Being a self-employed consultant can be a great career choice. You'll have more freedom with your schedule, you'll have the opportunity to earn more income, and you'll be able to live the consulting lifestyle.
That being said, there are also some risks: as a self-employed consultant, you're responsible for your own paycheck and benefits, you're in charge of everything, and the buck stops with you. For some people, those things sound like downsides. For others, they sound like a challenge just waiting to be accepted.
Because there are some risks, it is important that you are completely prepared as you launch your career as a self-employed consultant. You want to launch your business on the right foot in order to make sure that you're putting yourself in a good place to find clients, market your business, and earn maximum income from your new endeavor. Here are the 7 steps you need to take in order to launch your self-employed consulting business:
#1: Determine Your Niche
While changing careers and lives to become a self-employed consultant is thrilling, it is also a huge professional and life adjustment. You'll need to specify the services you wish to offer before you start. Investigate your sector, learn what's in demand, then tailor your services to meet those demands. Clients will be depending on you to provide the outcomes you promote, so be confident in your abilities and expertise.
Do you have the patience to wait a few weeks for a contract to be signed… or the tenacity to use your network to locate new clients? Thinking through your services and mentally preparing for potential challenges can put you in a good position to start working independently. You need to figure out what you do well and then start charging for it. Take a look at your previous jobs, your strengths, and your skills and build a consulting career around those things.
#2: Figure Out Your Fee Structure
What clients are you looking to serve? What services will you be offering? All of this will come into play when you decide your fee structure. It is very important that you don't do hourly billing but instead charge based on project or on a retainer. (To learn more about why you should avoid hourly billing, read The Dangers of Hourly Billing for Consultants).
You should base your fees on two main factors. The first factor is how much work will go into each type of project. As a self-employed consultant, you only have limited hours in your day. Be sure you understand how long it will take you to finish each type of job. The second factor is how much you want to earn in a year. You can then translate this amount to an hourly rate by diving by 2,000. If you work 40 hour work weeks, you work about 2,000 hours per year. Thus, if you want to make $100,000 per year, you need to make about $50 an hour ($100,000 divided by 2,000 hours = $50 per hour).
Once you figure out your hourly goal, you can figure out how much to charge for a project by figuring out approximately how many hours that type of project will take. For example, if you're writing a business plan and it normally takes you 20 hours (to meet with the client, do follow-up research, write the plan, present it to the client, and do revisions) then your starting point should be that you need to charge $1,000 for that project (20 hours X $50 = $1,000).
My advice is to then DOUBLE that amount. You should do this because you also need to spend time marketing, doing your bookkeeping, working on your website, etc. You won't be spending all 2,000 of your working hours each year working with clients, so you need to charge more so that you have the income you need while still having time to work on other aspects of your self-employed consulting business.
#3: Build Your Network
One of the most important techniques to becoming a successful self-employed consultant is to build a pipeline of clients before you start working. You need to network… and you need to start networking before you leave your current job. It is important to develop your elevator pitch, practice speaking about your services, and get guidance from other industry professionals who may be able to help you break into the consulting business.
Attending networking events in your area is a wonderful way to learn all about the most recent trends and what other consultants are doing and providing for the types of clients you will be seeking to serve. A further option to get useful business advice and direction is to find a mentor. When you're just starting out, a mentor may be very helpful since they can speak from experience and offer advice on the measures you should take to get your business off the ground.
Remember, talk to everyone you can about your new business. You want to find people who will hire you… but you also want to find people who will recommend you to others. Your network should be vast, varied, and with toes in multiple different industries.
#4: Handle the Paperwork
Make no mistake: there is a lot of legal and accounting paperwork that you will need to tackle when you become a self-employed consultant. When you are launching your business, you need to keep in mind the process to choosing your business name – then registering it. You also need to sort through tax structures and banking information that can sometimes be complicated.
Do you know a lawyer and accountant you trust? If so, you should turn to them at this point as you set up your self-employed consultant career. Most importantly, all of this must be done before you start taking on clients. Make sure you have all of your legal and account ducks in a row before you launch your business!
#5: Build Your Online Presence
The best and cheapest way to market yourself is by building a strong online presence. Start by building a quick and easy (but professional looking) website for your business. Focus your website on getting people to sign-up for your e-mail newsletter, so you have a way to stay in touch with them. Be sure to send your entire list an d-mail newsletter at least monthly (and preferably once per week) so they stay in the know about your consulting service offerings.
You should also spend some time staying in touch with clients (and potential clients) through social media. From Facebook to Twitter to Instagram, you need to build a strong online presence from day one. As a self-employed consultant, you can also use LinkedIn as a virtual résumé and a networking site to connect with individuals you'd like to work with.
#6: Launch Your Brand
Because the public will judge your future business based on your personal brand, building a strong brand for your business as a self-employed consultant is an important aspect of preparing to thrive. Prospective clients will be able to swiftly and easily figure out what you do and what services you provide based on your brand.
Consider what makes your company special and what form of message would be most effective in showcasing those services when developing your personal brand. Building a brand goes hand in hand with marketing and establishing a social media presence, so make sure your branding and messaging are consistent across all platforms. And don't be afraid to ask people – from friends to family to former clients – to spread the word about you.
#7: Market Your Business
Start thinking about how to effectively market what you've developed after you know where your firm is going and have multiple projects under way. A clever and strong marketing strategy will assist you in taking a step back and looking at your firm as a whole, as well as aligning business goals with marketing objectives, such as increasing income or extending your service offerings. Marketing your business will be a way for you to come up with an angle to reach clients and a path forward to become the company you know you can be.
Become a Self-Employed Consultant This Year: You Can Do It!
The most important thing about starting a career as a self-employed consultant is to not be intimidated! You know you can do this and you know you want to do this. If your heart is in it, if you are truly invested in doing a good job, all the rest will fall into place with hard work. When you first get started, make sure you find a few clients, sign them, impress them and ask them to spread the word. Focus on marketing and be committed to doing a great job for your clients. You can accomplish so much, you just have to believe in yourself and your vision. You can do it!