Three Big Questions New Consultants Need Answered

By Christopher Hawkins •  Updated: 11/20/14 •  6 min read

Very often, I will receive an e-mail from a developer hoping to go out on his own, asking “What is needed to get started in consulting?

Let me begin by telling you what is *not* needed: Permission! I say this up front because a lot of people who are otherwise qualified to go into business for themselves are waiting around for some third party to bless them. Don’t wait for some third party to validate you – if this is the move you truly want to make, then make it.

That said, off the top of my head I would suggest that you have the following 5 things in place:

a) at least 5 years of experience in your specific technical domain,
b) at least 1 year of experience working in a small agency, consulting shop, or other client services firm that is small enough for you to have been exposed to the non-coding aspects of client work,
c) good health and plenty of energy,
d) a stable home environment, and
e) customers!

Notice that I did not list things like:

All that stuff can come later – or not – and I suspect that folks who focus on these things first are more interested in “playing business” than actually “doing business”. Don’t be that person! Prioritize revenue first; the landscape of the consulting business is littered with the corpses of people who wasted their time putting “infrastructure” in place first.

Here’s a good example: when I started Cogeian Systems, I had the following:

That’s it. That’s *it*. It was enough to perform my work, contact my customers, and do research for new ones. Of course, I also got myself out of the house as often as possible, and even embarked upon a hand-written letter campaign to introduce myself to local business owners, in order to meet enough people to find projects. But as far as infrastructure goes, consulting requires very little. Please do not fool yourself into wasting time on this.

For now, work your network, shake loose some projects, and start earning money. All the rest can be handled in due time, but your #1 priority at first should be to earn actual money by finding clients and serving them well.

The next question I often hear form new or hopeful consultants is “How do I set my rates? I’m afraid my clients will push back and I don’t know how to explain myself“.

Here’s a tip: You don’t need to justify your rates if the work you’re doing is appropriate for those rates. You don’t need to explain yourself to anyone. Simply quote your rates, and frame them in terms of Return On Investment. Will your proposed project make them money? Tell them how much. Will it save them money? Tell them how much. Why do this? Because that’s the language your prospective clients speak.

Don’t be scared. Have confidence! You need to feel like you’re worth what you’re charging. In the case that a client does push back against your rate, remember that you don’t have to convince them that they must pay a higher rate than they want to – they can do what they want, up to and including declining to hire you, and you don’t have much control over that. But what you absolutely must do is make it clear that once the rate goes into effect, that’s the rate, period, and anyone who wants to keep working with you must pay that rate. If your work is truly good, and truly creates value for your clients, the rate is _already_ justified.

And if you walk a prospect, odds are you won’t be losing anyone you’ll miss.

The third question I often hear is “what kind of horrible mistakes do I need to watch out for with my consulting business?“.

I can only pick one? The first thing I would tell you is, don’t spend much emotional energy being concerned about making mistakes.  You will make mistakes; it is a certainty, so make peace with it.  We all make mistakes.  That said, you don’t have to make the same mistakes the rest of us make.  You don’t have to suffer the way some of us long-timers might have.

With that in mind, I already mentioned that “Playing business” instead of “doing business” is a big one. Charging too little is a HUGE one. But I would say that not getting help early enough is probably the worst mistake, because bringing in help allows you to avoid a lot of problems.

Being overbooked is a condition that has tentacles, reaching out and smothering other aspects of your business – your marketing, your cashflow, your support. If you bring on help – even part-part-time help – the instant you have sufficient revenue and deal-flow to do so, it will free you up to keep one hand on the steering wheel of your business at all times. Otherwise, you’ll end up with both hands being ocupied by desperately typing away at your keyboard trying to keep up with project work. At that point all you have a is a job. Trust me, I have been there, and it took hell to dig myself out of that particular hole.

Definitely get help early. It will buy you time to do big-picture things like lining up new jobs & keeping an eye on cash flow. Trust me, these things do not sound interesting but they will absolutely make or break you once you’re out on your own.

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