Introduction

After making the transition from permanent work to contracting you might wish to go consider moving into consulting.

This series of articles explains the subtle differences between contracting and consulting and gives advise and guidance for becoming a consultant.

In part 1 we examined the differences between contracting and consulting.

This is the second part which describes the consulting approach.

The consulting approach

Consulting requires a different approach to working with clients and a different model of engagement to suit that style of working.

Consultants usually work with several clients in parallel, and spend a few days each month with each client. They’re rarely needed 5 days a week.

As a result, a good deal more flexibility is required, and consultants are subject to a good deal more uncertainty as to when and where they’ll be working. Some weeks they may be fully utilised, other weeks they may be doing nothing – at least, nothing they could bill someone for.

In order to respond to clients ad hoc demands, some slack needs to be built into a consultant’s schedule, leaving days free for those last minute requests. If you can’t meet a client for 3 months because you’re too busy, you’ll almost certainly find that they’ll take their business elsewhere, and after those 3 months you may end up with no work at all.

This is very different to how contracting works. Contractors are 100% utilised by one client for long periods of time. As much as you’d love to, you can’t do any work for client X while you’re under contract to client Y.

Contractors are effectively serial monogamists, lining up a new marriage as the current marriage draws to an end. The trick to making a good living as contractor is to ensure you never end up single and on the shelf. This works for the majority of contractors, who prefer to put all their efforts into one client relationship at a time.

Consultants have to manage several relationships, and balance the needs of a group of clients to try to make sure everybody gets what they want. The advantage of this model is that it’s less likely that you’ll end up with no income at all.

Disadvantages of Consulting

The main disadvantages to consulting are:

• More effort: It takes much more effort to manage multiple clients.
• Uncertainty: Never knowing far in advance how much work you’re going to have.

Forecasting & Planning

The key to lucrative consulting is forecasting.

Whereas a contractor has certainty for a 6 or 12 month period when they start a contract, a consultant probably doesn’t know exactly how much business they’ll be doing beyond the next month or two.

It is difficult for consultants to plan further ahead than a few months and remain responsive to their clients emerging needs. The problem with being an agent of change is that things change!

You need to work smarter and be adaptable, operating more like a traditional business than most contractors are used to.

You need a basic business plan outlining:

• how much you are going to make
• where the money might come from.
• Your marketing and sales process.

Winning business as a consultant takes longer, and converting prospects into customers is much tougher.

For contractors, marketing and sales is minimal, consisting of a CV and approaching agents who have already spent the time and effort building client relationships. By the time you’re sitting in front of a prospective client, much of the sales and marketing has already been done on your behalf.

As a consultant, you are less sheltered from the winds of the consulting market. It’s for this reason that many contractors who would probably have much to offer as consultants decide not to take the plunge (or, quite often, take the plunge and then decide that it was a bad idea…)

In Part III we will provide some tips for entering the consulting market.

Published: Monday, March 20, 2006