3 Years in...4 Things I've Learned About Solo Consulting

Next Friday marks the 3rd anniversary of Marketcap Consulting. I always giggle a bit when someone asks about my “firm”, because it’s just me and I plan to keep it that way.

Life as a solo consultant has truly been a dream come true- for me. It’s not for everyone- and I can’t say whether or not it’s for you- but I know many people are considering and asking about it, so I’ve dedicated this post to 4 of the most important factors you need to be aware of when considering a career (or stint) in solo consulting.

HUSTLE, PATIENCE, PERSISTENCE (I.E., BUSINESS DEVELOPMENT)

Starting a solo consulting business can be very unsettling at first. Believe it or not, when you go out on your own, your friends and former colleagues aren’t all sitting there waiting to give you money. You will reach out to people you think are slam dunks for new business or referrals, and you’ll get no response back. Many people will genuinely want to help you get work at their company, but don’t have the influence or budget to make it happen. Others will root for your failure, especially if they once tried going out themselves and failed. Some will think you're trying to take their job.

Folks, that’s the law of percentages. Don’t take it personally. You need to contact these people and companies to have a chance to work with them, at least in the early days (the next section discusses how to attract them to you), and very little of that outreach will turn into new business. But with enough hustle, patience, and persistence, that “little” becomes a first project, then a second, third, etc. and off you go.

I contacted over 1,000 people in my first 6 weeks out, achieving a measly 0.3% conversion rate (3 projects, and 1 of them came unsolicited from LinkedIn). Those 3 projects, however, represented over half my prior salary, and provided a massive confidence boost.

Do excellent work on your projects, and those first clients will give you more projects (my first 2 clients gave me 6 projects in the first 18 months) and refer you to others. Some % of people and companies who didn’t respond or have anything for you in your first 3 months out, will be ready to engage you in months 6, or 12, 18, etc. In my case, a lot of projects arise from client executives changing jobs and calling me because they need me to help with the same type of problem at the new company I helped them with at the last!

RELEVANT VISIBILITY

Personally, I’m not built to cold call or cold email week after week, or work the conference circuits. I’m incredibly impressed by those who are, but it’s not me. So yes I hustled and contacted everyone I knew to get things going, and kept the hustle up a bit longer to avoid a drop-off, but I eagerly desired a better way to attract new clients.

The two best ways I’ve found to drive inbound new business opportunities are:

• Existing clients and contacts give you new projects or refer new clients to you based on your prior performance, and
• Establish yourself as a highly visible expert in your domain

I titled this section relevant visibility, because the visibility needs to be relevant to what you claim to be an expert in. Posting something on LinkedIn that gets a lot of clicks doesn’t help your business if the clicks don’t result in people increasingly seeing you as the expert in your domain.

Nothing wrong with posting a cute cat video or the occasional rant to LinkedIn- but if you’re a procurement consultant, a sequence of weekly posts over 3 months on outsourcing best practices- read regularly by even just a few people at companies who have outsourcing needs- will benefit your business far more than a post that rants on about why working from home should be a human right, even if that post gets 50,000 views and 100 comments.

Why? No single post or impression will drive waves of business to your shores. Creating a body of work that demonstrates your expertise, however, puts you top of mind so that when (in my case, as a pricing expert) a CEO tells a CFO “hey we need some help to get our pricing house in order”, either that CEO says or the CFO thinks “we better call Joel”. They won’t think that thought because of any single post I wrote, or because I recently shared an insanely popular news item about non-competes…but because they keep seeing me write about how to price services more effectively, and that’s what they need help with right now.

Relevant visibility matters for both attracting new companies you’re not acquainted with, but also staying relevant to contacts and companies you worked with in the past. Otherwise, you’ll simply be forgotten…

INCOME VOLATILITY

I knew going in that income would be volatile, felt ready to embrace the change, and frankly that’s part of why I went out on my own. I had been on salary for ~17 years, yet wanted the opportunity to develop income based solely on my efforts and see how that went.

There’s no question income has been volatile. Here’s a 35-month chart showing just how volatile that income has been since I went on my own:

If you can’t handle the volatility, either solo consulting isn’t for you or you’re really more interested in being a full- or part-time dedicated contractor (which is really the same as being an employee).

The upside of course is that the volatility smooths out to much higher annual totals compared to salary, benefits, bonus, etc. if you’re successful.

Yet I’ve known people absolutely killing it right out the game, but ultimately went back to the workforce because the volatility was too difficult to deal with (for them and/or their partner).

TIME MANAGEMENT

Last, but definitely not least, is time management. Time management is both a skill to be mastered, and a habit to be developed, and success at solo consulting demands strong time management skills. All the cliches are true:

• you don’t have a boss walking by your office several times a day,
• marketing and business development are critically important self-initiated activities that nobody else will force you to do,
• just like income is volatile, so is project workload, and periods of downtime are easily squandered opportunities to grow your practice.

Over the years I’ve tested many time management methodologies and finally found one that works perfectly for me (separate post on that someday). Yet it still takes discipline to make the methodology a habit.

To grow a successful consulting practice you will need to manage multiple projects across multiple clients concurrently. You will need to consistently meet and beat project deadlines and objectives. Your personal life can’t disappear amidst this effort- in fact, solo consulting is a fabulous opportunity to give your persona life and loved ones more attention and focus than ever before.

To do so, however, you have to plan out where your time will be spent every day, and you have to stick to that plan. That plan should include buffers for unexpected events, family priorities, fitness goals, healthy nutrition, etc. and not just work tasks. Work tasks should drive towards results that move your projects towards completion.

It also means strictly avoiding meetings that don’t move projects (or your practice) forward. It means avoiding “entangling alliances” with other consultants and companies who don’t actually have genuine business opportunities in front of them.

By the way, hourly based billing makes the above far more difficult. I work on a fixed fee project and advisory basis, so I don’t get paid to attend meetings, making it easy for me to decline meetings that don’t my projects or practice forward. If I worked on an hourly basis, that’s harder to do, because I’m incentivized to click Yes for every meeting.

The above may sound like you’re spending every day telling people no, being stubborn about helping clients and family with questions, and not having much fun. Ironically, strict time management opens up huge chunks of newly available time to rapidly respond to client emails, take care of unexpected family needs, get involved in community and charitable initiatives, or, god forbid, finish your clients projects early.

Thanks for reading and I plan to write more posts in coming weeks around how to succeed as a solo consultant.

I specialize in pricing strategies for service and technology providers. Contact me to discuss solutions for your organization.