The following is a guest post by Karl Walinskas.
Question: What is the quickest growing industry in the United States today?
Answer: Private Consulting
Not only are there more small businesses than at any time in American history developing, but an ever increasing number of those companies are that of private consultants. Why is this? Is it the Obama financial plan? Has government developed these “new” jobs as is so often the claim? I think I speak for most of you when I say the answer is, “Certainly not.” The new consulting businesses turning up around the country are a direct result of corporate downsizing and the difficulty in securing professional employment. As large corporations are scaling back on technocrats such as engineers, human resource professionals, and MBAs, Vistage-style consulting firms are born from the suffocating corporate cadavers like a Phoenix soaring from the ashes.
There are three reasons why these professionals, all of a sudden unemployed, become consultants:
- They’re specialists with technical skills and talents. They’re too proud to work at McDonald’s, Wal-Mart, or collect food stamps from Big Brother. The case for motion for starting their own business hit like a hammer on a rusty nail when they were let go.
- Other big firms, long the image of corporate status and security, are downsizing too. There just aren’t as many qualified jobs in corporations. But the task still needs to be done, so the big boys are outsourcing. This change in the technical industry has brightened light bulbs over the heads of hundreds in the recent 5 years.
- They aren’t good enough to earn a living playing pro golf.
Are all these firms going to obtain success in lobbying for the seeds spread by Microsoft, Facebook, and General Electric? Well … No. There are still vital business success factors which need to be demonstrated by these new S-corps. As I own and operate my own small business growth consulting firm, here are a few of my own deep thoughts and tips for getting started in this hot field.
If you want to make a living as a business advisor, you first must find a more enabling “Why?” than the 3 reasons I just offered. Being driven into a career change is normally not the greatest way to ensure long term success. But don’t lose heart, even if that’s how you started, you can quickly come to realize other, more powerful reasons for being your own employer, including:
- Work for Yourself. Make your own hours and take get-aways when YOU want to.
- Freedom to plunge into any niche market that interest YOU. Your interest and enthusiasm are key motivators when times are tough.
- Retire when YOU want to. This isn’t set by a corporate policy.
- Earn what YOU want. You never again need to whine that you’re worth more than you earn. As a consultant, you’re valued at precisely what you make!
- Your job is as secure as you make it.
- You work where you wish. Home, office, or chateau in the south of Europe.
Once a consulting firm is in progress, these reasons must be persuasive enough to propel the directors through the difficult times, paperwork, and trivialities that your own business will surely bring.
The next thing that potential consultants have to do to obtain professional success is to specify the scope of the company. The means to do this is to first take stock of yourself and any employees that you may have. What are your technical strong points? Weaknesses? Hobbies? The parameters of the services that are offered should rely on the technical strengths and interests of the consultants and steer clear of the weaknesses like the plague. You may wonder, “Why is that necessary?” to which the answer is, the best way to use a life vest is to never get in water over your head. Sticking with your strengths avoids drowning. Consumers and Rivals You’re all pumped up about starting this business! You know what you want to consult on! What now? Before making the jump, it’s a great idea to know and be able to answer 3 things:
- Is there a market for my services? Who will my customers be?
- Who else does what I do? Or, who are my competitors?
- Why am I superior to those folks in number 2?
If you are selling spectacular vistas of the sunset from your eastern facing veranda, you’ve got an issue! If there is no niche for your products, punt for now, flip some burgers to pay the bills, and re-group. If there is, you’re not out of the woods yet. Another person may do what you do. In fact, maybe a lot of people do what you want to do. If that’s the situation, you’re going to have to permeate their market, because unless you get incredibly lucky and catch a client on a good day, you’ll probably have to take somebody else’s business, which means you better have a dynamic good answer for number 3 … Why you’re services is unique and more importantly, offers more worth to your customer!
My wife sold long distance for about a year and got out of the business. She told me that it is one of the most competitive businesses to be in. Why? Because everybody has a telephone, and 99.9 % of those people have long distance service. It takes one heck of a sales pitch to make folks want to swap something that most of them are comfortable with, specifically in the 30 seconds you’ll likely have before they hang up! Think Energy Choice for another illustration. Telling them why you’re better necessitates creating an awareness of a problem that the potential client may not even know they have. This is the most crucial aspect in surviving with consulting! You can be the finest engineer, accountant, or paralegal that there is, but if you can’t definitely explain what sets you apart from all the others, then rehearse this, “Hi. Welcome to Wal-Mart. Enjoy your day!”
The Many Hats You’ll Wear
Without going over the entire range of “How to become a Consultant, 101”, the last thing a determined young, or old for that matter, consultant in anything needs to be is fashion aware. Unless you happen to have bankrolled six figures of venture capital for your company, you are going to have to wear a lot of hats, and if some of them happen to clash with the rest of the wardrobe, it will be the ultimate business faux paus. For instance, as an engineer at IBM, my typical day may have revolved around the marching orders of running printed circuit peel tests, solving a processing problem on line number 3, and going to a status meeting to present to my administration when I’m going to finish the new inspection machine. Stimulating stuff, I know, but as complex or not as this might sound, these duties are relatively restricted in scope if not technical complexity. They’re all engineering tasks!
For my consulting firm, I have to juggle a lot more eggs, and if one hits the ground, “Splat!” A limited list of some of the “hats” that I, and most start up consultants, must wear are those of the…
- tax accountant,
- garbage man,
- shipping and receiving clerk,
- human resources,
- purchasing agent,
- accounts payable and receivable clerk,
- travel agent,
- customer service representative,
Eventually, many of these functions can be handed over or hired out, but until the business has a full plate of clients to feast on, these tasks typically fall on YOU.
There are many other avenues of expert consulting that I could examine with you, but that would take multiple days and I’d have to charge you ten thousand dollars for my time. Suffice it to say that if you believe you might wish to join the ranks of us consultants, be sure you want it for the correct reasons, that you know precisely what it is you want to consult on, you know your industry and your industry knows you, and do your calisthenics, because you will need to have Gumby-like versatility to do it.
Starting a consulting business is a daunting thing for the fledgling entrepreneurial soul. Distinguishing yourself online as a pro can be overwhelming. Need help getting your business growing faster? Karl Walinskas owns Smart Company Growth, a firm that helps businesses grow through sparking sales and controlling expenses and cash flow. He’s been published for years on better leadership, communication, and marketing practices for small business and authored the book, “Getting Connected through Exceptional Leadership”. You can read the Smart Blog for small business growth to learn more tips you can use today.