Workshop: Ten Ways to Start a Consulting Practice

 

Watch the workshop video from Spring 2010 and/or watch the workshop video from Spring 2012.

Download handout: 50 Ways to Consult Your Way Through Graduate School

Questions for Bennett McClellan and his answers

QUESTION:
What areas of consulting have the greatest demand right now? How to determine your consulting rates?
Paul

The greatest demand for consulting skills are always found where there is change, chaos, decline, rapid growth or some other aspect of transition or discontinuity.  I don’t know what field you are in, but I’m willing to bet that you can find an area where this principle will lead you to opportunity.


You can determine your consulting rates in three ways.

•    What are the solutions or services worth to clients? (Value)

•    What is the going rate for others to fill the clients needs? (Competition)

•    What is your time worth to you? (Cost, including opportunity cost).

If the formula does not work in your favor, you do not take the assignment.

 

QUESTION:
How do you reach your target audience? How do you charge a fee that is fair to both you and the consumer? How do you balance work and grad school? How do you market yourself?
Jessica

You reach your target audience in a number of ways (included in talk):
•    You define what you do, market it, and let your target audience find you
•    You define what you do, target it, and go looking for you audience
•    You define what you do, practice it, and ask clients to point you in the direction of your audience.

Balancing work and grad school is always an issue.  Balancing life and grad school is an issue.  So this is not an unique problem.  The advantage of developing consulting as your job in school is that it may give you more control over your schedule.  It may also put you in more jeopardy with respect to controlling your schedule, depending on what you offer as a consulting service.  I’ve had both experiences. 

I suggest the Charles Handy approach to figuring out what is the minimum money you need to make, figure out how much time that will require, then figure out the other stuff you have to do with your life.  Adjust the ratios until the percentage is 100%.  Don’t fool yourself into thinking you can work 110%.  The time you have is all the time you have.  Time is your scarce resource.  Your challenge is to allocate it to give yourself the most advantage on all fronts that are important.  Study. Earnings. Relationships (if that’s important). Health.  It’s a balance act.

Fees are always “fair”.  If the client or consumer does not see the value in the fee you proposed, then they will not pay for your services.  You really don’t have to worry about fairness, except with respect to whether you are being fair to yourself. 

 

QUESTION:
I would like advice on becoming a vocal consultant for singers. What avenues should I be pursuing to assist me in my endeavor?
Stacy

Have you established an expertise in the field?
Have you established contacts in the field?
Do people who can refer singers to you know you? 
Like choir directors or vocal cord therapists?
Do they know you want to do this kind of work?
Do you know any singers that need your help?
Have you helped any singers? 
Will they give you testimonials?
Is there a publication, blog spot, etc. for helping singers?
Pursue this kind of thinking to find the avenues.

QUESTION:
How can I decide the job if I have several options of what I would like to do?
Yasuhiko

Passion. What really gets you excited?  No job is forever.  Not any more.  Consulting careers are like mosaics.  You do this for a while.  You do that for a while.  You decide how it adds up.  Because it does add up.  For the next job you do, do something you are passionate about.  Questions:
•    Which of the opportunities makes you the most excited?  Why?
•    If there were no other considerations (money, location, family, etc.) what would stop you from taking that job?
•    So what’s stopping you?

QUESTION:
My question is what the best or the recommended structure is for the consulting company (C Corp, S Corp, etc.). I already have a name and employees set up but I'll need to file the articles of incorporation and find opportunities. So any advice on how to find new consulting opportunities would be greatly appreciated.
Shanna

I’m not an attorney or a CPA, so this is not advice in that sense.  Structuring a business always involves the question, “What do we want to achieve with a structure?”  The first reason you as a person might have a corporation is to give yourself (family, assets) a margin of protection in case something goes wrong.  Incorporating as opposed to operating as a DBA provides some limitation of liability.  Another reason for incorporating is that eventually you want to bring in outside capital.  C Corp allows you to sell shares.   You report income to the IRS as a corporation.  When you pay yourself or other employees you issue yourself a W2.  “You” get taxed twice.  An S Corp is your own private company and profits or losses are reported as part of your income.  “You” get taxed once.  If you are starting out, the S Corp has less burdensome filing requirements.  It can be converted later to a C Corp.  Also, you might want to consider an LLC, which seems to be a popular form with independent consultants.  Or even an LLP.


QUESTION:
How do you go about pricing your time?  Or finding out what competitors are charging?
Tim

See answer to Paul above regarding pricing your time. 

Regarding what competitors are charging, ask.  Others are usually eager to brag.  You don’t have to believe what they tell you, but that’s what they are putting out there.  Share.  Here’s what I charge.  What do you charge?  Another way of asking, “If I employed you as a subcontractor, how much would it cost me?”  Also, ask prospective clients.  “How much would this be worth to you to solve?” Or “What do you expect to pay?”  Or “How much did you budget for this activity?”  Or “What did you pay the last person who did this kind of work for you?”  Don’t be shy.  You are being paid to ask questions.   Don’t be shy about asking questions that matter to you.  Professionals expect this from other professionals. Also, opening the conversation makes it possible to negotiate or set up contingency payments if that seems like a good idea for both parties.


QUESTION:
How do you find out which employer might need student consultants? How do you sell yourself to the market?
Yanyang

We cover the question of how to find clients and market yourself in the talk. 
But here’s one tip in terms of positioning yourself.  Don’t think of yourself as a “student” consultant.  You are not studying consulting.  You are a consultant.  You happen to be enrolled in school. Like education, or psychology, or business or religion.  That’s just one aspect of who you are and what you do.  It may or may not have anything to do with your consulting activities. 


QUESTION:
1.  How would I seek out potential clients and, 2. What is a reasonable amount to charge given that I'm still a graduate student?
Heidy

See comments above.  Drop the “given that I’m still a graduate student” as part of your pricing consideration.


QUESTION:
I want to ask him how to build an industry connection for a fresh graduate, especially a foreign student.
Jiali

Ask.  Knock. Write.  Phone.  Email.  Attend meetings where you are going to meet people.  Do something that gets attention, even if it’s not in the field.  Connect with people.  Offer to do something useful for someone who has connection.  Get yourself interviewed by a newspaper.  Even if it’s not a topic your field.  Assert yourself as a knowledgeable person with divergent interests.
When I worked as an independent consultant, I sometimes felt like I did not learn new information, processes, systems, or technologies because I was not able to share knowledge with others, such as happens naturally in a workplace. How did you continue to connect and learn from others as an independent practitioner?
Agnes

Go to school. Read. Join groups. Engage in dialogues with colleagues.  Network.   Set up a Tuesday morning coffee klatch with other professionals.  Position yourself to interview others in your field – like doing articles.  Attend seminars.  Conferences.  Start a website.  Blog.  Reach out to those who publish.  Seek a mentor or a mentoring group.  All the usual stuff you would do to keep up with your field.  Whether in academics or in professions. 

The main difference between working as an independent consultant and as an employee is that the environment you work in as an independent consultant does not provide as much happenstance learning and client referrals so you have to take control of how these things happen.  It’s a very valid concern and one that makes you scramble more than if you were employed by a larger firm that has a lot of people doing what you do. 

QUESTION:
How do I narrow down the field within HR - e.g. OD or Training & Development, in which I might want to start consulting practice while I am still in school?
Meeral

If you actually have that choice, then go with the advice on following your passion given to Yasuhiko.

If you don’t have that choice today but are speculating, then follow opportunity.  What calls you?  What doors open? Which of those doors can you go through now? Which might take more training?  Use each opportunity to learn what might fit into your portfolio.  Perhaps there is another part of your field that you have not yet considered.  What you are doing as a consultant is investing time now in order to learn what you could do, should do and would love doing more of later.  Where can you get the best return on the time you propose spending?


QUESTION:
I would appreciate practical suggestions for making contacts as well as any other information that would be difficult to come by if you have not yet been out in the field. Some "do's and don'ts" from his perspective would be useful.
Bonnie

Do’s and Don’ts are always interesting.  Let’s try thinking of some of each.
What has been the most effective way of advertising and promoting your consulting expertise to the marketplace?
Byron

Referrals.  By far the most effective way to promote yourself is to let others do it for you.  Referrals.  Bain & Co. has adopted the “Net Promoter Score” system as a predictive device for focusing on the question of how to obtain more, and more favorable, referrals.  As a consultant, the people who loved your work are your best promoters. 

QUESTION:

What are good places to provide educational technology consulting?
Amanda

This is a little like asking the bank robber what’s the best place to get money. Where is there a need for educational technology? Who has the need?  How can you find them? How can they find you?  What are they looking for?  What do you have to offer that fits their needs?

QUESTION:
The speaker might hit on this point, but I am particularly interested in the 'personality' side of consultants. I wonder if it takes a particular type of person to be a successful consultant, let alone an entrepreneurial one.
Danielle


I’m also interested in the ‘personality’ side of consulting.  My doctoral research has to do with understanding how strategy consultants are evaluated.  In thinking about my own work and the words of those I interviewed, I’ve been struck by the idea that there might be this thing called a “Consulting Consciousness.”  Here’s an interview quote from a former colleague who’s worked as a management consulting his entire career:

Probe: So do you still love consulting? 

I’m curious.  I’m intellectually curious about the way things work and I want to have high leverage and impact.  I look at jobs CEOs do and compared to what I do, I spend more time thinking and less time doing crap.

I think this would be a really interesting research topic.  There is clearly the entrepreneurial side of making consulting of any kind your career.  But there is also this contradiction that consulting is selling replication but not dwelling in replication.  Most people who work in organizations sell and dwell in replication.  Think about what a job description is.  It’s a menu of things the person filling the job will replicate.  But you as consultant are constantly working to make what you know and what you do either irrelevant or obsolete, and yet not alienate everybody you know while you do that.  There has to be some kind of personality type associated with that kind of behavior. When you discover what it is, I’m looking forward to sitting in on that talk!


QUESTION:
I'm interested in interning at a social media/entertainment marketing firm.  All I have found are unpaid, but is this a good foot in the door?
Jared

A foot in the door means the door opened.  


QUESTION:
One question I might be interested in hearing an answer to, if the speaker knows the answer, is how many people with degrees in Psychology or Sociology or other behavioral sciences are hired by/work at consulting firms.
Also, how much does a background in the arts (as in experience being a professional artist, musician, etc.) come in handy when trying to start a career in media consulting?
David

I have no idea how many people with degrees of any kind are employed by consulting firms.  Sorry!

I do have a view on how a career in the arts may come in handy in the media world.  The question in the media world is always this: Are you one of us?  If yes, then let’s talk. If no, then why do you want into our business? 

When you have experience that is relevant, you feature that relevance.  When you need experience that is relevant, you seek that experience.  Sometimes the experience you have can translate into areas where you have no experience, but it’s going to be up to you to build that bridge.  You have to assert that there is relevance and here’s why.  Start by making a list: Here are 10 ways a background in the arts might come in handy when trying to start a career in media consulting.  Then when someone asks, you have something engaging to share: a perspective. 

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