attitude is summed up by my favorite “asshole busting” professor Bob Sutton from Stanford who promotes “strong opinions, weakly held.”
- The ability to synthesize a great amount of data in an effective presentation in a short period of time. When you walk into a new organization, information comes at you like water out of a fire hose. You have to learn how to read quickly, ask great questions, review the right data and synthesize information. The more you do it, the easier it becomes.
- Knowledge of change management. Even if you are working on very technical projects (perhaps especially in this case), you need to understand how human beings in organizations react to change. Here is a quick primer to get started:
Now that you have an understanding of the different kinds of consulting roles you can play and some key skills required to be effective, I want to share some of the worst mistakes I have witnessed by consulting compadres over the years.
Pro-tip #2: 5 stupid mistakes of new (or sometimes very experienced!) consultants
- Acting like an arrogant colonist. I have seen consultants swagger into a new company with the sensitivity of insult comics. They view the existing employees as stupid and “backwards” and do little to hide their disdain.This attitude will make you more hated than “The Bobs” from Office Space and will guarantee that employees will do whatever they can to sabotage your project. You may disagree with the way the organization is run and get frustrated by the attitudes of resentful and complacent employees. But do not forget they are human beings, many with children and families that depend on them.There is nothing inherently evil with cutting staff (a very frequent recommendation of consultants); such a decision should never be taken lightly. Treat everyone you meet with dignity and respect and never, for a moment, think that you are superior by virtue of your role as an outside “expert.” You aren’t.
- Selling your words by the pound. There is an infectious plague propagated by large consulting firms that compels new consultants to create huge, incomprehensible presentations and reports. Your executive sponsors love them because they justify the huge rates they spend to bring in you and your colleagues.The problem is that these 400-slide PowerPoint presentations are decks of death for the poor souls who have to view them. Many consultants see the creation of these presentations as their core work output. This misses the point!The key responsibility of a consultant is to offer clear, timely advice and help an organization implement it as quickly and efficiently as possible for the best business results.Smart people like Garr Reynolds of Presentation Zen, Guy Kawasaki, Dan and Chip Heath and Seth Godin all argue for the simplification of business communication. You should take this advice from me with a huge caveat however: Following it will make you a better consultant but may get you fired.Much of the business world is not ready for this shift yet. So follow it at your own peril, knowing that a decade or so from now, it will be the “in” thing.
- Thinking you know everything. A good consultant exhibits two behaviors: a constant focus on learning and an open, receptive, and questioning attitude.Instead of walking in the door and saying “Here is what you should do,” step back and ask a lot of questions. “What do you do?” “Why do you do it?” “How does it benefit you?” “What gets in your way?” “What are you trying to accomplish?”No matter how many different scenarios you are exposed to, none is exactly the same and you should always learn as much as you can about the company you are working with before jumping to recommendations.
- Acting like a clone. My best friend Desiree, who used to work at both IBM and Accenture, would laugh with me at the “uniforms” we saw on young consultants. I don’t know if there was anything explicitly written in corporate policy, but everyone at Accenture seemed to wear the same black pants (or skirt) and purple-blue button-down collared shirt.What the outfit screamed was “no personality” and “member of consultant flock of sheep.” It made it easy for employees to spot them coming down the hall.Dress appropriately, but exhibit some personality. And don’t always cluster with fellow consultants like a high school clique at the cafeteria. Aim to mix with as many people as you can in your client organization: employees, other consultants from different firms, executives and rank and file service workers.
- Tying yourself to the coattails of one client. Generally, consultants are brought into an organization and sponsored by a key manager or executive. But you have to be careful to not be seen as “Suzy or Bob’s consultant.”Organizational politics are swift and brutal. If your sponsor is laid off, reassigned or quits, your head will be chopped very quickly. A better strategy is to get to know as many people as you can (per the point above) and build multiple strong relationships with those that hold the purse strings.
I hope this primer has been useful to those of you considering consulting as a career path. I would love to hear your thoughts, challenges, and questions here in the comments section!
Earn more money today
I’ve said it once and I’ll say it a thousand more times: There’s a limit to how much you can save but no limit to how much you can earn.
Whether you’re trying to scale your consulting business — or make more money at your day job — I want to help you. That’s why my team and I have worked hard to create a guide to help you earn more today:
- Create multiple income streams so you always have a consistent source of revenue.
- Start your own business and escape the 9-to-5 for good.
- Increase your income by thousands of dollars a year through side hustles like freelancing.
Download a FREE copy of the Ultimate Guide today by entering your name and email below — and start earning more money today.
Pamela Slim is a recovering management consultant who now helps corporate employees leave their jobs to start their own business. She writes at Escape from Cubicle Nation.