A vital component of being a successful consultant is to define one's business. At first glance, this seems like a very simple statement that would need no further clarification. It would seem obvious that a consultant would define their business before they ever began consulting. The perception of a business may be very different depending upon who perceives it. Determining what the client is actually buying is crucial for the consultant to be successful. A consultant’s listening and interpretation skills may be challenged when they are meeting with prospective clients for potential business. The client may say they want one type of service when they actually need another. A consultant must walk a fine line between giving the client what they are asking for and steering the client to what the consultant thinks the client actually needs.
Setting Fees
Consultants often learn a tough lesson on the psychology behind setting fees for services while trying to land their first contract. Determining the value of one’s services is a difficult task. The consultant wants to stay competitive, but also needs to cover costs and make a profit. Neglecting to take into account that setting a price for services too low gives the impression that the work delivered may be substandard is a common mistake. Increasing fees to be more in line with what others in your field are charging just may land you your first contract. The true value of the services the consultant offers is subjective and constantly changing based on supply and demand. A consultant must continually monitor the macro environment to ensure that they remain competitive.
Generalist or Specialist?
Determining whether a consultant should be a generalist or a specialist will in part be determined by the consultant’s skill level. Consultants may find the generalist approach very difficult to manage. The consultant must spread their time between administrative duties such as typing, filing, billing and answering the phones, and managerial duties such as acquiring new clients, negotiating contracts, and delivering their services as promised. The skills required to be competent in each of those areas can be very different and switching back and forth between them can be draining. Choosing to specialize allows the consultant to focus on the area in which they have the most expertise, however, this may also limit them in the number of clients they can serve.
Minimize Costs
Regardless of how specialized the consultant chooses to become, keeping costs minimized will relieve some of the financial uncertainties of starting a business. Running the business from a home office, having business cards and stationary printed at an office supply store, and using as many existing resources as possible such as computers, phone lines and office furniture will keep expenses minimized while the consultant is getting up and running. Once income starts trickling in from the business, that income can be used to replace or add additional resources to the business allowing the business time to grow and support itself.
Ask for Help
The consultant also needs to know when to ask for help. There will most likely come a time when the consultant can no longer handle the business on their own. They may be forced to stop accepting new business, take on a partner or outsource some of the work. These decisions will not be made lightly. The consultant needs to recognize when they need help and not be afraid to ask for it.
