Self Employed
Have you always dreamed of being the boss? Or maybe you already run a service-based business, and you're looking to share your expertise with more people in a different capacity? If you are highly skilled at something people want to know more about, consulting may be for you.
Keep reading to find out more about the ins and outs of running a consulting business. In this article, we will cover what a consultant does and how you can launch your own consulting company.
What is a consultant?
According to entrepreneur.com, a business consultant is "A person engaged to provide professional advice or services for a fee, but not as an employee of the business that engages him or her." In other words, a consultant is a professional who is hired by a company on a temporary basis to help improve the aspect of the business. Services offered can mean anything from improving operations to raising company morale to help staff learn new skills.
What's the difference between a consultant and a freelancer?
Many people confuse consultants and freelancers. Possibly because consultants and freelancers both perform work or services for a company on a temporary basis. In both cases, there is usually no long-term job security, obligation or intent to pursue the relationship beyond a single contract or set timeline. Freelancers and consultants are also free to work for multiple employers at once.
The difference may boil down to expertise. Consultants are generally regarded as experts in their field. They are hired to provide advice or impart special experience regarding a specific matter.
Freelancers, on the other hand, tend to offer services that match a specific career or job title. For example, we often hear of freelance writers, artists, or designers. These professionals are not necessarily experts in their field. As a result of their expertise, consultants can generally charge more for their work.
Why would a company hire a consultant?
Hiring a consultant can allow a smaller company or start-up to save money. For instance, imagine a start-up with five employees. As the company grows, they need to hire five more people. Instead of adding an HR person for $75,000 a year, the company chooses to hire a consultant. For $30,000, this consultant helps the company find five new employees over three months.
Even if that seems like a high price point, the company will save money compared with the cost of hiring a full-time employee. They'll also save money in the sense that they won't need to pay employee benefits or contribute to the Canada Pension Plan on the consultant's behalf.
How to become a consultant?
If you want to be a consultant, make sure you advise people on something you know a lot about, in a field that you love. To echo the example provided above, a person who worked in human resources for ten years will have the experience required to provide HR consulting services. So the first thing you need to start a consulting business is expertise.
In an article in The Globe and Mail, Karen Aboud, former senior merchandise and systems manager for Hudson's Bay Company has the following advice for budding consultants: "Make sure you have lots of experience to back up the fact that you're saying that you can help these people. You've got to have enough, so it gives you authority."
From this perspective, being successful in the consulting world also requires marketing skills. You have to be able to sell yourself and convince company owners of the impact your services can have on their business.
Prove your worth
You will be more successful if you can back up your expertise. For this reason, it can be a good idea to create a website showcasing your services. Use this as an opportunity to tell people about your background. If you have an interest in public speaking, you might also consider creating a few videos about your services. Who have you helped? What's your story? What hurdles have you helped clients overcome? You can also share this information in a newsletter. Starting a mailing list is a great way to stay in touch with clients.
New consultants may struggle to get their first client. Starting a new venture can be frustrating, especially if you are eager to get your consulting business off the ground ASAP. If this sounds familiar, consider advising your first client for free or for a discount in exchange for a testimonial. A positive referral provides you with leverage and credibility that you can later use to expand your business and gain higher-paying clients.
