On Showtime’s satiric television series “House of Lies,” a corrupt team of management consultants uses shady tricks to convince powerful CEOs to engage their (deliberately vague) services for outrageous fees. Although the series is fiction (and its values questionable), it does make a valid point: If you are outgoing and can provide a service that’s considered essential but difficult to obtain, you may be able to earn a living as a consultant.
Consultants are experts in a particular field who work independently or as part of a consulting firm. Consultants provide expert information and advice to their clients in exchange for fees. While this may sound like easy money—who doesn’t want to voice opinions and tell others what to do?—it’s not just a matter of spouting off. You need to be able to justify your recommendations, and your reputation will be built on the results.
Value and Scarcity Are Key
Are you comfortable working with computers? Fund-raising? Public relations? Your job will be to offer solutions. You may develop the solutions yourself if you have the technical knowledge, or you may tap other resources, including other consultants. If your expertise is highly valued—or, as the show illustrates, you’re skilled at creating the appearance of value—you could command substantial fees.
Consulting services currently in demand include:
There are several questions you need to answer before you quit your job and hang out your shingle as an independent consultant:
In addition, you must be able to “package” your recommendations in a professionally written report, and, from time to time, you will likely be asked to present your report in person, which may involve creating and narrating a slideshow. A typical consulting presentation includes a definition of the project purpose, objective and background; research methods; research findings, including relevant statistics with graphs and charts as needed; followed by your recommendations and rationales.
Your Time = Their Value?
What about the converse: Some tasks take more time than others; does that mean clients are willing to pay more for tasks that take more time? Not necessarily.
Easy Come, Easy Gogh?
Imagine you’ve bought a painting in a beat-up frame at your local thrift store for $1. You take it home and, after a little poking around on Goggle, you discover it’s a Van Gogh. Do you sell it for $2 and congratulate yourself because you spent only 10 minutes and made 100% profit? No, you price it based on its value to the purchaser. Should you—and can you—price your work this way?
Flat Fee vs. The Project from Heck
What about charging by the project? Some clients actually hire a consultant to help them define the project. If they aren’t yet clear on the details, how can you determine your fee? Many a regretful consultant has locked in a flat fee but failed to tie it to a written job spec, then watched in horror as the project mushroomed into The Project That Ate My Brain. You don’t want to find yourself working for minimum wage…or worse!
Undercharge or Overcharge—Both Are Red Flags
Once you’ve decided how to charge, how do you decide how much? If you charge too little, not only will you be unable to stay in business, you’ll also be sending a signal that you don’t value your services or aren’t knowledgeable about market rates for what you offer. On the other hand, if you charge too much, clients won’t be able to afford you.
Ask Questions and Practice
So, how do you find a middle ground? Do some research to learn what your competitors charge. This will give you a good idea of what your services are worth and what clients are willing to pay. If your competition’s fees are much higher than what you would have charged, practice saying those rates in front of a mirror until you can do it without looking embarrassed. This is especially important for women since they are so often taught to undervalue their contributions. Also, keep careful track of your expenses so you know the least you can charge and still turn a profit.
Got the Chops? Here’s How to Start
If you’ve addressed the questions above, you can develop a basic business plan, choose the legal structure of your business (e.g., LLC, corporation, etc.), and clarify what type of clients you’ll target so that you don’t waste time marketing to those who can’t afford your services or don’t need them. You may determine who potential clients are by examining their problems and current staffing levels. You can also respond to a Request for Proposal. Taking the time to research clients will save you time in the long run by weeding out clients who are in trouble or who are trouble. Search by company name and keywords such as “complaints,” “financial trouble,” etc.
As more and more professionals become consultants, new consultants face a stiff challenge. However, if you have the technical and professional skills, branding yourself through a consulting company can be a lucrative and worthwhile business venture.