Five Consulting Lessons I Learned the Hard Way

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Five Consulting Lessons I Learned the Hard Way

By crooky | October 29, 2008

I had the pleasure of talking with a new vendor today - a local web designer named Gwyn Pritchett - who is going to help be design a new website for the Learning Disabilities Association of BC. We met this evening to go over the design specifications for the new site and after we talked about that, we talked a little shop. Gwyn has been running his very successful web design firm while finishing university and he’s only got four months left to go. Obviously, his future is top of mind. His main interest seems to be in continuing to be self-employed so we talked about what I’ve learned in the nearly six years I’ve been doing this. I wasn’t really prepared but some themes emerged that I want to share with everyone:

1. Don’t Undercharge

People starting out in consulting today might think that they need to go downmarket to succeed in a shrinking economy. I respectly submit that such thinking is bunk. What you need to do is find a niche that is not something everyone else is doing and sell it at a premium. For example, when the economy is tight - offer a service that makes people think they’re saving money. You’re a webmaster? People still need websites, even when the economy is in the toilet. Make your niche designing websites in the most affordable way possible or link your design techiques to a measurable return on investment (ROI) so that the client can be sure they got their money’s worth.

When I started consulting, I thought about what I’d been making as an mid-range public servant on an hourly basis and doubled that. I now know that I should have tripled it because you have to account for your overhead (your clients will when they’re doing a cost-benefit analysis on your proposal). I was fortunate to have someone pull me aside and tell me what a more appropriate rate would be. If you’re not familiar with the theory, consumer behaviour gravitates towards high-value brands. If you try to undersell the competition, you’ll never get premium rates - you’ll start to be known as the “value” brand. Do you want to be generic ketchup or Heinz?

2. Don’t Try To Be Everything to Everyone

My mantra when I started consulting was “for my day rate, I’ll do anything. I’ll wash your car. I’ll kill your neighbour’s dog. Anything.” I’m much more selective now that I’ve learned how to say no but I’ve also come to realize that I’m not the best person to do every aspect of a project. I’ve talked in the past about the value of good sub-contractors to a consultant [READ] but I think the take-home lesson here is that hiring the right people for the right tasks not only ensures the best outcome possible for the client but saves everyone time, energy and money in the long-run.

Happy, energetic clients who can get the job done for less are the kind that tend to be repeat customers. Just make sure that you’re very transparent about who is going to be doing what work on a project.

3. Do Your Time

Most younger consultants (I was 24 when I started my firm) start out by working as a sub-contractor under a more experience consultant. That was certainly the case for me when I worked under several well-established consultants, learning the fine art and nuances of the work. I learned about what the relationship between a real consultant and the client looks like (service, not subservient). I learned what kind of quality certain clients expect for set abouts of money. I learned how much to charge, how to manage multiple projects and how to deal with problem clients.

One thing most successful consultants lack is good help and time. Even if you stop being their Guy/Girl Friday, they’re still going to have more work that they can handle and are more likely to pass lucrative contracts along to you than let them slide. Be sure to reward other consultants that do this with a spec fee.

4. Build Your Network

One thing that’s not going to work very well for you as a new consultant is advertising. In my opinion, advertising works for well-established consultants with a recognizable brand-name in their industry. Every industry has their small pool of rock-star consultants that can charge thousands of dollars a day but unless you’re them - you’re not going to compete with them on cold leads.

Warm or hot leads is where it’s at. I’ve talked about my Career Search Intelligence (CSI) presentation in the past [READ] and I think there’s tips in that methodology that you can use to land clients instead of jobs. In my opinion, finding a job and landing clients is essentially the same thing.

5. A Job is Easier but Less Rewarding

I’ve dipped back into salaried work once since starting my business and here’s what I learned: salaried work sucks in comparison to consulting [READ]. You may long for the simple days when you could get away with playing solitaire for several hours on end but the reality is that consulting pays better and is more emotionally rewarding than any job could ever be. If you take the plunge into consulting, it’s hard to go back to a job. Make sure that you’re ready to go solo before leaving your job because it will ruin you for regular jobs.

Other articles I’ve written related to this topic:

Consulting Business by the numbers - How are you spending your time?

How To Land Your First Client As an Independent Consultant

Three Big Ideas for Gaining an Edge in the Consulting Market

How to Write a Great Consulting Resume

How to Make Your Business Look Impressive

Lead Generation for Consultants and Non-Consultants

The Eightfold Path to Consulting Bliss

Famine-Proofing Your Consulting Business

Consulting in an Economic Downturn

The Doom and Gloom Speech on Consulting for a Living