Consulting: Is It Really for You? by Bob Bly Last year, industry, academia and the government paid consultants more than $30 billion to train employees, give advice and solve problems. The average consultant charges $535 a day, and a few make as much as $2,000 a day. At these rates, it's no surprise that thousands of managers, teachers and administrators have left their jobs to become independent consultants. The consultant is a specialist in a field, and one type of consultant much in demand is the communications specialist. As John Naisbitt points out in his book Megatrends (Warner Books), our society is "drowning in information," while basic communication skills are on the decline. Writers, teachers, artists and other professionals are needed more than ever to help American business communicate. If you're contemplating a career as a consultant, you'll want to know what it takes, how to get started, and whether it's for you. Let's take a look at some of the questions would-be consultants should ask. And the answers. Is consulting right for me? What does it take to be a consultant? "A strong stomach," replies management consultant Gary Blake. Self-employment offers a potential for greater financial rewards and self-fulfillment than working for someone else, but there is also greater risk and uncertainty. I Inthe book Setting Up Shop: The Do's and Don'ts of Starting a Small Business (McGraw-Hill), Randy Baca Smith discusses the personality traits shared by most entrepreneurial people. Smith's ideal entrepreneur is: a self-starter, a "people person," a leader, a good organizer, a hard worker, trustworthy, responsible, decisive, energetic and in good health. For consultants, I'd add a few more items to the list: The consultant has to be part loner, part extrovert. As a consultant, you'll spend 90 percent of your time working alone. But you must be enthusiastic and outgoing in your meetings with prospects and clients. Consultants must be good sales-people. Unlike corporate communicators, whose supervisors set the assignments, the consultant must land a contract for each job. If the idea of going out and selling yourself makes you uneasy, consulting is not for you. Consultants enjoy their work and are exceptionally good at it. Consultants despise hierarchies, long chains of command, rigid thinking, inaction and set routines. They embrace new problems and projects, unconventional approaches and unstructured environments. They're curious, creative , self-confident and optimistic. Take another look at these lists. If your reaction is "That's me," then consulting may be the career for you. What are the advantages and drawbacks of consulting? Communications consulting has many advantages: independence, autonomy, variety, money, the opportunity to set your own goals and pursue your own interests, and the status of being recognized as an expert in your field. Naturally, there are negatives as well as positives. Separated from the corporation, you might miss the prestige, the power and the sense of belonging you had as a communications manager. You'll give up the benefits, the expense account, the annual office Christmas party and worst of all, the steady paycheck. Draw up your own list of personal pros and cons, and see whether you're still tempted to set up your own shop. How do I develop marketable communications skills? Consultants are specialists, not generalists. As a communications consultant, you're an expert in one or more phases of communication, and that expertise, plus your time, is what you sell to clients. John, a 27-year-old advertising manager, was bored supervising his company's advertising program. He wanted to start his own communications consulting firm, but few companies hire freelance advertising managers. How could he develop a salable specialty? John had spent six months establishing an in-house system for fulfilling, qualifying and tracking sales leads. He had even written an article about the experience for an advertising journal. Realizing that thousands of industrial-business marketers need help handling leads, John quit his job to start a consulting firm specializing in inquiry fulfillment systems. Using a one-page sales letter mailed with reprints of his article, John landed his first major contract within six weeks. If you're a manager or an administrator, focus on a single skill or area and become an expert in it. Some of today's most in-demand communications specialties include technical writing, business writing, data communications, software development, direct marketing, active listening, negotiating, speaking and presentation skills. Take a look at your company's communications needs. In what areas do you use high-paid consultants or freelancers? Those are the specialties you want to break into. How can I break from the corporation? Should you quit "cold turkey" or do you begin to build your new business while you still have a job? My advice is to get your business going before you resign. Buy the office equipment and supplies you need while you're still receiving a paycheck. Start putting out "feelers" - calls to business contacts and colleagues to see if they might be potential clients for your new business. Moonlight. At work, concentrate on those assignments which sharpen the skills and build the portfolio you will use as a freelancer. As long as you do not steal secret papers or shirk your job responsibilities, you are in no way wronging the corporation by planning your new life in your spare time. But to suddenly resign one day and then start planning, promoting, and running a business would be overwhelming (and a strain on your finances as well). What does it take to get started? Communications consulting busi­nesses have low start-up costs. Here's a list of the things you'll need to begin your business: A typewriter. I recommend the IBM Selectric or a comparable electric machine. As a communicator, a major portion of your finished product is words, and they must look sharp. A word processor increases productivity. A telephone. A desirable feature is "call waiting," which lets an ordinary home phone handle two incoming calls simultaneously. Stationery - envelopes , letterhead, business cards. Your stationery should look clean, crisp and professional. A fine paper stock always makes a positive impression. Don't buy "ready made" letterhead designs from the printer - have a professional graphic artist handle the job. Design and mechanicals of business stationery should cost between $150 and $500. Sales literature. Some type of brochure or flyer describing your services and qualifications is a necessity. According to the Thomas Publishing Company, 90 percent of industrial-business buyers say they must have printed sales literature in hand before they'll make a purchasing decision. Most consultants use 4-by-9-inch folded brochures that fit in number 10 envelopes. A few prefer 81/2-by-11 inch flyers because they can be inserted into 3-ring binders, and they won't be lost at the bottom of a file folder. A place to work. At home or a rented office? Working at home offers convenience, comfortable surroundings and increased productivity because there's no commuting. Rented office space connotes status and adds a feeling of legitimacy to a consulting enterprise. And for some people, it provides the necessary separation between work and home life. However, many successful consultants work at home, and rented office space is not a necessity. By all means, work at home if it pleases you. Wherever you work, you will need a desk, a bookcase and office supplies. A copier would be nice. Money. Enough to live on for at least six months. This gives you time to gain clients and build your business, and emancipates you from fear. If you're lucky enough to have three or four projects lined up, then three months' reserve funds should suffice. Where do I find prospects? A prospect is a potential client-someone who could, now or in the future, become a customer of your consulting business. The best source of prospects is people you already know: co-workers, colleagues, suppliers, acquaintances, business contacts, friends, even relatives. In his book How to Sell Anything to Anybody (Warner Books); Joe Girard estimates that the average person knows 250 people well. Organize your "contact list" using index cards, a rotary card file, label matrices, or some other convenient system. When you start searching for clients, get in touch with your contacts via phone or mail. My first two clients were a former employer and a graphic arts studio I had hired to produce some slide shows. Advertising and promotion can generate dozens of new leads. Direct mail is particularly effective for reaching selected audiences such as human resource managers, training directors, CEOs or ad agency creative directors. And the cost of direct mail is controllable since you can mail as few or as many pieces as you wish. Always include a business reply postcard or other response element with your mailing to increase its pull. Space advertising is usually not cost-effective for independent consultants. But I've run small classified ads in specialty publications, and they've paid for themselves many times over. Publicity - article writing, public speaking, seminars - won't generate as many immediate sales leads as advertising and direct mail, but it has the long-range benefit of enhancing your reputation. Reprints of your articles can be used in mailings or as leave-behinds after meetings and presentations. Referrals - "word of mouth" -are the best type of advertising. But this won't take place until you've been in business long enough to have serviced a half a dozen or so satisfied clients. How do I make a first sale? Starting a consulting business is a "Catch 22" proposition. People don't want to hire a consultant who doesn't have a list of big-name clients. But you can't have a list of clients until you've made a few sales. How do you win your first assignments? Give a free consultation. Since you don't have a track record, you have to prove yourself. A free demonstration of your skills and services lets prospects evaluate you firsthand. One ad agency I know of offers to provide prospective clients with a free evaluation of their current advertising program. To be an effective sales tool, the free consultation must give useful advice to the prospect, demonstrate why he or she should hire you, and take a minimum amount of time. Work "on spec." A variation of the free consultation is to do work on speculation (on spec). This means the client doesn't pay unless he is satisfied with your work. Many ad agencies prepare on-spec preliminary campaigns when they pursue new accounts. Charge less than the competition. As a novice consultant, you may have to do more work for less pay to make your first sale. After you make your first few sales, you can charge new clients more competitive rates. How do I set my fees? In a Peanuts cartoon strip, Charlie Brown asks Lucy why she charges a mere 5a for a session at her sidewalk psychiatry stand. Lucy's reply; "It's what the market will bear." Your fee will be determined by the going rates for your type of service as well as by the demand for you in particular. Self-confidence also plays a part; often you can command a higher fee just by asking for it. Of course, I assume you want to be fair to both yourself and your clients. In every communications specialty, there's a broad but definite range of what consultants charge. just as an attorney charges a higher hourly rate than a gardener or a handyman, a management consultant's fees are higher than those of a mechanical artist. While you still have your job, contact half a dozen consultants in your field and ask what they're charging. Their answers will guide you in establishing your own fee schedule. Most consultants charge either by the day (per diem), by the hour, by a monthly retainer, or by the project. Set fees based on the best estimate of how long a project will take to complete. When you get an assignment, get it in writing. A purchase order or letter of authorization clarifies the scope of the project and helps avoid misunderstandings later on. The purchase order should state the type of project, fee, deadline, and charges for revisions, if any. For first-time clients, especially smaller firms, consider collecting all or part of your fee in advance. Jaws drop when consultants mention their $60-an-hour or $1,000-a-day rates. But remember, those fees apply to billable time - time spent working on consulting projects. The consultant's income is zero dollars an hour during vacations, coffee breaks, lunch, and the hours spent marketing and running the business. "The economics of freelance writing are very simple," writes Advertising Age columnist James Brady. "No write, no pay." The same holds true for consulting. Where do I go from here? In corporate life, career paths are clearly mapped out. At the ad agency, for example, the junior copywriters become senior copywriters; the senior copywriters become creative directors; the creative directors become vice presidents; and the vice presidents become senior vice presidents. The consultant's career path is less well defined; if you're self-employed, you can't covet the boss's position. As a result, your goals become achievements rather than job titles. A consultant I know has the goal of winning new accounts in three different high-tech areas; telecommunications, microcomputers, and electronic publishing. Another wants to be the leading expert in his field, direct mail copywriting, and has hired a press agent to help accomplish this. A third wants his graphic arts studio to earn a quarter of its income from annual report work by 1984. Becoming an authority , taking on challenging assignments, making more money, working for prestigious clients-these are some of the things consultants strive for. Think about what you would like to do. Do you want to write a book on your communications specialty, earn $1,000 a day, or become a popular lecturer? Identify your career goals , and commit them to paper. With a well-defined plan guiding your communications consulting firm, a consulting career can provide a lifetime of fun, challenge, and financial reward - not to mention the satisfaction of being your own boss. *Poem reprinted with permission of the author, Ralph Windle © Ralph Windle.