The current economy’s recovery is looking seriously “jobless.” This is leading professionals to consider creating a consulting practice while they stay on the job-hunt. Some even plan to keep some consulting on the side once they are employed. There is no job security anymore, and we are all free-agents whether we choose it or not.
Recently I was asked to help a professional (who had always been employed) to jump-start his new consulting practice. So I wrote an initial checklist for him to consider. This was beyond the basic “how to start a small business” list about business licenses, incorporation, taxes, and so on, which is written about everywhere.
This list was about the subtleties of defining his intangible offerings, what would make him unique, what markets and targets would get him a paying gig with the best pay in the shortest time, and so on. So I thought to share it here, for all of you considering consulting for the first time, and for those of you who are already consulting, as a check-up list to revisit.
Define your unique value proposition: what is different about your offering from all the other consultants that sound like they do what you do?
Create language for selling your intangibles (including contracting, delivering and justifying them).
Create testimonials from your earlier work (wherever it was).
Create success stories from your work and reduce them to one-two sentences.
Create your initial tag line based on your unique value proposition.
Refine your target market, then your target niche(s)
o Refine UVP & tag line for each, if required.
o Prioritize your targets for the highest margin from them and best access to them.
Profile your ideal client.
o Go where they are to meet them – in person, online, at conferences, and so on.
Create a short screening-questions list for initial conversations to prioritize which to pursue.
Determine various pricing models, and when you will use each one. Eliminate some.
o Retainer, project fees, value pricing, hourly.
o Equity deals if appropriate, including getting options vs. grants of shares.
Refine language to explain why you do not write proposals, but only contracts.
Create standard contract(s)
o Design these to allow for quick production.
o Define your scope of work with the client before writing contracts.
Practice your negotiation skills –
o Selling your value in words and success stories.
o Defining your flexibility and boundaries.
o Saying no to some prospects early on.
o Finding the point of negotiation that is blocking the close (different for each prospect).
o Re-negotiating tactics to overcome this block.
o Exercising follow-up tactics for prospects you can’t close immediately.
o Letting some prospects go.
Create language and tactics for controlling expectations, time, schedules and boundaries.
Use tactics for providing ongoing proof of your value to your client.
Use strategies in negotiation and practice to get paid upfront, and ongoing.
o Negotiate for your fees ahead of your time commitment to work. Do not work without surety of being paid.
o Create your own understanding of when to stop work, and when (and if) & how to continue working in arrears (if you can afford to work in arrears). Then act on it.
Create an internal tracking system for monitoring your time commitment to each client.
Create an internal system for your private assessment of how much time you are spending building a high-margin consulting practice, and still having a life.
Follow good guidelines to balance work & life while running your own practice.
Of course this list is not comprehensive. And I know that many of us who consult do not keep our own houses in order as well as we can write lists. But it is useful to review our lists every now and again. And when starting out on a new venture, it is useful to know the terrain you must travel.