Careers in Independent Consultancy

My own venture into independent consultancy (in my case, in the field of Learning & Development) was the result of a long-harboured desire to break free from corporate shackles and plough my own furrow, or at least to give it a try. The original plan was to commit to a year or two, review, then return to corporate life if things weren’t working out. Thirteen years later I’m still independent, but there are a few things I would have done differently if I had my time again. This is a summary of my reflections along the way. 

Firstly, let’s deal with the basics:

• Are you good at selling yourself?
• Can your expertise add value to your clients?
• Are you flexible in terms of working hours, cashflow, location and type of work?
• Are you self-disciplined, self-sufficient and self-motivated?
• Do you have the support of family and friends?

If you can answer all of these questions positively, you’re off to a good start. But I’d recommend some deeper soul-searching before you hand in your notice. 

• Why do you want to work as an independent? If it’s mainly to escape your current job, it’s probably the wrong decision: you need to have some positive reasons for wanting to make the potentially life-changing move.
• Have you thought through the full implications? Whilst independence can mean freedom of sorts, it also means you will not have the safety-net most large organisations provide their employees.
• Are you prepared, psychologically and financially, for the lack of predictability and security the move to independence will entail? If not, you may wish to consider the ‘halfway house’ of contract or interim work.

If you’re still reading, maybe you’re ready to move beyond ‘should I?’ into ‘how can I?’. This will depend very much on your area of expertise and chosen market(s), but here are a few general pointers from my own experience. 

Preparing for the Jump 

• Do plenty of research: what are the in-demand skills? Do you have them, or can you acquire them fairly easily? Who are your potential clients, and how can you tap into them? Who are your competitors, and how do you compare to them? What’s the going rate for your area of expertise?
• Going into business with a partner can make sense for some: you can share costs and responsibilities, bounce ideas off each other, and play to each other’s strengths. But it is advisable to have up-front conversations about what you each want from the relationship, and set out in writing how much each person will contribute to and take from the business (in terms of time, expertise and money).
• Try to find a mentor. It’s really valuable to be able to bounce ideas off a seasoned hand who has been through the independent route themselves, and will give you honest, unbiased feedback. Just be careful that you don’t become too dependent on your mentor: it’s your business and livelihood at the end of the day.
• You may wish to consider taking a personality test before finally committing; if you are high on neuroticism you may find it challenging to deal with the uncertainties of independence, and if you are very low on extraversion then face-to-face business development may be difficult. But... don’t treat the report as the full story. Instinct may be more reliable than analysis.
• Decide your constraints: how long could your finances last without any money coming in? What will your criteria be for deciding whether or not to carry on?

Business Planning 

• Draw up a business plan, including educated assumptions about day-rates, fee-earning days and costs. Be as honest as you can: maybe produce a best-case/worst-case range, and if the worst case means you will lose your home, reconsider.
• Keep costs to a minimum, without skimping on essentials. You need a laptop, broadband, mobile and space to work (uninterrupted); you probably don’t need plush town-centre offices and a PA just yet. If you need a website, consider building your own – much easier these days than when I started out.
• Learn self-sufficiency. You are likely to be your own IT helpdesk, marketing department and facilities manager, unless you want to run up big bills quickly.
• Decide whether you wish to work as a sole trader or through your own limited company. The company route has some tax advantages and may present a more professional image, but it does bring some additional costs. Always take professional advice.
• Unless your turnover remains very small, you will need to register for VAT. If you have corporate clients they are almost certainly registered for VAT themselves, so can reclaim the tax.

Business Development 

• Network furiously, before and after launch. You probably don’t need to pay for expensive ‘networking breakfasts’ and the like, but use free trade exhibitions, professional institute gatherings and DTI-sponsored events to press the flesh, give out and collect business cards, and pick up insider gossip. And don’t forget online networks: LinkedIn can be a good source of leads.
• Try to have an assignment lined up before you make the jump. Even if it’s not your dream project at your top rate, it will boost your confidence and give you experience (as well as bringing in some cash in the early days).
• Don’t put all your eggs in one basket: if you end up doing back-to-back assignments for one client, you can easily relax back into ‘employee’ mode and lose your independence. Moreover, if your sponsor moves, you’ll be left high and dry – unless you can persuade them to retain your services in their new position.
• Decide how flexible you want/need to be with the type of work you take on. Overspecialise and you might find nobody needs your expertise; over-generalise and you could be perceived as a jack-of-all-trades.
• Treat your existing contacts as your first potential clients. Many will answer with a polite ‘not now, thanks’; but they may know someone who needs just what you offer and may even be prepared to recommend you.

Commercial Considerations 

• Be flexible with your day-rate, but don’t just drop to the lowest common denominator: it’s very difficult to raise rates once your client knows you will work for peanuts. Remember, your price is an important part of your brand.
• Set aside time for business development, administration and professional development. As a rule of thumb, 100 fee-earning days per year is probably a good target; too much more and you may neglect these essential long-term investments.
• If you work exclusively or extensively as an associate for other consultancies, be careful you do not slide back into an employer-employee relationship (unless you want to). If you’re good, you may be better off looking for your own work as principal: many large consultancies retain up to 75% of the fee charged to the client for work farmed out to associates. 

Growing the Business 

• If you find yourself in the lucky position of having too much work, or need to bring in supplementary expertise, you can engage associates. You probably do not need lengthy contracts, but undertakings regarding deliverables, rates, confidentiality and non-competition will help protect you and the client.
• If your business starts to grow substantially, you may decide to take on employees. This can prove more cost-effective than using associates and helps retain expertise (and contacts) in-house, but employees need to be managed and may reduce your flexibility. Again, take professional advice.

Work-Life Balance 

• If you work from home (as many of us do), it’s advisable to set aside an office away from the main living area if you can. A desk in the dining-room makes it very difficult to separate work from family life, and kids (or partners) screaming in the background do not add to the professional image when you’re on the phone to a client.
• There will be times when you need to work late into the night or at weekends to meet deadlines. Make sure your family understand why you are doing this, and make an effort to give something back by getting some quality time together when things are quieter. Cooking dinner or taking the kids to school from time to time is one of the perks of the job!
• Much of your working pattern will be dictated by your clients’ needs. However, as far as possible try to establish a routine: say, being at your desk by 8.30am and leaving by 6pm, with scheduled coffee and lunch breaks.
• Last but not least, keep a sense of perspective. It’s all too easy to be swept along on a wave of euphoria when things are going well, and wallow in self-doubt when the work dries up. Accept that there will be busy and slack periods; use the latter to invest in building personal and professional relationships, developing your skills and... taking a holiday!

©David Scott, 2013
Reviewed 2022