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Consulting is tougher than you think

Romantic visions aside, consulting is not all it's cracked up to be

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Most IT people have a romantic vision of what the consulting lifestyle is all about.

What does it take to be a consultant? Consulting is about knowing who to sell your ideas to, coaxing people to think creatively about solutions, and working with many different people to follow through on those ideas and achieve results.

The product? Your own credibility and knowledge, which builds trust with the client. But it also means being able to say “no” when asked to do something outside of your area of expertise.

Consulting also takes advanced communication skills. You have to be able to articulate your knowledge by writing and speaking in meaningful ways, not just throwing around a lot of jargon. Selling projects comes easily for many consultants, but the most successful ones are also excellent communicators.

Beyond being glib communicators, consultants must know what they’re talking about. Consulting is about knowledge: having the industry or functional experience to be considered an ‘expert.’ Knowing about certain business processes doesn’t necessarily qualify you as an expert. Consultants earn their money by translating experience into action. Too many consultants are accused of stating the obvious. Telling people how to do their jobs better is not consulting; helping people create solutions to problems is the true nature of consulting practices.

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Simply, consulting is a process. It’s demonstrating your methods for reaching conclusions. The mystery behind consulting is no mystery. Most solutions are rooted in an analytical process. Surveys, in-depth interviews, published research and an understanding of financial models for organizations are a consultant’s tools.

Making the transition from full-time employment also requires time and thought.  Most people take core skills – programming, web design, and data collection – and discover there’s a market for such services outside of their regular job. Usually it starts from a colleague’s referral. Word-of-mouth is the typical selling process for consulting services.

If you find yourself being asked to do such things outside normal working hours, chances are good that similar business opportunities also exist out there. The key, however, is not quitting your day job cold turkey without building up the side business.

It could take months, even years to get a consulting business off the ground. But developing an existing client base, even a small one, makes the transition much easier. Reach out to your entire network of colleagues, associates, and ex-employers in your search for clients. Consulting is a business requiring hard work to maintain key relationships.

Cold calling is usually a waste of time because calling on a company in which you’ve built a connection makes more sense because the client doesn’t need as much pre-selling. Remember, credibility is a consultant’s best calling card.

What do you charge? While a touchy subject (fees, after all, can vary dramatically), most consultants charge by some time-based unit (hour, day, and week). It’s a good idea to research the market and find out what similarly skilled advisers charge.

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Normal hourly ranges for consulting can vary from $75-$800-plus, depending on the service. You can run into price sensitivity with IT consulting because some services are very generic (i.e. web design) while strategic technical advice is priced higher than generic technical consulting.

While it’s important to charge appropriately, price is rarely an issue when you can demonstrate value. Many consultants avoid hourly rates and charge by project. This is particularly true in IT where the deliverable – an application program, a web page, etc. – is tangible.

Many first-timers make the mistake of under-charging or negotiating reduced rates. But you’re not in the widget business where volume discounts apply. Rather than apologize for your fees, be prepared to define value.

Finally, always get fees in writing as part of proposal and also detail whether expenses are charged back to the client or included in the fees.

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