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Hi Neal

Greetings from Kuala Lumpur, where I am delivering a training course to business development professionals from Malaysia, Taiwan and Shri Lanka. They’re learning about competitive advantage – both within their organisations and outside – so your consultancy question is rather timely.

It’s also timely for me, as I’ve recently made the leap into the consultancy world. So I’ll share some of my recent thoughts and experiences with you. But first we need to be clear whether you genuinely mean ‘consultant’ or if you mean ‘freelance contractor’. There’s a big difference.

A consultant is someone at the top of their profession. They have market-leading expertise, supported by the qualifications, experience and track-record that encourage others to stop and listen to their counsel – and pay handsomely for the privilege. They charge in relation to the value of their advice, rather than their time, and the amount reflects their reputation for bringing results. They’re constantly visible as a thought leader, with a unique voice, and are the natural go-to on a specific subject. Anyone thinking of going down this route has to take a hard and critical look at their CV; they’ll ask others to assess their reputation, and will map out the extent of their network. Being certified to APMP Professional is (in my opinion) a must, alongside other qualifications in your intended area (for example, a Masters Degree in English if you’re intending to be a writing consultant; a postgraduate diploma in sales and marketing if you’re going to advise on business development activity.) If you’re not known for being the expert then it will be tough to generate the sales leads necessary for you to establish a profitable business. If people come to you, great; but if you have to go to them – and they’ve never heard of you – then that’s a tough sell.

(Side note: your proposed areas of expertise – in bid coordination, management, formatting and design – are too broad and too open to interpretation. Narrow them down and be brilliant/better than others at one or two things. Know your main strength and build upon it.)

A freelance contractor, on the other hand, is a competent professional who offers their time and skills as a ‘resource for hire’ – typically on a day-rate basis. They fulfil a need when resource is short, or augment the team’s skills on specific projects. Being a contractor can still pay well, but remember that you’re running a business, so perhaps only 50% of your available time will be spent delivering paid-for work; the rest will be spent doing sales, marketing, admin, accounts and worrying about cash flow. All the joys of running your own business. (Which, of course, apply to being a consultant as well.)

Here are some questions for you to consider, to further your thinking:

1. Why do you want to do this? Take a look at Simon Sinek’s book ‘Start with Why’ or his TED talk on the same subject. It will force you to consider and articulate your drivers, and focus on the value that you’ll potentially bring to customers.
2. What’s important to you? Is it money, or flexibility, or freedom, or time with your family, or pride in your work, or the chance to make a bigger difference? Are you compelled to do what’s right, even if it means moving away from something that’s comparatively safe?
3. Is it for you? Consultancy or contracting requires you to run your own business. It’s a very different game to being employed. The plus side is that you’d be your own boss – with the freedom of choice, ability to determine your own fate, style of working and working hours, whilst living without all the bureaucracy and politics that comes when working for others. It can be liberating, but can also be much more stressful. Lack of cashflow can be crippling, as can the worry of trying to forward plan and build a sales pipeline. Mortgage lenders and loan providers still see self-employment as risky, so will require three years of tax returns before they’ll lend you money. And there’s only you to do it. You’d be in a highly competitive world, so you’d need to be absolutely confident that others will see you as superior to your competition. (What’s your unfair advantage, and how can you prove this?) And if you get sick, there’s no pay. No paid holiday either.
4. Is it for your family? Don’t make this decision alone. Making such a big move will impact them far more than you could imagine. Are you prepared to gamble their future on your ability to raise money on your own? If you struggle, who will pay all the house bills, feed them, pay for their clothes and give them the quality of life they deserve? You’ll likely to be working MUCH longer hours (either doing the paid-for work or the behind-the-scenes planning and admin), so are likely to be tired and grumpy. If you’re working from home, you’ll need to set strict house rules for non-disturbance and silence while you’re working. (Domestic noise, like washing machines whirring or children playing, sounds hugely unprofessional when making calls to clients.)
5. Do you have the energy for this? My move from corporate life was fuelled by many years of frustration where I wasn’t able to perform to my potential. Strategic Proposals was the platform for me to grow and spread my wings. The experience has been the best of my professional life: all that negative energy that was pushing me away from something turned to positive energy that’s now pulling me towards great things. There’s excitement in this, which balances out all the worry of whether I can pay my bills next month or the month after. And it motivates me, as I know that my Career Anchors (check out the methodology online) state that I’m driven by being a specialist/expert. The thought of being a generalist manager (the opposite of expert) turns me off greatly, so the usual corporate ladder was never going to be for me.
6. How extensive and influential is your network? Can your contacts open doors for you, and will they be there to support you? Self-employment can be lonely. You’ll need trusted friends and advisors around you to chivvy you along, coach you and help you. You’ll also need plenty of warm leads before you go self-employed. Aim for a minimum of either six months salary in the bank as a buffer, or three-six months ‘guaranteed’ work when you start. Don’t jump without this parachute. You’ll grow wings eventually (quicker than you think), but it can be a stressful experience with many ‘deep breaths’ needed.
7. What’s your route to market? My advice is to work through a specialist organisation. I recommend starting with Bid Solutions as part of their network of contractors. Give them regular and open ‘account management’ – remain top of their minds when opportunities come in, and then ALWAYS bring your ‘A Game’ for every contract you do. You’re only ever as good as your last performance, so you have to be consistently brilliant.
8. How good are you, really? You have to have 100% confidence in your ability, but it must be realistically benchmarked. (Be confident, not delusional.) Who are the people whom you most respect in the industry? Who’s the best? How do you compare to them? Why are they as good as everyone knows them to be? What can you learn from them? What can you copy, what can you do differently, what can you do better? Knowing this will help you decide whether your business model is to be a contractor (extra pair of hands) or consultant (expert pair of hands).
9. Are you qualified to do this? What budget (money, time and effort) will you assign and commit to for your continuing professional development? There’s little worse than a consultant or contractor whose knowledge is out of date. Establish a clear plan of the conferences and seminars you’ll attend, the website’s you’ll study, books you’ll read, courses you’ll attend, and the extra qualifications you’ll get and by when. Know how they will strengthen your portfolio of services or depth of expertise, and what your potential customers value. And if you’re going down the consultant route, know how will you share your thought leadership and develop your unique voice. It’s a competitive market, so be quick to spot trends, and even quicker to execute upon them.
10. Are you a betting man? What’s your appetite and tolerance to risk? Have you created a spreadsheet that calculates the total cost of your responsibilities to your home, your family, yourself, and your business? What’s the total amount of money that you will need to earn to fund the rest of your life? Add together your remaining mortgage, loans, credit cards, domestic bills, school fees, holidays, everything for the next X years. Write the number (likely to be in the millions) down on the back of your business card and hold it in the palm of your left hand. Then place it next to your empty right hand (the emptiness represents your ability to create something from nothing, and your strength to toil). Hold them in front of you. Which one draws your gaze? Will you be able to balance everything in your left hand, with everything in your right? Can you afford to place the bet? What are your calculated odds of success? If you do this, will you win the prize you seek?

So there you have 10 key areas to consider. I’ve given a very honest view. When determining your future, please be smart but also do what feels right. You’ll know in your heart whether your current role is right for you, and whether going freelance is the answer. Decide which rewards you seek (additional potential earnings but greater risk through self-employment, or predictable earnings and greater security through employment; or simply which option will give you better quality of life.)

But then of course, there’s the entrepreneurial and maverick approach to all of this which states: “Just give it a go, and if it doesn’t work, do something else.”

Smile, and do what you know is right.