When launching your own consultancy or freelance practice, getting started can feel a bit like the Wild West of business.
The spectrum of freelancing is huge, ranging from small pocket change side hustles to huge 7-figure consulting solopreneurships.
And unfortunately, there are no one-size-fits-all industry best practices, all aggregated into one neat package for you to open. Where are the industry best practices for independent consultants?
Unfortunately, independent consulting/freelancing, as an industry, has no best practices. Ask anyone who consults and they will tell you that they’ve had endless questions about the best ways to build a client base or how to best market themselves, and all received conflicting responses.
The independent consulting market is huge, especially as more professionals opt to leave full-time work for more autonomy. However, it’s relatively new compared to other industries and both people and companies are just starting to sort out how this all works to their advantage.
It’s critical for long-term success to get it right in the beginning.
When you launch a consultancy or freelance business, it’s easy to get frustrated and then quickly burn out, especially if you feel like you’re constantly spinning your wheels and making little money. This can lead to giving up altogether.
Although you should allow yourself at least a year to develop a well-oiled machine of a business, it’s absolutely possible and common to make the equivalent to your full-time earnings within your first month of launch.
This requires doing your homework first–including taking a reputable online course or joining a community of successful consultants–to ensure you have a solid plan for getting it right and avoiding burnout. After all, having your own business is supposed to be better than working full-time!
Having run a flexible 6-figure consulting practice for seven years, then coaching hundreds of professionals on how to set up (or level-up) their solopreneurship and also negotiating close to 150 client opportunities for various consultants and freelancers, I’ve learned a thing or two about industry best practices and the common mistakes professionals make when launching their independent consultancy.
Here are the top three mistakes I’ve seen, and how to avoid them.
Mistake 1: Making your offering too broad
In the world of consulting, niche is gold.
Here’s why: being niche differentiates your business and makes you more valuable… and more memorable. It actually opens more doors, not narrows them as many people wrongly assume.
I’ve spoken to hundreds of consultants over the years and do you know the ones I remember? Only those with a specific and focused offering, either by industry, function, results or all three.
Stephanie Domanski, Founder & Consultant at Process Evolved, started out expressing to prospective clients that she was a resource who could assist in most any strategic initiatives.
“Obviously, knowing my skill set, I understood that meant I employed project management and organizational skills to develop executable plans that deliver results, but I could tell that my pitch wasn’t sticking. Now when I speak to prospects I say that our goal is to align the passion behind your business story with the analytics that drive critical numbers and, ultimately, attract outside investors. This much better-defined niche of ‘helping businesses build analytics to prepare for a capital raise’ has significantly improved the stickiness of my business.”
Defining your niche is critical. Get this one right, and you’ll make more money in flexible consulting than you ever made working full-time.
Just remember that your niche should speak in terms of industry, function and results, especially in terms of revenue, cost savings, or solving a pain point that a company can expect to achieve by hiring you.
Mistake 2: Offering a lower introductory price to start getting business
I see this mistake being made 75% of the time I speak to new consultants.
I hear all of the excuses like, “I just need to get clients…or….work is better than no work…I need to gain experience before I can charge more…or…I know this client personally…or…I want to prove my value before I can start charging more.”
I’m here to tell you that these are all terrible excuses for undercharging. Undercharging does two things:
1. It undermines your value, sometimes permanently.
2. It shows a lack of confidence in your own abilities.
And if you don’t have confidence in your abilities, how will a potential client?
Stephanie Blair, Founder & CEO of Know & Flourish says, “Referrals are key in this business, so where you start is not so far from where you end up. Take the time upfront to get clear with yourself about the value you bring, and set a price from there. Just because you are new at consulting does not mean you don’t already have valuable experience and skills to bring to your work. Remember your value, don’t apologize for it, and charge accordingly!”
Sarah Sharif, Founder of Experimental Civics advises not to fall under the assumption that you need to have a one-price-fits-all structure.
“New consultants and small business owners often don’t allow for flexibility in their pricing structure. You can have internal tiers for all of your services and pitch pricing sets to different audiences. I even have a special range for what I call ‘heart projects,’ which allows me to elevate the projects that really need and deserve my attention.”
Whether you price hourly, by monthly retainer, by project, by day rate or by value is dependent on your niche and industry. However, no matter which pricing strategy works for you, start with the number that best represents the value you provide and your many years of experience in your field.
If you don’t charge enough in the beginning, I promise that you will run into trouble down the road when you’re ready to charge more.
Mistake 3: Creating a business development outreach list of your target companies
Creating a cold-call/email outreach list is the very last thing you should be doing when trying to drum up those first clients.
In fact, successful consultants know that mining their existing contact base is the easiest, fastest and most lucrative way to grow a 6-figure consulting business.
The strategy I teach consultants is a 3-tier approach that maximizes the people in your network who are the most likely to open doors for your consulting practice, including any and all former bosses and supervisors, any and all former colleagues and subordinates, and alumni networks, friends, friends of friends, and any other random professionals in your LinkedIn network.
Grace Chung, Founder & Principal, Grace HR Consulting, advises new consultants and freelancers to “tap warmly” into their existing personal network.
“While you should have a solid idea of what kind of companies you want to work with, focus on reconnecting with old colleagues, mentors, and friends as sources for your first clients. My first three clients came through my long-time mentor, then co-founders I worked with in the past, and a referral from my professional network.”
When reaching out to this network, always try to meet up in person. Yes I know, everyone wants to have a remote business.
But if you want to put your best foot forward and stand out from the crowd:
Show up.
Bring them a fancy coffee.
Make it convenient to meet up and hard for them to say no to seeing you.
Make it fun.
Make it light.
Meet them where they are instead of asking for them to leave the office to see you.
The point of this outreach is not to mass email everyone and ask for consulting work. It’s to plant seeds and watch them bear fruit.
In Conclusion…
Having your own 6-figure consulting or freelance practice is possible for just about anyone who is confident, prepared and has a track record of success in their industry.
And if you can avoid the three most common mistakes I just told you about, you’re 90% of the way to the goal line.
The remaining 10%?
This depends on your ability to convey your value by showing companies how you will grow their business or save them money.
That makes 100%.
Are you ready to kick the 9-5?
Want to know more about how The Upside launches and grows consultancies?
Click here.
