By Wendy Mihm | Thursday February 10, 2011
I run my own marketing consulting business, and it’s been a great experience in many important ways. I’m able to set my own hours, command excellent pay, work fewer overall hours and be my own boss.
Getting established did take some risk tolerance on behalf of our family: I was without income for about 5 months while I got the venture off the ground and sought my first paying client. But the experience, the resulting flexibility, and the financial rewards were well worth it.
So if you’re interested in making the jump yourself, here are five tips for starting your own consulting business.
1. Decide whether your professional experience translates well into private consulting.
Before you quit your job to venture off on your own, you should be sure that your experience is well suited for private consulting. Let’s use my situation as an example. I had come directly from corporate marketing and communications at a large consumer packaged goods firm. This is known in the industry as “CPG” marketing experience, and it is highly valued as the most classic of all marketing experience. While at a CPG firm, you typically carry a high level of responsibility, receive quite a bit of formal training and are given a great deal of exposure to sales, finance, operations, R&D, and public relations. I came to realize that this is fairly well known, and as a result, many companies value CPG experience and will pay an individual to share it.
Think about your experience in a similar way. What do other companies in your industry know about your type of experience? What about your experience is unique, in-demand and marketable? That’s how you’ll want to present and publicize your skill set as a consultant.
2. Focus in on what you have to offer as a consultant.
Once you’ve decided that you have a unique and marketable skill set, narrow your experience down to about three core competencies. It takes some real discipline and thought to do this. But if you tout much more of your expertise than that, you’ll start to confuse yourself and your potential clients about what you have to offer. As an example, I narrowed my core competencies down to these three:
- Providing brand marketing and communications strategy
- Developing marketing plans
That’s it. You’ll notice that the competencies are all very much related to each other. That was not by accident. This focus made it easier to communicate to people about what I had to offer. It also made it easier for my friends to promote me to their network of contacts. This is no small point. In fact, it’s the point. It’s how I got my best client.
3. Create a basic website for your consulting business.
It does not have to be fancy, and you don’t have to know much about web programming to do this. There are lots of build-your-own website applications out there that can help you create a basic site. I just Googled “build your own website” and got plenty of results. Mine is at Tenzeau.com and I built it on my Mac using the iWeb application in just a few days.
The idea is not to try to build a huge site and drive traffic to it – that can take years. You just want to spend a few dollars and a few days to put up a basic site that you can send people to after you’ve networked with them. That way they can refresh their memories about who you are and what you have to offer.
4. Spread the word about your consulting business.
Now that you know exactly what consulting services you’re offering (maybe you’ve even practiced a nice, smooth pitch), and you have a basic website where you can send people, it’s time to tell everyone you know that you’re in business.
Start by writing a polished email that includes your pitch and a link to your new website. Then send it to everyone you know. Literally, pretty much everyone you know should get this email. Even if they are older friends of your parents. Remember, these folks may hold high-ranking positions or have sons and daughters in the work force who can help you. You never know who people might know.
Then update all of your social media pages (LinkedIn, Facebook, etc.) to reflect your new business venture. Join groups that will expand your network.
When you’re out and about, talk to people about your new business—in fact, talk about it (appropriately, of course) wherever you go.
Remember, most people get jobs through friends, family and other connections, rather than formal job listings. Again, that’s how I got my best gig. I sent out my email blast to everyone I knew, then several months later, a friend mentioned it to his boss and badda bing – I had a client!
5. Be smart about what you charge.
When those clients start coming in, they will ask you how much you charge. Be ready to answer them intelligently. One place to start is with your last salary. Take the dollar value of your last salary (including bonus) and multiply it by 1.3. That will get you roughly to the amount your employer actually paid for you, including your benefits package. If you have deeper insight into what that number is, use that. I am using a general rule of thumb that a benefits package costs roughly an additional 30%.
Now give yourself a raise. Why not, right? How about a 15% raise? So whatever number you ended up with, multiply that by 1.15. This is your new annual salary. Let’s say it’s $150,000. Now use a little math to break it down into 12 months and you have what you would charge someone to keep you on a monthly retainer. This is roughly how I billed my client. Now use a little more math and break that number down by the hour, and you have your hourly rate.
Have all of these figures in the back of your head when you walk in the door. If you sense from the meeting that the client has a large budget, feel free to tack a few dollars onto your fees before you state them. If the client continually talks about tight budgets, you might want to shave a few dollars off in order to win the business.
Whatever you do, have confidence in your ability to sell yourself and your skills. Most of us know more than we think we do. And remember, after the Great Recession many companies laid off a good chunk of their workforce and now they’re short staffed. If you’ve got the skills they need, it’s less risky for them to hire you as a consultant than it is for them to add a full time employee to their books.