Consulting is the great fallback position. Generally the way people get involved in consulting work has to do with an unwanted or unexpected excess of time. Sometimes that time came in a positive way such as a government employee who has hit the retirement date and wishes to maximize their income while doing something different. Unfortunately, More often than not, an interest in consulting comes as a response to a layoff.
Logically it makes sense, because being professional individual contributors we have the tools that are required to be successful as a consultant. The first thing that we have to be successful is a niche expertise area. Maybe you’re a human resources training expert, or maybe you are a retired government employee, or maybe you are a former marketing director in a specific vertical. No matter what your background there is always an expertise area in our highly complex world. Additionally, after several years in an industry the professional individual contributor is generally quite knowledgeable about the right way to do things and the wrong way to do things.
The second tool is usually the time, wanted or unwanted, to try and start the consulting business. It’s this excess of time that let’s PIC’s believe that they can be successful as a consultant. If you follow the rule of 2.5, one of the very quickly understood concepts for anyone who has had a part time gig, is that the time constraint is a major reason keeping the part time business from becoming big enough to be self sustaining.
There are several challenges to Consulting: the first being that it’s a feast or famine type of position. A consultant can bill tremendous amount of money for their hours on the job, but that is because that money has to pay for all of their down time and all of their marketing and prep time, not to mention the time it takes to stay as an expert in their field. This requires massive financial reserves to smooth out the highs and lows.
The second challenge is one of perception. When professionals get involved in consulting, it’s an optimistic time. They really think that the consulting work will come because has to do with an organization’s need of their expertise to solve some sticky systemic problem. I have found that the reality is far from that. Consulting work is just another variant of contract labor. The idea of being hired on as a consultant to fix a problem that the company can’t fix itself is a real concept but much more rare then the company wanting to hire a “consultant” to get some task finished. These consulting gigs generally are much lower paid than a contract where the expertise demand and buy-in from the organization is high enough to get the right person to fix their internal system, as opposed to working on some task within the system. Make no mistake, true consulting, the consulting that pays tremendous amount is more about fixing systems than working in the systems.
A final challenge is the challenge of the runway, this is much less of a challenge if you are retired with enough of an income and other benefits such as Health Care (I believe it’s one of the big two reasons why there are so many older consultants, the other being a prejudice in favor of grey hair when looking for an expert). It’s similar to the challenge of time, except runway is really about the initial period of time needed to get the business off the ground. To allow the amount of time it takes to build enough of a funnel to generate sufficient business to turn the consultancy from an idea or a hobby to a true going concern is an unknown and usually takes many more years than the severance or unemployment checks allow for.
It is quite possible to be successful as an independent consultant in the professional world. the right mix seems to be as much related to luck as it is too hard work. If you can find an organization that has a systemic problem and enough buy-in/desire to fix it; and if you do a good enough job fixing the problem; and if you have enough reserves for runway and operations, then there’s a high probability of success. By success I mean you’ll get that next high-paying gig and the one after that. Then all you have to do is understand this seasonality of your industry.. and build your efforts around that cycle. Congratulations, your a real consultant.
If on the other hand your trying out being a consultant as your fall back because you haven’t had any real response to your resumes, and you only have a limited time to make it work, then maybe you should just realize that your going after contract labor and just redefine your expectations. Then it won’t seem like your business is failing while you continue to search that next job.
After writing all of this I’m wondering if there is a market for a consultant for people who want to start consulting businesses, or maybe that’s just a bit too meta.