So, you want to start an independent consulting business?
As I am approaching my 5th anniversary of Leading Mobility Consulting, I wanted to share some insights on the considerations I navigated when I launched my company. One of the unexpected questions I have received over the past five years was, “How do you start a business.” I have had this discussion with over two dozen colleagues spanning both the private and public sectors and with a range of experience from starting their career, mid-career planners looking for an exciting change and peers exploring opportunities post-retirement.
I won’t sugarcoat it. Starting your own business is not for the faint of heart. It requires a high tolerance of risk, some trial and error, and believing in yourself. But nothing big is ever done alone. You will need to find partners, clients, mentors, and supporters to help you find your way and cheer you on. I am sharing my thoughts here because I want my colleagues to be successful.
In a classic planner fashion, I have composed the following decision flow chart. Basically, if you can answer “yes” to the five guiding questions, I recommend that you seriously look at starting your own business. If you are uncertain about 1 or 2 questions, ask your colleagues and friends for advice to discuss your uncertainty and find a path to “yes.” Below is a brief description of each guiding question:
Are you willing to be bold and take risks? – I would say this is the most important question. As an independent consultant, you need to express your value proposition (e.g., specialized skill set) and communicate your value while differentiating yourself from your competitors. This will include trying new approaches to doing the work, communicating your values, and potentially taking on tasks that you will have to grow into.
Can you easily articulate your services and values? – This was a challenging question when I started out. This is about what your “pitch” is. How can your expertise and values help clients address their pain points, navigate challenging situations and produce technically sound deliverables? I would suggest diving into what your special sauce is. What are the top 3 or 4 skills that you think clients need? With these 3 or 4 skills, do you have example projects that you can lean on to demonstrate your capabilities? This is an excellent question to ask your colleagues before starting your business.
Do you have partners and collaborators with whom you can seek opportunities? – Here is a bit of realism. It is hard work and daunting to get your first solo assignment. With planning being highly collaborative and multi-disciplinary, most planning assignments require a team with varying skill sets and expertise. Connecting with other consulting companies to see how your skill set can augment and fill any gaps in specific opportunities is advisable. Even at the five-year point, my portfolio of projects are projects I lead with a team I assembled or I’m on a team as a sub-consultant. When you first started out, I found several other consulting firms were keen on having a discussion on how we could work together, which was promising and ultimately led to many different consulting assignments.
Are you prepared to constantly market yourself? – This question is not for the faint of heart. You will need to keep yourself front of mind in front of your clients and peers. This is vital for getting ongoing work and staying “relevant.” Networking events, conferences, coffee chats, LinkedIn posts, articles and more are great ways to keep in the line of sight of your clients and peers. You must be willing to discuss what you are up to, what work excites you and how you can help. It is also essential that listening is as critical as speaking; you will need to hear out your clients and peers on what help they may need from you and how you can co-create solutions to their technical and, at times, organizational challenges.
Do you have a financial runway to stay afloat for the first 3-6 months? – From the initial discussion with a client to the signing of a contract, it can be in the realm of 3-4 months, and then it will be a couple of months to commence the work, followed by the first invoice. So it will be six months before you will get paid. Having a financial runway of savings for the first six months of your company is advisable. Once you get into a cadence of contract work and invoicing, there will be financial stability, but you will need the runway when you start out.
I hope my thoughts on the key considerations for starting an independent consulting business are helpful. If you are thinking of going down this route, please feel free to contact me with any questions.