Becoming a Consultant

By: Bob Skladany | Source: AARP.org | March 9, 2009

Question: How can you tell when someone is between jobs?
Answer: He says he’s a consultant.

Now I can say this because I have actually been a consultant for 19 years of my career. And for some part of that time I was between jobs.

The stereotype of a consultant is a person in a somber business suit, rushing through an airport, clutching a briefcase, waving one arm and talking through a cell-phone earpiece, all the time looking like a crazy person talking to himself. The truth is, that stereotype is accurate. 

The 40-ish managing partner at the major consulting firm where I worked until age 50 told me, “Look around and you won’t see many old consultants; this is a young man’s game.” Now, I could have taken this personally and become upset. I didn’t, because he was right. Spending 70 hours a week as a traveling consultant was the most demanding and draining work I’ve ever done.

What Is a Consultant?
Let’s start with a more formal definition of a consultant: A consultant is an individual who possesses and provides knowledge, skills, and other capabilities that are of value to another person or organization seeking to benefit from the expertise. 

At one extreme is the management or technology consultant who travels to clients’ locations and engages in complex and costly assignments. At the other extreme, there are personal-service consultants who advise home owners and small businesses. They almost never travel overnight and may be involved with anything from landscape design to event planning, knitting, or designing a Web site.

Could I Be a Consultant?
If you are thinking about a new occupation or a way to supplement your income, consider offering your unique talents, knowledge, skills, interests, and assistance as a consultant.

Consulting, done on your own terms, may be just the right thing for an age 50+ job seeker, a worker displeased with having a traditional job, or a retiree thinking of resuming work.

It’s a very good time to consider becoming a consultant. There are more than 11 million people looking for work, and about 4 million open jobs. That’s about three people for every available regular job, and it’s likely to get worse before it gets better. Hesitant to hire new workers, employers are turning to temporary staff, contract workers, and consultants.

The key to being a successful consultant is possessing some expertise and identifying an adequate number of prospects who want or need your special knowledge. Once you’ve identified potential clients, you will have to promote your consulting services to the kinds of individuals and organizations who need you. You should know how to work independently to complete the work or assignments, maintain a positive client relationship, and finally, invoice and collect your fees.  These are learned skills.

As a consultant, you’re basically managing a small business offering you as the product. You may have valuable expertise, but you must be willing and able to develop business, close sales, do the work well, and handle all the administrative details—including invoicing, collecting, filing estimated quarterly tax payments, and keeping the accounting books for your business. A comprehensive self-help book for new consultants is “How to Become an Expert in Your Own Field,” by Hubert Bermont.

Why Do People Become Consultants?
The best part of consulting is that you work independently, have tremendous freedom, depend mainly on your personal efforts, and can be directly accountable for your success. 

The worst part of consulting is that you work independently, have tremendous freedom, depend mainly on your personal efforts, and can be directly accountable for your success.

Consulting is not for everyone. Be honest and ask yourself if you can really do it and do it well enough to earn a living. 

The most frequent reason why independent consultants fail is not because of a lack of expertise or desire. It’s because they don’t generate enough clients and revenue. Doing is different from selling.

The Most Fertile Areas
Some occupations and areas of expertise lend themselves to consulting better than others. The areas of greatest opportunity include information technology, general management, marketing, training and development, human resources, public relations, advertising, engineering, health care, and the sciences. Organizations are accustomed to employing consultants in these fields. 

Formal education and proven experience in these fields are basic requirements. It’s not practical to “jump into” fields that are not your primary profession or occupation.

Some “Nuts and Bolts”
If you’re going to begin consulting in a professional field, you’ve got to determine a billing rate. This is how much you’ll charge for an hour of your time. As an independent, novice consultant, the tendency is to set your rate too low. As a rule of thumb, take the annual income you earned when you worked full time in your profession or occupation. Calculate how much that would be at an hourly rate (divide your annual earnings by 2,080 hours if you have a typical, 52-week, 40-hour job), and double or triple that amount to arrive at a reasonable hourly-rate range.

When proposing on assignments, calculate the required time as accurately as possible, multiply by your hourly rate, and quote the total fee for the assignment. Until you get some experience, try quoting your work on a “fee not to exceed” basis, which provides your client a maximum charge. If the work requires less time, reduce your charges. If it requires more hours, you have to “eat” the extra time. You’ll get better at pricing projects. If a client asks for your hourly billing rate, confidently and firmly state what it is. Don’t be shy, don’t apologize, and don’t offer to reduce it unless you feel you’d lose the project. Be firm. If you don’t believe what your time is worth, how will you convince someone to pay you?

Other Options
There are other ways to become a consultant. Consider contract work through staffing companies that specialize in placing people in short-term or temporary assignments. That way, you don’t have to find the clients and sell the work. The only drawback is you make less than if you were an independent consultant.

The Internet has also opened the consulting field for individuals in virtually any area of expertise.  LivePerson is a Web-based service enabling individuals who register to offer their expertise directly to clients, either on the phone or online. You can create an account and describe your areas of expertise. Keep the site updated with your availability. Potential clients go to the site and review registered “experts” to suit their needs. If you’re selected, the client pays by the minute to communicate with you. LivePerson.com does all the administration, and you are paid at a fixed, per-minute rate.

Isn’t the concept of LivePerson.com great? You could sit by your phone, and when a client calls to ask you about, let’s say, the best yoga exercises, how to prepare a tax return, when to fertilize a lawn, how to file a lawsuit, or whatever your specialty, you earn a respectable consulting fee. The more valuable your expertise, the higher the rate. It’s pretty simple.

You can also consider placing a small classified ad in your community newspaper describing your expertise. Or create a Web site describing your background and special abilities. Remember, consulting can take lots of paperwork. You can become a tutor, a freelance writer (though beware of fraudulent offers), a cooking instructor, or an event planner. 

There are many ways to capitalize on your unique knowledge, skills, and abilities. We all have some special abilities that someone may be willing to pay for.