Exactly what does it mean to become a consultant and, even more importantly, how can you become filthy rich by doing it? The process of becoming a successful consultant comes down to how well you can leverage your reputation as an expert and leader in your industry into paying clients. Since the odds of success aren’t high if you simply sit back in your chair and wait for the phone to ring, you need a process by which you can claim the title of expert consultant. We have a few ideas about how to go about and, as is always popular, we’ve broken it down into bite-sized chunks of information.
1. Apply shoe leather to concrete – We’re not suggesting you actually go door-to-door soliciting business, though that might be an option at some point. What we’re talking about is using the contacts you’ve built up to generate business. By the time you’ve risen to a level high enough in your industry to consider making the move to freelance consulting, you should have a Blackberry or iPhone full of movers and shakers who would send clients your way if they only knew you were looking. Make sure that they DO know by telling them. Having a list of contacts makes the job of calling so much easier but don’t let a lack of quality contacts cause distress. Make a list of companies you’d like to have for clients, and learn how to cold call successfully.
2. Anchor clients – An anchor client is one who sends enough regular business your way that you can count upon a certain amount of monthly income from them. Every consultant needs at least a few anchor clients. The more you have, the easier it is to create a predictable income stream. The best kind of anchor client would sign you to an annual contract that pays a monthly retainer for an agreed upon number of hours of your services. This is not to discount the value of a one-off project for someone you’ve never heard of, because that’s exactly how anchor clients can be discovered. At Speaking of Wealth, we suggest you lock in a few anchor clients, then fill in your spare time with others.
3. Get specific – Hopefully, you will have already narrowed down your specific niche within the industry before you start cold-calling and knocking on doors. Even if you have a broad range of experience, consider defining yourself narrowly. Choose carefully. Most companies seek out a consultant who specializes. They may view a “generalist” as not having the specific skills they seek, even though you might be perfectly capable of servicing them. We live in an era of specialization. To find success, get specific!
But the real question all budding consultants want answered is how much money can you make? In other words, is it worth it to become a consultant? It’s hard to answer the question of salary too exactly because the range is all over the place. Some consultants might barely squeeze out $50 an hour while others easily haul in close to $400. A lot of factors influence the final tally: geographic location; the industry you’ve chosen; your reputation; the competition. And we probably don’t need to say that it’s a lot easier to become filthy rich as a consultant making $400 an hour than $50.
The bottom line is if you want to make lots of money consulting, you certainly can. It helps if you can avoid missteps in the early stages of career development. Remember how we suggested you choose your niche carefully? Do your research and find out what the average pay in your niche is. Some subject matter simply doesn’t support $400 an hour pay no matter how good you are at it.
Another question to consider is whether you want to hire on at a company and be paid a salary, or or you ready to freelance it completely, surviving at the whim of your own wits and motivation? The answer to this question depends primarily on your personality. Do you need the security of a regular paycheck to keep from loosing your mind, and are you willing to give up a potentially higher rate of income to achieve it? There’s no doubt that true freelancing probably offers the most potential economic reward but also comes with the greatest risk of of an embarrassing crash and burn. We can’t answer that question for you. Just make sure that it’s clear in your head which way you want to go before you take the first step.
And it’s not out of the question to work full-time at a company while developing a part-time stable of freelance clients on the side. Make sure you keep the two firmly separated though. You could find yourself in big trouble if you employer thinks you’ve been poaching clients on company time.
There. You should now be on your way to becoming a filthy rich consultant. Did we leave anything out? Let us know! It’s ever so easy to fill out a comment below.
The Speaking of Wealth Team
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