The New Business of Consulting

The Basics and Beyond

Elaine Biech

• Publisher: Wiley
• Year: 2019
• ISBN:
  9781119556947
• Edition: 1
• Topic: Business
• Subtopic: Consulting
• Index: Business

Everything you ever wanted to know about consulting—a practical roadmap for aspiring entrepreneurs

Seismic changes occurring in the workforce are leading to more and more people entering the world of contract, freelance, and contingency work. Rapid changes in demographics and advances in technology have led companies and talent to engage in profoundly new ways and consulting is one of the keys to success.

The New Business of Consulting is authentic and practical, and shares the knowledge and skills required to start and grow a successful consulting business. From how to make a smooth career transition, to how to determine a consulting fee, to how consultants inadvertently create a bad reputation, it covers everything you need to know to thrive and flourish in this competitive field.

• Covers contemporary topics, such as how to achieve success in the gig economy
• Discloses a reliable technique to land the clients you want
• Presents options to help you balance your life and your business
• Prepares you for naming your business, managing critical financial issues, and building a client relationship
• Shows you how to take your income and impact beyond working as a solopreneur

The crucial start-up days of a consulting business may be frenetic and fraught with questions. This new edition provides sanity and answers all the questions. It includes practical tools, templates, and checklists that you can download and implement immediately.

1
So You Want to Be a Consultant

A person who never made a mistake never tried anything new.

Albert Einstein

Kayla was livid. She really wanted to do stellar work, but how could she when she never knew what was happening? This was the third time in a month that she had to hear bad news about her department from Amy, who was in the contracts department, instead of from her own manager. Didn’t he understand that anything less than total transparency was not acceptable to her?

She started this job four years ago, right out of college with her MBA and the expectation that she would use what she learned and continue to learn and grow. But that hadn’t happened.

She had been turned down four times for the additional training she wanted. Granted, the first time it may have seemed like a selfish request because the only rationale she provided was that “she wanted it” and she hadn’t tied the content to her job. But every request after that was directly related to problems and issues that occurred on the job. The last time, she even put together a cost-benefit analysis that clearly showed that what she would learn would save the company money. Instead, her manager told her to wait because next year she would be in line for the leadership development program. He seemed to be shocked when she told him she wasn’t that interested in being a leader, and that she was more interested in being a top performer and expert in her field.

Leadership wasn’t for her. The previous month, the CEO had signed off on the new innovation policy with, “I’m interested in hearing all your ideas. Come see me.” But when she went up to the fourteenth floor, she was turned away by the chief of staff, who said that her actions were improper. Leadership was hypocrisy! She didn’t want any part of that.

Kayla wanted to keep learning. Heck, she’d settle for some coaching, but her manager didn’t seem to have time—or the inclination. After all the articles that had appeared about millennials, didn’t he get it yet? Without figuring out what she valued, he didn’t stand a chance!

Why was she here? She disliked the slowness and bureaucracy; she didn’t want to be “managed.” She wanted a job that had purpose and meaning and that connected directly to the company’s mission. She’d been thinking a lot lately—perhaps the corporate environment didn’t suit her. Then again, she’d heard from some of her friends who had struck out on their own and found out that “doing what you love” doesn’t always put food on the table.

But she’d been studying the whole freelance, gig thing for over a year and found that consulting might be different. She pulled out her “How to Rule the World” journal and perused some of the pages: write a business plan, buy liability insurance, charge what you are worth, choose a good name, clarify your niche, select an accountant, develop a marketing plan, plan your transition, get a federal EIN, check on a city license. Well, there certainly was enough there to keep her busy.

She knew she would love the freedom of being her own boss, but she had an enormous student loan to pay off. If she could only figure out how much she might be able to make and a few more details about how consultants charged. She read a Randstad report when she was researching the company’s agility article that more than half of the workers surveyed believed they could make more money as consultants than in their current jobs. Well, money wasn’t everything. She wanted to do something more enjoyable, too. And she certainly wasn’t getting any younger; she’d be 30 next year! Besides, she deserved to be happy! Maybe her friend Mason would know. He knew everything. She’d text him now. Maybe he could meet her after work.

■ ■ ■

Do you admire consultants who zip into a company, capture everyone’s attention, accomplish in days what you’ve been struggling with for months, and waltz out with a big check?

Ever thought you might like to be a part of that glamorous profession? This book will help you determine whether you have what it takes to be a consultant, as well as whether the consulting profession offers what you desire as an individual.

What Is Consulting?

Consulting is the process by which an individual or a firm assists a client to achieve a stated outcome. The assistance can come in the form of information, recommendations, or actual hands-on work. A consultant is a specialist within a professional area who completes the work necessary to achieve the client’s desired outcome.

Whether companies need help developing an agile workforce, increasing competitiveness, reducing turnover, increasing engagement, installing a new computer system, building an executive team, breaking into the Chinese market, or solving almost any other business problem, they can call a consultant to assist with the effort. The organization requesting the assistance is usually called the client. The term can refer to the entire organization or to the person who actually made the call.

Consulting is not a descriptor that identifies a profession in itself. Unlike doctors or accountants, highly skilled consultants come from a variety of backgrounds. A qualifying adjective may be required to identify the form of service or the area of expertise, for example, management consultant, engineering consultant, or performance consultant. Although consulting is not a profession by definition, it is often referred to as “the consulting profession.” For the sake of convention, I will refer to the profession in this book.

The actual work of a consultant can vary quite a bit, depending on the area of expertise offered. Every consultant must be a subject-matter expert in some area. The expertise might be in the form of general content such as management development, organization development, leadership, or family business. Expertise might be in a specific profession, such as engineering, cybersecurity, writing, marketing, or a thousand others. Expertise might also be in the form of how the consultant delivers services, such as facilitation, training, strategic planning, or team building.

Even after you determine an area of expertise, you may need to select the actual work method you wish to conduct. For example, if you decide to focus on the talent development field, you could develop and deliver your own material or subcontract material development to another person while you deliver it. You could design material for others, or you could deliver others’ materials. You could even be certified to deliver others’ courses, especially for the large training supplier firms.

If you are a generalist, such as a management consultant, you will need to determine whether you will focus on a specific industry, such as manufacturing, banking, aerospace, military, or hundreds of other industries.

Why Consulting Now?

Like all businesses, consulting has its peaks and valleys. Consulting grew most rapidly, at double-digit rates, from the mid-1970s until 2000. When the economy weakens, consulting generally declines as well—especially in large firms. An independent consultant can take advantage of declines in a way that large firms cannot. As a small entity, a consultant has the opportunity to design the future. As an independent consultant, you can make changes faster than a large 10,000-employee firm. If organizations no longer need your expertise to nurture innovation, but need someone to help them plan for their high retirement rate, you can make that switch. Wayne Gretzky, the hockey player, is famous for claiming that his success is due to skating to where the puck “is going to be.” Consultants too can skate to where the work is going to be. During a downturn, many consultants stick with doing only what they know, as opposed to what clients need.

Over the past 15 years, growth has been healthy, though few believe the rate will mirror the growth rate in the last century. As a consultant, you can economy-proof your business by providing services to at least a couple of industries that are rarely affected by the economy, such as healthcare, pharmaceuticals, and pet products. As compared to other industries, consulting continues to be one of the fastest-growing professional areas.

Why Get into Consulting? Why Now?

Turbulent times have increased how often consultants are used to help organizations make their way through the processes of implementing technology, going global, improving processes, applying lean principles, and negotiating mergers. The consulting projects have increased in dollar amount and duration. Since the early 1990s, large-scale projects that cost more than $50 million and last over a five-year period are common. As Charles Stein (1994) of the Boston Globe states, “Once upon a time, consultants were like dinner guests: They came for a brief visit, gave advice, and went home. Now they are like guests who come for dinner, move into the spare bedroom, and stay for a year or two.”

Business Trends

Two trends in the business world continue to bring tremendous implications for consulting. First is the trend toward a need for organizations to be more agile. Corporations will continue to hire more temporary professionals to a...