On Your Own
Becoming a Consultant in Your Own Field

A new business is like a little baby. You need to nurse it along, watch it every second, know that it’s going to burp and cry. You have to figure out what’s wrong and take care of it.

Fifteen percent of those who attend the Five O’Clock Club are consultants in their own field and want help with their “babies.” Some want to consult temporarily, but others would like to give up the corporate life (“It gave me a false sense of security. I’ve lost three jobs in a row.”) and try the consulting route.

The Five O’Clock Club method of developing leads and interviewing is exactly the same for those looking for full-time employment and for those who want consulting assignments. However, there are a few differences for those who want to run a consulting business rather than simply landing one or two assignments.

Just like those who are looking for full-time work, consultants should define their target markets, segment them, and develop a marketing strategy aimed at each one. However, it’s hard work for any firm to develop strong relationships and become well known in its target markets. Therefore, it’s better to identify and develop your markets and offer them a number of services, rather than offer a narrow service to all of the markets in your geographic area. Focused marketing is key. Here are other hints:

· Remember that the business is 1/3 marketing; 1/3 administration; 1/3 delivery of your consulting services.

· Develop written plans for each market, study what your competitors are doing, determine how to differentiate yourself from your competitors and how to keep future competitors from entering your market.

· One-on-one marketing means getting to know each customer and getting repeat business and referrals from each customer.

· Mail quarterly to at least 500 names—depending on the business you’re in.

· Keep track of your costs for each job or project. Then calculate the hourly rate you are actually making rather than what you think you’re making. Most consultants over-service their accounts. 

· It’s okay to lose money when you’re starting up but know whether you’re making money or losing it and how much.

· Keep track of your revenue by category. Do your clients say they want one kind of service but actually purchase another? For example, many Five O’Clock Clubbers have said they’re interested in Executive Coaching to help them do well in their jobs, but they actually purchase only our job-search advice.

· What profit margin are you aiming for? Rule of thumb: If you operate solo, charge two times your direct labor expense (see the table in our book, Interviewing and Salary Negotiation) and then keep your other expenses in line.

That’s it for now.

Cheers, Kate
President and Editor-in-Chief