The
New York Times "Career Couch"
This
article appeared in the October 5, 2008 issue of The
New York Times -- in the "Career Couch" column.
A
Consultant’s Life:
Risk, Yes. Structure, No.
By EILENE ZIMMERMAN
Published: October 4, 2008
Q.
You’ve always worked for others but now feel ready
to strike out on your own as an independent consultant. Are
you
cut out for it?
A. Compared with corporate workers who take direction from
a boss and receive regular paychecks, consultants lead lives
with
much less structure and much more risk. You need to know
whether you can handle a new level of uncertainty and self-direction.
Before you decide to take the plunge, understand that consulting
doesn’t always provide consistent income.
“You
may have the best-laid plans, but you still don’t know
when you will land that first client, or when your income will
become regular,” said Edith Onderick-Harvey,
president of Change Dynamics Consulting, a leadership
development
firm in Andover, Mass. Also realize that you will
need to spend
a significant amount of time marketing your skills.
“Sometimes 75 percent of your time will be spent selling yourself
and often that’s just networking, not even real job opportunities,” Ms.
Onderick-Harvey said.
Successful consultants are very self-motivated and
nimble, said Bradford Agry, founding partner
of CareerTeam Partners,
a career
management consulting firm in New York.
“Most people are used to working in a job that has a specific
description,” he said. “But your
consultancy is going to unfold and change,
so you need to be
flexible.”
Q. How far in advance of leaving your job should
you begin planning your move, and what should
you do during
that time?
A. Plan on six months to a year to lay the
groundwork for your consulting business.
Building a network
of contacts
is crucial
during this time, said Linda Stewart, the
chief executive of Epoch, which helps find
projects
for independent
consultants in financial services. That network
includes friends, colleagues,
business associates, vendors and clients.
Write a
business plan that establishes how revenue will be generated
and how you will
handle sales,
marketing, finance,
operations,
expenses and fees, Ms. Stewart said.
Meet with
an accountant and a lawyer, who can advise you about what kind
of
entity
to form — like a limited liability
company or a corporation — and
about the tax implications of each. Legal
advice will also help ensure that the
work you
do as an independent contractor doesn’t
subject you to any personal liability,
said Jay A. Zweig,
a partner
specializing
in employment law with the Bryan Cave
firm in Phoenix.
“One
thing that is absolutely critical is to develop a standard
engagement letter stating that a particular company is hiring
you as an independent contractor
and this is how and when you
will be compensated,” Mr. Zweig
said.
Q. What
kind of financial cushion should you have before leaving your
job to
become a consultant?
A. Depending
on whether you have a partner or spouse helping to pay
the bills, you should
have
6 to 12 months
of living
expenses in the bank. Make sure
you have a clear understanding of both
your personal and business-related
financial obligations, Ms. Onderick-Harvey
said.
“Working out of your home may mean low overhead costs,” she
said, “but you need things
like office equipment, phone lines,
business
stationery,
I.T. services,
health insurance
and professional malpractice insurance.”
Q. Is it
advisable to become a consultant during an economic
downturn?
A. A downturn
isn’t
necessarily a bad time
to be working on your
own, provided
that
you have
a realistic
understanding
of your market. But your
financial cushion is even
more important
because it could
take longer to
establish a steady
income stream.
Q.
If you’ve
been laid off, is that a good time to become a
consultant?
A. If your
severance package allows you the
time to
make the transition
properly, yes.
But you
still need
to evaluate
your
skills, personality
type, income requirements and
risk tolerance,
Ms. Stewart said.
The decision to become
a consultant should
never be
a knee-jerk
reaction, said Ms.
Onderick-Harvey, especially
if you have
a small severance package.
Q. When
you are starting out, how do you obtain
clients?
A. Begin
with your network. Systematically
send e-mail — then
follow up with phone calls — to
everyone you know
who might need
your services or
be able to refer
you to
a potential
client.
Approach larger consulting
firms in your industry
and let them
know you
are interested
in working
as a subcontractor
when they
need extra help,
Ms. Stewart said.
You can
also work
with contract staffing
firms that
can act as a broker
and connect you with
projects.
Q. It’s troubling that the term “consultant” often
has a negative connotation.
Why is that?
A. Consulting gets
a bad rap because
there is no
barrier to
entry, said Alan Weiss,
president of
the Summit
Consulting
Group, a management
consulting firm
in East Greenwich,
R.I.,
and
author
of “Million
Dollar Consulting.”
“There
is a lot of schlock in the field,” he said, “but
the greatest
companies in the world use consultants because they know they
need them.”
A version of this article appeared in print on October 5, 2008,
on page BU15 of the New York edition.
