The Playbook to Independent Consulting
This article has been created to act as a playbook for navigating the sometimes difficult waters of becoming an independent consultant and setting up your own business as a management consultant or digital expert.
One article may not provide in-depth tactics for each step of the way, but there are many informative articles in the Consultport blog section, covering every topic relating to independent consulting. I will provide links to some of them throughout this article. You can also subscribe to the blog to remain updated on topics of interest to both consultants and companies.
Fortunately, there are multiple other articles on the Consultport blog section, and I will provide links for you to get more in-depth information. You can also subscribe to the blog so that you can remain updated on topics of interest to both consultants and companies.
You will have your reasons for wanting to become a freelancer. The most typical are wanting to be your own boss, working on projects that interest you, having the possibility of unlimited income, and a better work-life balance. But whatever your circumstances, there are certain commonalities in the following areas:
- Getting started
- Getting work
- Getting paid
- Getting bigger and better
Another commonality is best summed up by the author, Jim Butcher: “You can’t plan for everything or you never get started in the first place.”
The benefit of being an independent consultant is that you are the boss. This also means that you must ensure that all aspects of your business are covered. There may be more elements to this than you anticipate:
- Legally registering your business
- Setting up a workspace
- Bidding for work
- Delivery and quality assurance
- Accounting, invoicing, taxes, and benefits.
It is easy to drop the ball.
Establish a project management system
The answer is to manage your freelance business as you would manage any other major project. Have a proper system and monitor activities, dates, and timelines. This may be as simple as Google Sheets or the free versions of ClickUp, Trello, or Wrike. What's important is that you are as systematic in your business as you are about your client's projects.
There is a temptation at the start to work for free or just-about-free to get your foot in the door. Sometimes this is the only way but be sure that everyone knows the reason for the low consulting fee and when it will change.
When I decided to become a freelancer, my previous employer became my first anchor client. If you don't have that benefit, prepare to spend most of your time marketing yourself and looking for work. This is why it is essential to have a bit of runway when you first set out – you need enough cash reserve to cover a few months of no income.
The rule of thumb is that even once you are established, you should spend 50% of your time in marketing – but be prepared for it to be longer at the start.
Identify your market niche and build a brand
One of your first tasks will be to decide what your interests and talents are and what niche market you will target. You may not be an expert when you start – although you will quickly have to improve your skills – but you do need to be clear-eyed in evaluating the market. You may have a great idea and skill set – but they don't matter if no one is willing to pay for them.
Some people may be willing to pay for what you offer – if only they knew about it. So getting yourself known through building a personal brand and actively marketing your consulting business are important steps in getting started. You can find more information about how to do this by following our links. In summary, the steps involve identifying your purpose and your unique value proposition, then developing the marketing material such as logos, social media channels, and a consistent message about who you are and what you do.
The good news is that online consulting platforms do much of this work for you. It is simpler way for you to be visible; clients can easily find you and engage your services; some platforms (like Consultport) even actively put your name forward to prospective clients if they believe you have the appropriate skill set.
Network and stay in touch with others
Networking is a critical component of getting known. It will form part of your active marketing strategy, but it is more than that. Independent consultants can be very lonely. So, stay in touch with previous colleagues and join freelance communities – you can find them on platforms such as LinkedIn.
A powerful way to network is to register on an online freelance consulting platform. You are not alone, and you have the platform's reputation to back you. They do the marketing and find projects that match your skills base. They will advertise the feedback from your clients and help you grow your exposure and your portfolio. Some even handle the admin, including setting up freelance contracts and doing the billing.
One of the main attractions of becoming a freelancer is the potential to make more money. However, drawbacks are uncertainty about pricing and whether you will be paid at all. You may be looking for a work-life balance, but you will not be paid for any time you are not working.
Setting your consulting fees
One of the difficulties of getting started is recognizing that your expertise is a commodity to be sold, knowing what it is worth, and working out how to price it. Setting a consulting fee is tricky at the start.
Some of the approaches you can take are the following:
You can determine how much it will cost you to complete a task and then add a profit margin to it. This may be more applicable to those selling goods than time-based services. If you choose this method, remember to adjust your consulting fee as you become more proficient.
Market rate pricing
Pricing according to market rates means knowing what others are charging for similar services. If you are associated with an online consulting platform, this task may be easier as the rates of other consultants are visible. You can also distinguish the rates of newcomers (like you) vs. more established players.
You might decide to set your consulting fee based on what you believe your work is worth. I remember using the amount I'd earned in my corporate job as the basis and adding some for expected downtime. This was a bit naïve, and I seriously undervalued my time, but it was a start.
Whatever method you choose, remember that your view of what you are worth must be supported by what a client is willing to pay.
Getting your invoices paid
Even if you have priced yourself correctly and have landed and delivered a project, this is not a guarantee that you will be paid. I set out the difficulties in a previous article for new freelance consultants:
- You started working without a formal purchase order – and the accounts department won't pay without it.
- You haven't specified interim delivery milestones, so it is difficult to submit invoices as you go along.
- Your invoice is being held up by the client's incompetency, chaotic systems, or cash-flow problems.
Some steps that you can take include the following:
- Be clear about payment criteria. Don't wait for the client. You suggest milestones and terms - for every project and in writing.
- Make sure you understand and comply with the client's payment process from submission of invoice to final payment.
- Be nice to the people in the payment pipeline. It may not be fair, but they can put your invoice on hold if you are unpleasant and demanding.
- Say no. Don't start without the purchase order. Stop work if they don't pay. I know this seems to hurt your client too, but you are not a volunteer.
- Leverage the power of freelance consulting platforms, especially if they have escrow systems. They will bat on your behalf if you are having problems with a client.
Getting bigger and better
You may be a seasoned professional with a long history in a large corporation or a consulting company and have decided to go out on your own as an independent consultant. Or you may be fresh out of college or university and want to become a freelancer.
For both, my advice would be the same: have an abundance mindset. There's enough to go around for everyone. As counter-intuitive as this may seem at the start, the more you share your knowledge – and even your leads at times – the better and more successful your own business will become.
Know when to ask for help and when to help others. Sometimes you need advice about how to approach a client's problem. Or you may have hit a brick wall and are having proposal after proposal rejected. Perhaps you need help with marketing or with setting up your invoicing system. There's always someone who knows what to do – or, at least, will listen to you. And, sometimes, you are the one who can lend a hand and share your knowledge.
How to set up an independent consulting business
This article has given my views on some of the how-to's in your playbook as an independent consultant. It has covered some of the practicalities of getting started, getting known, and getting paid. It has touched on the thinking that will help your business grow, especially the need for an abundance mindset.
I have throughout the article pointed to the power of the online consulting marketplace. When I decided to become a freelancer, it didn't exist. If it had, I'd have joined immediately.
Becoming a freelancer and setting yourself up as an independent consultant can be incredibly rewarding. Following some of my advice will hopefully make it easier too.