The New Business of Consulting: The Basics and Beyond

by Elaine Biech

Overview

Everything you ever wanted to know about consulting—a practical roadmap for aspiring entrepreneurs

Seismic changes occurring in the workforce are leading to more and more people entering the world of contract, freelance, and contingency work. Rapid changes in demographics and advances in technology have led companies and talent to engage in profoundly new ways and consulting is one of the keys to success.

The New Business of Consulting is authentic and practical, and shares the knowledge and skills required to start and grow a successful consulting business. From how to make a smooth career transition, to how to determine a consulting fee, to how consultants inadvertently create a bad reputation, it covers everything you need to know to thrive and flourish in this competitive field.

• Covers contemporary topics, such as how to achieve success in the gig economy
• Discloses a reliable technique to land the clients you want
• Presents options to help you balance your life and your business
• Prepares you for naming your business, managing critical financial issues, and building a client relationship
• Shows you how to take your income and impact beyond working as a solopreneur

The crucial start-up days of a consulting business may be frenetic and fraught with questions. This new edition provides sanity and answers all the questions. It includes practical tools, templates, and checklists that you can download and implement immediately.

Product Details

ISBN-13:	9781119556909
Publisher:	Wiley
Publication date:	05/07/2019
Pages:	368
Product dimensions:	7.40(w) x 9.30(h) x 1.30(d)

About the Author

ELAINE BIECH is a dedicated lifelong learner who believes that excellence isn't optional. She has been consulting for more than 35 years helping global organizations and individuals reach their potential. Elaine has been featured in The Wall Street Journal, Harvard Management Update, Investor's Business Daily, and Fortune. She has published more than 85 books, including Training and Development For Dummies, The New Consultant's Quick Start Guide, and the Washington Post #1 bestseller, The Art and Science of Training.

Read an Excerpt

Chapter 1: What Are You Getting Yourself Into?

"A person who never made a mistake never tried anything new."

Albert Einstein

Have you ever admired consultants who zip into a company, capture everyone's attention, accomplish in days what you've been struggling with for months, and waltz out with a big check?

Ever thought you might like to be a part of that glamorous profession? This book will help you determine whether you have what it takes to be a consultant, as well as whether the consulting profession offers what you desire as an individual.

What is Consulting

Consulting is one of the fastest growing businesses of the decade. In The Global Management Consulting Marketplace: Key Data Forecasts and Trends (1997), Kennedy Information, the leading source on management consulting, predicts that management consulting will grow an average of 16.1 percent globally per year through the year 2000. Whether companies need help downsizing, installing a new computer system, building an executive team, or breaking into the Chinese market, they can call a consultant to assist with the effort. The organization re-questing the assistance is usually called the "client.') The term can refer to the en-tire organization or to the person who actually made the call.

Consulting is the process by which an individual or a firm assists a client to achieve a stated outcome. The assistance can come in the form of information, recommendations, or actual hands-on work. A consultant is a specialist within a professional area who completes the work necessary to achieve the client's desired outcome.

Consulting is not a descriptor that identifies a profession in itself Unlike doctors or accountants, highly skilled consultants come from very different backgrounds. A qualifying adjective is required to identify the form of service or the area of expertise, for example, management consultant, engineering consultant, or performance consultant. Although consulting is not a "profession" by definition, it is often referred to as "the consulting profession." For the sake of convention, I will refer to the "profession" in this book.

The actual work of a consultant can vary quite a bit, depending on the area of expertise offered. Every consultant must be a subject-matter expert in some area-management development, organization development, training, or any profession, such as computers, security, writing, marketing, or a thousand others.

Even after you determine an area of expertise, you will want to select the actual work method. For example, if you decide to focus on the training field, you could develop and deliver your own material or subcontract material development to another person while you deliver it. You could develop material for others or you could deliver others' materials. You could even be certified to deliver others' courses, especially for the large training supplier firms.

Finally, if you are a generalist, such as a management consultant, you will need to determine whether you will focus on a specific industry.

Four Ways To Get Started

Taking risks. Embracing ambiguity. Practicing flexibility. Balancing both process and people issues. Managing multiple responsibilities. Tolerating extensive travel. Communicating effectively. Learning continually. Proving your worth again and again. Does this describe you? If you responded with a resounding "Yes!," consulting may be an ideal career move for you.

If you decide consulting is right for you, what opportunities exist? Think about your ultimate goal. Do you want to be a partner in one of the "Big Six"? Will you eventually own your own firm? Do you think you will always want to consult as an individual? Do you want to teach part-time at a small university and consult on the side? There are at least four ways you could enter the field:

1. As an employee. Numerous employment opportunities exist for you. You could join a large national consulting firm. The demand for consultants has led to a fierce competition for talent. According to Kennedy Information (1997), M.B.A.s from top schools can expect to be offered a base salary over $90,000 as new consultants with such a firm. Joining a large firm will give you instant name recognition. You could also join a small firm. Although your salary would be only half what it could be with one of the Big Six, you would have less pressure, more opportunity for a variety of projects, and more involvement in the entire consulting process.

2. As a subcontractor. Rather than becoming an employee, you could subcontract with a firm. Many businesses and consulting firms are looking for subcontractors who will fill in the gaps left as a result of downsizing or launching new initiatives. As a subcontractor you may have a less secure position, but you will have flexibility while gaining rich experience and developing a sense of the market.

3. Part-time. If you're not ready to take the plunge, you could consult part-time while keeping your present job. Some people use their vacation time and weekends to conduct small projects-with their employers' approval, of course. Consulting is natural part-time work for college and university professors.

4. Self-employed. You could also start your own consulting practice. This book addresses this last opportunity.

Why Consulting Now?

Consulting is one of the fastest growing professional areas in the economy. Why? Why now?

Turbulent times have increased the number of times that consultants are used to help organizations make their way through the processes of implementing technology, going global, improving processes, and negotiating mergers. The consulting projects have increased in dollar amount and duration. It is not uncommon for large-scale projects to cost more than $50 million over a five-year period. As Charles Stein (1994) of the Boston Globe states, "Once upon a time, consultants were like dinner guests: They came for a brief visit, gave advice and went home. Now they are like guests who come for dinner, move into the spare bedroom, and stay for a year or two.'

Trends

Two trends in the business world have brought tremendous implications for consulting. First is the trend toward outsourcing more and more services. Corporations will continue to hire more temporary professionals to assist when needed, as opposed to adding highly paid, permanent staff. Consultants temporarily provide the "people power" to complete the work at the time it needs to be completed.

The second trend is that rapid changes occurring in the world make it almost impossible for the executive team to remain knowledgeable about their industry, remain focused on their customers, stay ahead of their competition, and know instantly what to do when these factors collide in a negative way. Consultants offer the knowledge, information, data, and systems to solve the puzzle. They fill in the blanks. When the task is complete, they are on their way.

That's the demand side. What about the supply side? The same organizations that are cutting permanent staff to keep payroll down are providing a steady sup-ply of people who need jobs and find that they can do consulting. In fact, many people cut from their jobs today may be placed in the same company as temporary employees.

Why this shuffling of the same bodies? Consultants are often more cost-effective for the organization, which can hire the skill it needs on an as-needed basis rather than train and educate staff for skills that may not be used again. Consultants can usually complete projects faster as....

Table of Contents

Exhibits and the Companion Website xi

Foreword xv

Acknowledgments xix

Introduction xxi

One So You Want to Be a Consultant 1

What Is Consulting? 3

Why Consulting Now? 4

Four Ways to Get Started 10

Myths About Consulting 17

Realities and Rewards of Consulting 22

Just What Are You Getting Yourself Into? 23

For the Consummate Consultant 29

Two Talents and Tolerance 31

Your Skills for Success 33

Roles You May Play 40

Signs of a Mediocre Consultant 42

Your Personal Situation 43

Caution: Business Owner Ahead 45

Entrepreneurial Characteristics 45

For the Consummate Consultant 50

Three Dollars and Sense 51

How Much Income Do You Require? 52

How Much Should You Charge? 56

Selecting a Pricing Structure 64

Other Pricing Decisions 68

Other Charges 70

Fee Increases 71

Ethics of Pricing 73

Money Discussions 75

Value of a Guarantee 76

For the Consummate Consultant 77

Four Starting . . . 79

Why Some Start-Ups Succeed and So Many Fail 81

What’s in a Name? 82

Selecting an Accountant 86

Selecting a Legal Entity 87

A Business Plan to Guide You 89

Plan to Use Your Business Plan 95

Start-Up Costs 100

Finding Your Niche 102

Your Image Is Everything 105

Experiencing the Experience Maze 108

For the Consummate Consultant 113

Five . . . And Staying in Business 115

Marketing from Day One 117

Creating Your Marketing Plan 118

Using the Internet 128

Surprising but Practical Th oughts on Marketing 131

Tactics for Low-Budget Marketing 136

Contacting Potential Clients 141

Proposals Lead to Contracts 148

Why Would You Refuse an Assignment? 150

For the Consummate Consultant 151

Six The Cost of Doing Business 153

Keeping Records for Your Consulting Business 155

Watch Your Cash Flow 156

Track Your Expenses 164

Set Aside Petty Cash 172

Charge Your Client 175

Project Revenues 179

Deal with Bad Debts 179

Keep an Eye on Your Numbers 181

For the Consummate Consultant 186

Seven Building a Client Relationship 187

Relationships: It’s Why You’re in Business 189

The First Meeting 191

Four Phases of Building a Client-Consultant Partnership 193

Adding More Value 204

How Many Clients Do You Need? 211

How to Improve the Relationship Continuously 211

It’s the People 214

Maintain the Relationship Aft er the Project 215

Ensure Success 216

For the Consummate Consultant 218

Eight Growing Pains 219

Adding People 221

Growing Without Adding People 238

Expand Your Geographical Market 247

Doing Everything You Can to Grow Your Current Business 249

For the Consummate Consultant 253

Nine The Ethics of the Business 255

Consultant to Client 258

Consultant to Consultant 265

Client to Consultant 269

Parting Ethics Shots 270

For the Consummate Consultant 272

Ten Exude Professionalism 273

Competencies to Boost Your Consulting Success 275

Continuing to Learn 286

Balancing Your Life and Your Business 289

Managing Your Time 291

Giving Back 297

For the Consummate Consultant 299

Eleven Do You Still Want to Be a Consultant? 301

A Week in a Consultant’s Life 304

Visualizing Success 316

Taking Action 317

Get Ready, Get Set . . . 318

For the Consummate Consultant 324

Appendix 325

Helpful Resources and Links 325

Reading List 327

About the Author 331

Index 333

What People are Saying About This

From the Publisher

"This book is filled with real-world, practical and proven tacticsthat, when used, do build successful consulting practices. It is amust-have resource for people who are thinking of becoming aconsultant and for anyone who already is one!"
—Dana Gaines Robinson, president, Partners in Change, andcoauthor, Performance Consulting and Strategic BusinessPartner

"If I were just starting in the consulting field today, this isthe one book I would choose to advise me, caution me, support me inmy business, and 'professionalize' me! Complete and highlyreadable."
—Marjorie Blanchard, cofounder, Blanchard International

"According to my calculations, I could have easily doubled myincome if I had a copy of Elaine's book 30 years ago when I startedmy consulting business. But I am not depressed because I plan tocontinue in my consulting business for 30 more years and the bookhas many new pieces of practical advice that I can immediatelyuse."
—Sivasailam "Thiagi" Thiagarajan, The Thiagi Group

"Consulting is the art and science of creating solutions! ElaineBiech's The Business of Consulting is a valuable handbook to thefield, the practice, and the logistics of the world of consulting.The second edition is even better!"
—Elliott Masie, president and CEO, The MASIE Center andLearning CONSORTIUM

"The extraordinary quality of this book is that it is a primerfor the person entering into the consulting world while at the sametime it is replete with practical wisdom for the most seasonedprofessional. Consulting is an occupation with much mysterysurrounding it. Biech eliminates that mystery by shining the lightof her experience onto the practical activities that makeconsultants succeed. What a gift!"
—Jack Zenger, CEO, Zenger-Folkman, and coauthor, TheExtraordinary Leader and Results-Based Leadership

Editorial Reviews

"Here are the nuts and bolts for a successful career in consulting. A few hours with Elaine's book will save you years of trial and error." —Jerry C. Noack, , vice president/group publisher, TRAINING Magazine

"If I were just starting into the consulting field today, this is the one book I would choose to advise me, caution me, support me in my business, and 'professionalize' me!" —Marjorie Blanchard, , chief financial officer, Blanchard International

"Every consultant should apply her principled practices to guarantee satisfied customers." —John E. Gherty, , president and chief executive officer, Land O'Lakes

"This book is filled with real-world, practical and proven tactics that can be used to grow and build a successful consulting practice. It is a must-have resource for people who are thinking of becoming a consultant . . . and for those who already are one!" —Dana Gaines Robinson, , author; president, Partners in Change

"The Business of Consulting will serve as my consulting practice workbook. The comprehensive coverage of the subject—along with the practical tips—make it the best tool I have." —Pam Schmidt, , vice president, American Society for Training and Development (ASTD)

"Read her book. She shares all her secrets!" —Gail Hammack, , regional vice president, McDonald's

From the Publisher