5 Mistakes to Avoid When Starting a Consulting Business
Becoming an independent consultant is an exciting transition! You are capitalizing on the skills and knowledge you have built, getting paid money for your expertise and knowing your years of experience has put you on top of your game. You are now ready to take a chance to be your own boss, pursue projects you’re passionate about and take control of your work-life balance. However, going off on your own for the first while can be a scary thing. There are many twists and turns in the consulting world, and it’s better to understand not only what to focus on, but what to avoid as well.
Avoid the growing pains of starting a consulting business by learning about common errors and what you can do to avoid them.
1. Don’t Generalize and Do Everything!
What is your persona? What is your niche? What is your expertise? Often times consultants get confused and make the mistake of taking on any contract project that comes there way. When you pick one thing you are passionate about, you can give your clients higher quality information, versus a wide variety of scattered advice. It’s always great to help out in different departments and open to communicating with other teams, but be sure that the work you were hired to do.
SPLICE TIP: It’s great to have many personas. Make separate resumes and/or splice profiles that capture the persona. For example, If you have Project Management, PMP and/or Business Analyst experience, make separate resumes. This brings an easier search for agencies on the platform and less confusion for the client when you are brought on to a specific project.
2. Undervaluing Your Rate
Knowing your worth is a huge deal. If you’ve just started consulting, you may feel pressure to lower prices. However, if you lower them too much, people may doubt your expertise. Finding that sweet spot is important not just to pay your bills, but to understand the consulting market in general. Not sure what the market trends are looking like and how much you should charge? Reach out to your network of consultants or better yet, the Splice talent team would be happy to take a look at the market and give you a rate range.
3. Know When to Say No
As an independent consultant, you have to be willing to dedicate a lot of time and energy to your clients and to your business. However, setting boundaries and limits is also important, both for yourself and for your clients. While it may be tempting to say yes to whatever clients ask of you, it’s critical to learn to stick to the agreed-upon project contract. You do not want to feel overwhelmed and over-worked to the point of missed deadlines, financial losses, and increased timelines and budgets.
SPLICE TIP: Splice values and believes the importance of maintaining a work-life balance. It’s important to know your work ethic but also acknowledge a commitment to staying healthy, productive, self-aware and continue to do what you love and what makes you happy at the end of the day.
One of the most common issues consultants have is not holding the other person accountable. If you’re a consultant, you’re asking your client to produce results from the guidance you gave them. What if they don’t deliver? What if they don’t pay you when you invoice them for services? Be sure to read over your contract before signing it. It’ll help extinguish ambiguity and help you draw the line in the sand on how much you’re willing to tolerate.
5. Forget About Networking
When you first start out, you dedicate a great amount of time and energy creating your brand and getting your name out there. Many ways you are doing this is networking events, marketing tools, social media platforms, and constant contact with recruiters & agencies. These are tactics used to win new business and projects. However, once that contract is secured, their networking efforts take a stand-still. Yes, focus on building your new client relationship but don’t forget to nurture and keep updated your networking efforts.
SPLICE TIP: Keeping your Splice profile up-to-date should be an ongoing process in order to keep projects coming in at a steady pace.
There’s a lot to organize, plan, and prepare for when starting out as an independent consultant. It takes dedication and commitment to work through the learning curves and challenges that come with it. Finding the motivation and trusting the struggle will lead to long-term results and you’ll set yourself up for success. Take the time to find your niche, your process, and a fair rate for your services. And when things get tricky, don’t be afraid to reach out for help.
How did you get started as a freelance consultant? Tell us in the comments below!