50 and Beyond: How To Turn Your Connections into a Profitable Consulting Business
It seems that every time there is a reduction in the number of managers over age 50 at a large corporate employer, a rash of new "consultancies" spring up.
This makes sense, because many individuals can start successful consulting companies with just a Rolodex or Blackberry address file and a set of business cards. The time and cost to start are low.
More and more often today, we also see situations where the individual loses her job, but her old corporate responsibility, and the projects she was working on, don't go away.
These projects are often being completed by the same individual who was given the pink slip…acting now as an independent contractor.
Consultants make money from selling what they know and whom they know. But unlike the somewhat passive form of a book or guide, they add advice and recommended future action to their knowledge to increase their value in the marketplace so as to justify fees of $150 per hour and up.
In many cases, what consulting clients are really paying for is the consultant's connections in a specific industry; his past acknowledgement as an "industry expert"; and his effectiveness at staying up-to-date with the latest inside information and techniques in the industry.
Ten Keys To Building a Successful Consulting Business
- If you haven't left your employer yet, talk to your boss about the chances of returning part-time as a paid consultant. Find out what your company's policy is regarding the use of former employees as consultants, the general fee level they pay and what your boss sees as the probability of you landing work in your specialty in the next 3-6 months.
- Renew old acquaintances and refresh recent contacts at as many key players in your chosen industry as possible, for example: divisional managers at the larger companies; executive directors of trade associations; marketing companies for industry trade shows; peers at former (or soon to be former) competitors.
- Write out a 25 word mission statement of what you intend to help your customers achieve with your consulting help. Decide upon a business name and get a professionally designed logo to bring the name to life. Also have your business card, letterhead and envelope designed at the same time. You can often save money by ordering your identity material printing online, at sites such as www.vistaprint.com.
- Examine any special insurance, bonding, etc. you need in your chosen field of consulting, such as errors and omissions insurance. Find vendors for the type of policy you need and get a cost quote (you may be a bit shocked by what you find!).
- Go through your files and look for letters of commendation, awards, etc. you earned in your industry. Contact friendly outsiders who've expressed a willingness to offer a testimonial of your ability. Request said testimonials by e-mail.
- Create a website that is simple in construction and professional in appearance. You have three basic ways to do this: (a) Use software to design your own site (such as MS FrontPage); (b) Set up an account at one of the large web hosting sites (such as Yahoo) and use one of their pre-designed (template) websites, which you then customize to your needs; or (c) find a local web developer and work with him to build a custom website for your company.
- Set up a reliable telecommunications system to make you easy to reach. This may require just a cellular phone number equipped with voicemail. Or, you may have to wear a satellite-based pager. Staff at your local phone company can help you with your choice.
- Use MS Word or Excel to create a name and address list of at least 50 people you want to contact to announce the opening of your consulting business. If you wish, you can organize them into several groups, such as: "Prospects"; "People Who Know People", etc. Print out at least one set of mailing labels for the complete list. Prepare a no more than one page “approach letter” to send to each friend/prospect announcing what your new consulting business has to offer them.
- Decide whether you feel you need an extensive contract to enter into work, or whether just a one-page Letter of Agreement will work for you. If you need a formal contract, find a local small business attorney and allow three weeks and $1500 or more to get the contact form completed.
- One last piece of advice: As you grow your consulting business, don’t get cocky. And don't "rest on your laurels".