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Saturday, April 24, 2010
The Accidental Consultant
With the unemployment rate still stuck in high, former full-timers are finding themselves self-employed – and working on a new footing with old bosses.
There’s no time like the present. Certainly, that attitude may have helped inspire a surge of jobless managers and executives to launch their own companies. The percentage of unemployed workers who launched their own businesses increased to an average of 8.6 percent in 2009 – nearly 12 percent in the third quarter – according to a report by the Chicago-based outplacement consultancy Challenger, Gray and Christmas.
The newly minted entrepreneurs often end up working as contractors or consultants for their former employers. “They have the experience, communication and technology skills and a strong network of business connections,” says CEO John A. Challenger. “This arrangement is ideal for companies in this fragile economy. They are not quite ready to increase hiring, but they need people who know what they are doing.
A consultancy can sound like a great gig to anyone who’s been unemployed for very long. But wait one minute before dashing off to print up business cards. There’s lots to consider. For starters, should you be a consultant or a contractor? There’s a big difference, points out Alan Weiss, president of Summit Consulting in Rhode Island and author of “Million Dollar Consulting,” (McGraw-Hill, 2009).
“You can’t just call yourself a consultant,” Weiss says. “A subcontractor is someone who comes in as a pair of hands at a client’s request. A consultant comes in and provides intellectual capital.” A subcontractor is paid for her work. A consultant is paid for her advice.
Setting out to become a consultant might be a more lucrative way to go, but it’s also more difficult.
You must commit to a consultancy one hundred percent, says Julie Jansen, career coach and author of “I Don’t Know What I Want, But I Know It’s Not This,” (Penguin, 2010). If you really have your eye on a full-time job and plan to consult or do contract work in the interim, that’s fine, but it’s not likely to be the successful, fulfilling venture it could be.
“Most people aren’t wired to be self-employed,” Jansen says. “The collecting money, constantly looking for the next gig, not having structure or colleagues – it’s completely [opposite] to working for someone.”
Consulting requires a healthy dose of ego. “Ironically, it’s not the money that’s the biggest obstacle,” says Weiss. “It’s the lack of self-esteem.” Jansen notes that many people do not like self-promotion because they don’t know how to do it.
The unknown is also frightening. Consultants can go from warp speed to an empty agenda in the blink of an eye. “You’re sitting in a vacuum, shocked, when six months later there’s nothing to do,” Jansen says.
The key to a would-be consultant’s success, Weiss says, is to identify a market in need of your skills, ascertain your ability to fill the need and make sure you’re sufficiently passionate to face the inevitable challenges of building a business.
Jansen underscores the importance of knowing the market. All too often, she says, “People rely on what they know how to do well and not what the market needs right now.”
Weiss advises taking a hard look at your “value proposition.” “Consulting is about providing a better position for the client,” he says. “How is the buyer better off when I walk away?”
When identifying potential clients, though, don’t go banging down entry-level doors. “Determine who can write the check,” Weiss says. He notes that these are never people in human resources or training departments of companies. Former full-timers who might have functioned well in a bureaucracy need to approach a company leader with confidence. “You and the buyer are equals,” Weiss says. “Before, you were in a hierarchy.”
To establish credibility and begin attracting clients, Weiss suggests “creating a center of expertise.” Create a Web site, not as a sales tool but as a credibility tool. Get good stationary and business cards. Start a blog. Consider sending out an electronic newsletter. Host teleconferences.
While you may have come to consulting accidentally, the rewards can be greater than the risk.
It may be a difficult transition but a career as an independent consultant can be much more fulfilling, emotionally and financially. “I’m so happy I don’t work for a company,” Jansen says.
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