Consulting For Dummies E-Book

Bob Nelson

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 644

Veröffentlichungsjahr: 2011

Beschreibung

A clear, concise resource for entering this lucrative career field Consulting For Dummies, 2nd Edition includes a reorganization and narrower focus of the topic, with new or updated information that delves into the specifics of running your own consulting business. There is greater emphasis on the business of consulting, along with financial and legal issues involved in setting up a consulting business, deepening coverage of consulting proposals, and entirely new chapters on higher-level consulting issues that more-established consultants are demanding.

Leseprobe

Consulting For Dummies, 2nd Edition

by Bob Nelson and Peter Economy

Consulting For Dummies, 2nd Edition®

Published byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.com

Copyright © 2008 by Wiley Publishing, Inc., Indianapolis, Indiana

Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax [phone]. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax [phone], or online at http://www.wiley.com/go/permissions.

Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book.

LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If professional assistance is required, the services of a competent professional person should be sought. Neither the publisher nor the author shall be liable for damages arising herefrom. The fact that an organization or Website is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Website may provide or recommendations it may make. Further, readers should be aware that Internet Websites listed in this work may have changed or disappeared between when this work was written and when it is read.

For general information on our other products and services, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax [phone].

For technical support, please visit www.wiley.com/techsupport.

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books.

Library of Congress Control Number: 2008924957

ISBN: 978-0-470-17809-6

Manufactured in the United States of America

10 9 8 7 6 5 4 3

About the Authors

Bob Nelson (San Diego, CA) is founder and president of Nelson Motivation, Inc., a management training and consulting firm based in San Diego, California. As a practicing manager and a best-selling author, he is an internationally recognized expert in the areas of employee recognition, rewards, motivation, morale, retention, productivity, and management. He is author of the best-selling book 1001 Ways to Reward Employees (Workman) — which has sold over 1.5 million copies worldwide — and coauthor of the best-selling book Managing For Dummies, 2nd Edition, with Peter Economy (Wiley), as well as 18 other books on management and motivation.

Bob has been featured extensively in the media, including television appearances on CNN, CNBC, PBS, and MSNBC; radio appearances on NPR, USA Radio Network and the Business News Network; and print appearances in the New York Times, the Wall Street Journal, the Washington Post, and many more. He writes a weekly column for American City Business Journals and a monthly column for Corporate Meetings & Incentives, among others.

Dr. Nelson received his PhD in management from The Peter F. Drucker Graduate Management Center of Claremont Graduate University in suburban Los Angeles, and received his MBA in organizational behavior from The University of California at Berkeley. For more information on products and services offered by Nelson Motivation, Inc. — including speaking or consulting services — call 800-575-5521. Visit Bob at his Web site: www.nelson-motivation.com.

Peter Economy (La Jolla, CA) is a freelance business writer and publishing consultant who is associate editor of the Apex award-winning magazine Leader to Leader, and coauthor of the best-selling book ManagingFor Dummies, 2nd Edition, with Bob Nelson (Wiley), Giving Back with Bert Berkley (Wiley), The SAIC Solution with J. Robert Beyster (Wiley), as well as the author or coauthor of more than 30 other books on a wide variety of business and other topics. Visit Peter at his Web site: www.petereconomy.com and be sure to check out his Free Book Project at: www.booksforfree.org.

Dedication

To the many unsung consultants who quietly dedicate their working lives to helping others reach their goals.

Authors’ Acknowledgments

We would like to give our sincere thanks to the talented consultants whose personal experiences helped bring this book to life, including Bill Eastman, Peter Psichogios, and Ray Wilson. Thanks also to Bill VanCanagan for his expert legal advice on the manuscript.

Bob and Peter are especially appreciative of all the talented folks at John Wiley & Sons, especially Joyce Pepple, Stacy Kennedy, and Alissa Schwipps for their infinite wisdom, guidance, and support on this project.

On the personal side, Bob would like to acknowledge the ongoing love and support of his father Edward, his wife Jennifer, and his children Daniel and Michelle. Peter thanks his wife Jan, and his children Peter J, Skylar, and Jackson, for love everlasting. May the circle be unbroken.

Publisher’s Acknowledgments

We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/.

Some of the people who helped bring this book to market include the following:

Acquisitions, Editorial, and Media Development

Senior Project Editor: Alissa Schwipps

(Previous Edition: Pamela Mourouzis)

Acquisitions Editor: Stacy Kennedy

Copy Editor: Christy Pingleton

(Previous Edition: Tina Sims, Michael Simsic)

Editorial Program Coordinator: Erin Calligan Mooney

Technical Editor: Ray Wilson

Senior Editorial Manager: Jennifer Ehrlich

Editorial Assistants: David Lutton, Joe Niesen

Cartoons: Rich Tennant (www.the5thwave.com)

Composition Services

Project Coordinator: Katherine Key

Layout and Graphics: Reuben W. Davis, Alissa D. Ellet, Melissa K. Jester, Christine Williams

Proofreaders: Cara Buitron, John Greenough

Indexer: Potomac Indexing, LLC

Publishing and Editorial for Consumer Dummies

Diane Graves Steele, Vice President and Publisher, Consumer Dummies

Joyce Pepple, Acquisitions Director, Consumer Dummies

Kristin A. Cocks, Product Development Director, Consumer Dummies

Michael Spring, Vice President and Publisher, Travel

Kelly Regan, Editorial Director, Travel

Publishing for Technology Dummies

Andy Cummings, Vice President and Publisher, Dummies Technology/General User

Composition Services

Gerry Fahey, Vice President of Production Services

Debbie Stailey, Director of Composition Services

Contents

Title

Introduction

About This Book

Conventions Used in This Book

What You’re Not to Read

Foolish Assumptions

How This Book Is Organized

Icons Used in This Book

Where to Go from Here

Part I : So You Want to Be a Consultant

Chapter 1: Introducing the Wonderful World of Consulting

The Reasons for Consulting: Money, Yes . . . But What Else?

Taking the First Steps toward Becoming a Consultant

Beginning Your Own Consulting Firm

Taking Your Business to the Next Level

The Consulting Challenge Quiz

Chapter 2: Determining Whether Consulting Is Right for You

Pondering Your Preferences

Assessing Your Skills

Matching Your Skills with Your Preferences

Is Your Idea Marketable?

Do You Have What It Takes?

Chapter 3: Taking the Plunge into Consulting (Or at Least Getting Your Feet Wet)

Deciding When the Time Is Right

Preparing for Stops along the Way

Taking the First Steps

Part II : Getting Your Consulting Business Off the Ground

Chapter 4: Setting Up Your Consulting Firm

Getting Your Home Office Up and Running

Leveraging Support Services

Chapter 5: Getting a Grip on Legalities, Finances, and Ethics

Taking Care of Legal Considerations

Finessing the Financial Stuff

Doing the Right Thing: Ethics and You

Chapter 6: Setting Your Fees

Determining What You’re Worth to Your Clients

Setting Your Fees in Different Ways

Making Changes to Your Fees

Taking a Stand

Part III : The Short Course in Consulting

Chapter 7: Defining the Problem and Writing a Winning Proposal

Making the Most of Your Client Conversations

Building Partnerships with Your Clients

Crafting Winning Proposals

Chapter 8: Collecting the Client Data You Need

Identifying Key Data Sources

Getting Help from Your Clients in Collecting Data

Watch Out! Avoiding Data Disasters

Chapter 9: Problem-Solving and Developing Recommendations

Making Sense of All That Information

Problem-Solving the Right Way

Determining the Best Recommendations

Chapter 10: Tell It Like It Is: Presenting Your Recommendations

Giving Client Feedback: Setting the Stage

Conducting a Feedback Meeting

Making Great Presentations

Building Client Ownership of Your Recommendations

Chapter 11: Implementation: Making Your Prescriptions Stick

What Gets Planned Gets Done

Just Do It! Implementation Tips

Assessing the Results

Part IV : Selling Your Consulting Services

Chapter 12: The ABCs of Selling

The Classic Selling Process

Considering New-and-Improved Selling Methods

Chapter 13: Getting the Word Out: Promoting Your Business

Getting Up Close and Personal with Personal Selling

Using Fame to Build Your Fortune: Public Relations and Publicity

Paying to Put the Word Out: Advertising

Factoring In a Little Fun: Sales Promotion

Creating a Simple Marketing Plan that Really Works

Measuring Your Results

Chapter 14: Building Business and Referrals through Current Clients

Considering the Benefits of Referrals

Deciding Who to Approach for Referrals

Setting the Stage with Current Clients

How to Get Referrals

Following Up on the Referral

Chapter 15: Building Business with New Clients

Giving Your Introduction a Personal Touch

Building Relationships with Prospective Clients

Meeting Clients

Following Through Is Everything!

Moving On

Part V : Taking Care of Business

Chapter 16: Contracting for Business: It’s a Deal!

Getting the Lowdown on Contracts

Dealing with Different Kinds of Contracts

The ABCs of Contract Negotiation

Chapter 17: Keeping Track of Your Time and Money

Tracking Your Time

Billing Your Clients and Collecting Your Money

Building Better Budgets

Chapter 18: Communicating Your Way to Success

Putting It in Writing

Harnessing the Power of the Spoken Word

Chapter 19: Troubleshooting Common Consulting Issues

Alleviating Poor Cash Flow

Handling Clients Who Want Free Advice

Getting That First Sale

Dealing with Clients Who Are Slow (or Refuse) to Pay

Getting Clients to Pay You What You’re Worth

Part VI : Taking Your Consulting Business to the Next Level

Chapter 20: Building on Your Success

Tuning Up Your Growth Engine

Using Nine Keys to Unlock Success

Forming Partnerships to Build on Your Success

Giving Back

Chapter 21: Advanced Pricing Strategies

The Zen of Pricing

Taking a Closer Look at Value-Based Pricing

Considering Contingent Fees and Performance-Based Pricing

Chapter 22: Enhancing Your Image and Reputation

Creating a Professional Image

Enhancing Your Reputation

Building a First-Class Web Site

Part VII : The Part of Tens

Chapter 23: Ten Ways to Improve Your Cash Flow

Manage Your Accounts Receivable

Budget Your Cash

Push for Advance Payment

Hold On to Your Money as Long as You Can

Make Sure Your Invoices Are Right

Bill More Often

Give Prompt-Payment Discounts

Manage Your Expenses

Don’t Be Afraid to Push for Payment

Call in a Pro

Chapter 24: Ten Effective Marketing Strategies for New Business

Choose Your Targets

Discover What Works

Use Client Success Stories

Encourage Word-of-Mouth Referrals

Become a Media Animal

Hire a Good Public Relations Person

Start a Newsletter

Offer Free Samples

Be Responsive to Media

Help Clients Even If You Can’t Do the Work

Chapter 25: Ten Ways to Build Business with a Client

Always Be On Time and Within Budget

Anticipate Your Clients’ Needs (And Suggest Ways to Address Them)

Be Easy to Work With

Keep in Touch

Be Honest and Ethical

Give More than You Promise

Ask for Testimonials and Referrals

Offer Incentives or Send a Gift

Educate Your Clients

Do Great Work

: Further Reading

Introduction

Anyone can become a consultant. Becoming a successful consultant, however, is a different story. Prospering as a consultant requires you to have expertise that others are willing to pay you to provide, and it requires having good business skills. Oh. And it requires some amount of motivation on your part to want to consult for others.

Writing this book was a labor of love for us. We are both consultants and have been for many years. If we don’t do a good job, we don’t get paid. And if we don’t get paid, we don’t eat. Our goal is to provide you with the skills you need to become a successful consultant, whether you’re a beginner who is just getting his business off the ground, or an experienced consultant who wants to fine-tune her already successful practice.

As you may have already discovered or suspected, consulting can be an exciting and rewarding profession — and not just in a financial sense. Working with people to help solve problems can be an immensely satisfying thing to do. Of course, in the real world, consulting involves much more than tapping your client’s head with a magic wand and watching all the problems go away.

Consulting For Dummies, 2nd Edition, is specifically written to address the unique needs of both new and experienced consultants as well as consultants-to-be. If you’re new to the business, you can find everything you need to know to be successful and in demand. If you’re an experienced consultant, we challenge you to shift your perspective and take a fresh look at your philosophies and techniques — what’s working for you and what’s not. We offer some new approaches and techniques to help you take your business to a higher level.

About This Book

Consulting For Dummies, 2nd Edition, is full of useful information, tips, and checklists that any consultant or consultant-to-be can use right away. Whether you’re just thinking about becoming a consultant or you’re already a seasoned pro, you can find everything you need to make consulting fun and profitable for you and your clients.

The good news is that the information you find within the covers of this book is firmly grounded in the real world. This book is not an abstract collection of theoretical mumbo-jumbo that sounds good but doesn’t work when you put it to the test. We’ve culled the best information, the best strategies, and the best techniques for consulting from people who already do it for a living — including us. This book is a toolbox full of road-tested solutions to your every question and problem.

Consulting For Dummies, 2nd Edition, is fun, which reflects our strong belief and experience that consulting can be both profitable and fun. Nobody said that you can’t get your work done while making sure that you and your clients enjoy yourselves in the process. We even help you to maintain a sense of humor in the face of upcoming deadlines and seemingly insurmountable challenges that all consultants have to deal with from time to time. Some days, you will be challenged to your limit or beyond. However, on many more days, the satisfaction of resolving a production bottleneck, recommending a new accounting system, or installing a new client-server computer network will bring you a sense of fulfillment that you never could have imagined possible.

The material in this book is easy to access. What good is all the information in the world if you can’t get to it quickly and easily? Have no fear; we have designed this book with you, the reader, in mind. Here’s how to find the precise information you seek:

If you want to find out about a specific area, such as gathering data or setting up a home office, you can flip to that chapter and get your answers quickly — faster than you can say, “The check’s in the mail.” Let the table of contents and index be your guides.

If you want a crash course in consulting, read this book from cover to cover. Forget squandering lots of money on high-priced seminars and videos or spending countless nights poring over some fly-by-night correspondence course. Forget learning by trial and error. Everything you need to know about consulting is right here.

We know from personal experience that consulting can be an intimidating job. Consultants — especially those who are just learning the ropes — are often at a loss as to what they need to do and when they need to do it. Don’t worry. Help is at your fingertips.

Conventions Used in This Book

When writing this book, we included some general conventions that all For Dummies books use. We use the following:

Italics: We italicize any words you may not be familiar with and provide definitions.

Boldface type: We add bold to all keywords in bulleted lists and the actual steps in numbered lists.

Monofont: All Web sites and e-mail addresses appear in monofont.

Also, we should note that, in this book, we use the term consultant quite loosely. We define a consultant simply as someone who sells his or her unique expertise to someone else, often on an hourly basis. There are many different kinds of consultants, from those who advise businesses on how to become more effective to those who advise lawyers on which members of a jury they should try to remove before a trial to those who can help you set up your home computer’s wireless network.

What You’re Not to Read

While we spent hours and hours — and many late nights — writing the words you’ll read in this book, we know that you won’t want to read it all. Truth be told, it’s highly likely you won’t need to. So, we make it easy for you to identify “skippable” material by sticking it into sidebars. This is the stuff in the gray boxes that’s interesting and related to the topic at hand, but not absolutely essential for the success of your consulting business.

Foolish Assumptions

While we were writing this book, we made a few assumptions about you. For example, we assume that you have at least a passing interest in starting your own business that specializes in helping others solve their problems or capitalize on opportunities. Maybe you’re already a consultant, or perhaps consulting is something that you might like to try. We also assume that you have a skill or expertise for which your friends, relatives, or clients will be willing to pay. This expertise may be providing your advice on anything from postage stamp collections to Internet consulting to aerospace engineering services. One more thing: We assume that you don’t already know everything there is to know about consulting and that you’re eager to acquire some new perspectives on the topic.

How This Book Is Organized

Consulting For Dummies, 2nd Edition, is organized into seven parts. Each part addresses a major area of the how, what, or why of becoming a consultant — and growing your business. Because of this organization, finding the topic that you’re looking for is simple. Whatever the topic, you can bet that we cover it someplace! Here’s a quick overview of what you can find in each part.

Part I: So You Want to Be a Consultant

Consultants are many things to many people. In this part, we provide an overview of the entire book, and then consider how to determine whether or not consulting is for you, before diving into the topic of starting your own consulting business.

Part II: Getting Your Consulting Business Off the Ground

Consulting is just like any other business — there are certain things you need to do to get it off the ground and running smoothly. This part focuses on starting up a successful consulting business as well as the financial, legal, and ethical considerations that you will encounter along the way. Finally, we take a look at how to set your fees.

Part III: The Short Course in Consulting

Consulting can be done one of two ways: the right way or the wrong way. In this part, we discuss the right way. We explain how to clearly diagnose the client’s problem (and write a winning proposal), collect data effectively, and analyze it quickly and efficiently. Finally, we talk about how to give feedback to your clients and ensure that your advice gets implemented.

Part IV: Selling Your Consulting Services

To be a successful consultant, you have to learn how to sell your services (and yourself) effectively. This part considers the selling process and how to spread the word about your business. We consider how to build business through current clients, as well as how to build business with new ones.

Part V: Taking Care of Business

In this part, we dig a bit deeper into the business side of consulting, taking a close look at contracts and negotiating deals, keeping track of time and money, communicating with clients, and troubleshooting the kinds of issues and problems that every businessperson has to face from time to time.

Part VI: Taking Your Consulting Business to the Next Level

Once your consulting business is well established, you’ll want to take it to the next level to make it even more successful than it already is. In this part, we consider different approaches to build on your success, including the use of advanced pricing strategies and enhancing your image and reputation.

Part VII: The Part of Tens

Here, in a concise and lively set of short chapters, you find tips that can really launch your consulting practice into orbit. In these chapters, we address using the Internet and other publicity tools to market your services, avoiding consulting mistakes, writing proposals, negotiating contracts, and building business with existing clients.

Icons Used in This Book

To guide you along the way and point out the information you really need to know about consulting, this book uses icons along its left margins. You see the following icons in this book:

This icon points you to tips and tricks to make consulting easier.

Watch out! If you don’t heed the advice next to these icons, the entire situation may blow up in your face.

Remember these important points of information, and you’ll be a much better consultant.

These real-life anecdotes from yours truly and other consultants show you the right — and occasionally wrong — way to be a consultant.

Where to Go from Here

If you are a new or aspiring consultant, you may want to start at the beginning of this book and work your way through to the end. A wealth of information and practical advice awaits you. Simply turn the page and you’re on your way!

If you’re already a consultant and you’re short of time (and what consultant isn’t?), you may want to turn to a particular topic to address a specific need or question. If that’s the case, the Table of Contents gives a chapter-by-chapter description of all the topics in this book, and the thorough index can help you find exactly what you’re looking for.

Regardless of how you find your way around Consulting For Dummies, 2nd Edition, we’re sure that you’ll enjoy getting there. If you have specific questions or comments, please feel free to visit our Web sites at www.nelson-motivation.com (Bob) or www.petereconomy.com (Peter). We would love to hear your personal anecdotes and suggestions for improving future revisions of this book, and we promise to take every one of them to heart.

Here’s to your success!

Part I

So You Want to Be a Consultant

In this part . . .

Although the term consultant can mean different things to different people, if you’ve decided to become one, then you need to decide exactly what it means to you. In this part, we take a 50,000-foot overview of the topic, and then dig in a bit deeper by exploring whether or not consulting is right for you. We show you how to assess your own skills and preferences, and how to prepare to make the move to consulting. Finally, we consider exactly what you need to do to take the plunge into starting your own consulting business — as painlessly (and profitably) as possible.

Chapter 1

Introducing the Wonderful World of Consulting

In This Chapter

Understanding what a consultant is and why people become consultants

Exploring the contents of this book

Taking the consulting challenge quiz

Consulting has taken the world of business by storm, and it seems today that there is a consultant to do most anything you could ever want done. A consultant can be a partner in a large management consulting firm or a freelance writer. A consultant can be a self-employed Web site designer or a part-time cosmetics salesperson. A consultant can be an architect who works out of his or her home, an expert witness hired to testify at the latest Trial of the Century, or a virtual stock trader who provides investment advice to clients around the globe over the Internet.

In this book, we use the term consultant quite loosely. We define a consultant as someone who sells his or her unique expertise to someone else. This expertise can be anything from showing someone how to properly lay out, plant, and fertilize an organic vegetable garden, to analyzing and recommending changes to a complex aerospace manufacturing operation.

So, while many people think of consultants only in terms of the narrow field of professional management consulting — firms such as KPMG, Bain & Co., PricewaterhouseCoopers, and others that specialize in fixing “broken” organizations — the world of consulting is much bigger than that. Anytime someone pays you for your unique expertise or advice — whether it’s creating a snazzy Web page for a friend’s business, measuring the stress that a Category 4 hurricane might exert on a new home, or suggesting where to dig a new water well on a ranch in Wyoming — you are acting as a consultant.

In this chapter, we consider the many reasons why energized and talented people like you are becoming consultants, and then we briefly cover the topics of starting up your own consulting firm, understanding the consulting process, selling your services, and taking your business to the next level, all of which are covered in more detail later in the book. Finally, we invite you to take our nifty Consulting Challenge Quiz, which helps you determine whether you have what it takes to become a successful consultant.

The Reasons for Consulting: Money, Yes . . . But What Else?

Men and women from all walks of life with all manner of experience and expectations have reasons for becoming consultants. Some are leveraging their knowledge to help their clients, while others enjoy the variety of assignments that consulting can bring. Some prefer working for large, diversified consulting firms — with offices scattered all across the globe — while others are simply tired of working for someone else and ready to start their own consulting firms in a spare bedroom of their house. Still others are just looking for a way to make some extra money.

Whatever your reason for becoming a consultant, businesses of all sorts — and individuals and organizations — are using consultants more than ever. According to market research published in 2007 by consulting experts Kennedy Information, both consulting revenues and profits are up in the United States across the board, and are projected to continue to grow well into the future. One key reason for this is that skilled consultants can be brought into an organization on short notice, fix a problem, and then move on to another organization in need. No need to hire someone, pay them a salary, and provide them with benefits and a retirement plan.

And although some think that money is the main reason people choose to become consultants, that’s not really what it’s all about. Sure, a lot of people make good money as consultants — make no mistake about it. But to many people, the benefits of being a consultant go far beyond the size of their bank accounts. This section talks about some of the most compelling nonmonetary reasons people enter the consulting field.

Leveraging your talent

Everyone is especially knowledgeable about at least one thing. You may, for example, have worked for 20 years as a construction loan specialist for a large bank. When it comes to construction loans, saying that you are an expert is probably an understatement. And because of the huge network of contacts that you have developed over the years, many other organizations could benefit from your unique experience.

Or you may enjoy exploring the Internet in your spare time. You’ve built many Web pages for yourself and your friends, and you always keep up with the latest in authoring tools and other developments. Although you work at a grocery store as a cashier ten hours a day, five days a week, you always manage to find time to pursue your favorite hobby. Would it surprise you to find out that many businesses would hire you and pay you good money to build and maintain Web pages for them? It shouldn’t — that’s what consultants do.

Being tired of working for someone else

Most people have dreams of what they want to do with their lives. Some dream of buying their own home. Others dream of establishing a career or family. Still others dream of winning the lottery and moving to Bora Bora. However, in our experience, one of the most common dreams — the one that everyone who works in an organization dreams at least once or twice a day — is the dream of being your own boss.

It’s not that all bosses are bad. Both of us have had many great bosses over the years, and we hope that we have been good bosses to those who have worked for us. Most people, however, are born with a strong desire to be independent and to make their own decisions rather than to have others make their decisions for them. And when, as time goes on, you begin to know more about what you do than your supervisors or managers, working for someone else can become especially difficult.

Getting laid off or fearing you will be

The days of having a job for life are long gone. Today’s economy is one of rapid change and movement. As companies continue to search for ways to cut costs, they increasingly turn to hiring temporary workers or contracting work out to consultants. Having a job today is no guarantee of having one tomorrow. When you work for a company — no matter how large — you can be laid off at any time, for almost any reason, with little or no notice. If you’re lucky, you get a severance package of some sort — maybe a few weeks’ or a few months’ pay. If you’re not so lucky, your last day is just that, and you’re on your own.

Becoming a consultant is a good way to ensure your financial future in the face of economic uncertainty. Why? One, because you control the number of jobs you take on and how much or how little extra work you want to keep in reserve. Two, because you can often make more money consulting for a firm than you can as an employee of that same firm. Many companies are more than willing to pay a premium to hire an expert consultant to do the same job that an employee could do for much less money.

Having a flexible second source of income

If you want a flexible second source of income, then consulting is just what the doctor ordered. When you’re a self-employed consultant, you set your own schedule. If you want to work only on weekends, you can decide to work only on weekends. If you want to do your work late at night, that’s fine, too. And because you decide exactly how much work you take on, you can work for one client at a time or many clients at once. Decisions about your schedule and your workload are all up to you.

And another thing: If you conduct your business from your home, this second source of income can mean a sizable write-off on your income taxes. The government allows owners of home-based businesses to take a variety of tax deductions that are not available to most other individuals. Even if you don’t work out of your home, you can write off the majority of your business-related expenses. Check out Chapter 5 for some basic information about the tax benefits of becoming a self-employed consultant. More detailed information can be found in the most current edition of Taxes For Dummies, by Eric Tyson, Margaret A. Munro, and David J. Silverman (Wiley).

Finding a higher calling

Many organizations benefit greatly from the services of good consultants because they generally bring with them an independent and objective outside perspective. Unfortunately, many small businesses and noncommercial organizations cannot afford to pay for a consultant’s expertise like most larger, well-established businesses can. Schools, churches, charities, and other community-based organizations rely on members of the community to provide expertise and assistance. Many consultants make a regular practice of providing their expertise to community organizations at no charge as a way of giving back. (We discuss this concept more in Chapter 20.) If you are one of these people, you may already be consulting without even realizing it!

Why would anyone want to do that?

If you really believe in something — whether it’s the goals of a particular political candidate or your kid’s elementary school — then the psychological benefits are much greater than any financial benefits.

The work you do for your favorite charity or community group may get you noticed, resulting in paying work. Most community organizations are supported by a variety of people from all walks of life. The network that you establish with these individuals can be invaluable to you in your working life as well as your social life. Although establishing a network of contacts may not be the main reason that you decide to offer your services to the group of your choice, it’s not the worst thing that could happen to you, is it?

Preparing to take a step up

More than a few consultants have parlayed their consulting skills and experience into top executive jobs — often with the companies that had employed them as consultants. Before Robert Kidder became CEO of Duracell, Inc., and later chairman and CEO of Borden, Inc., he was a management consultant at McKinsey & Company. John Donahoe, named CEO of eBay in 2008, was a consultant at Bain & Company for more than 20 years (as was his predecessor, Meg Whitman, who consulted for Bain for eight years). And Hubert Joly, a former McKinsey & Company consultant, was recently tapped to serve as president and CEO of hospitality industry giant Carlson.

So, if your ultimate goal is to take a step up in your corporate career, then honing your skills — and building your business network — as a consultant might be just the ticket.

Taking the First Steps toward Becoming a Consultant

While many consultants work for someone else — in all sorts of companies, in all sorts of industries — for many others, a major attraction of becoming a consultant is starting their own consulting firm. The good news is that many millions of consultants have successfully made the transition to being their own bosses and are enjoying the financial, professional, and lifestyle benefits that result. The bad news is that starting up your own consulting firm — and keeping it on an even keel — is a lot of hard work.

Understanding the consulting process

If you hope to become an effective consultant, then you should be familiar with the most effective approaches to consulting. People have been consulting for hundreds — maybe thousands — of years. Over these many years, a five-step method to consulting has emerged that is the standard approach for many consultants today — whether self-employed or working for someone else. This five-step consulting process includes

1.Defining the problem

2.Collecting data

3.Problem solving

4.Presenting recommendations

5.Implementing recommendations

No matter what kind of consulting you do, you will find that your efforts will be focused on this approach, which will help you find the answers your clients seek.

Finding your forte

Before you can start your own successful consulting firm, you need to be certain of the kind of consulting you want to do. Some of you will find the answer obvious — “I want to help small engineering firms learn how to better use computer-aided design software to their benefit,” or “I want to show young couples how to plan now for their financial futures.” However, some of you won’t be quite so sure. In this case, you need to assess your skills and personal preferences to help you decide. And whether or not you already know what kind of consulting firm you’d like to start, you need to be sure there’s a market for what you want to do.

Taking the leap

Finally, once you’ve decided that you do indeed want to start your own consulting business and you know what kind of consulting you want to do, you need to decide when the time is right, and exactly how and when you’ll make the transition from your current employer to the new world of self-employment. This requires assessing your professional, financial, and personal considerations, and creating a step-by-step plan for making the transition, a topic we cover in detail in Chapter 3. While some self-employed consultants simply walk into their boss’s office one day and quit — starting their own business that very moment — others make the transition over a period of weeks, months, or even years.

Keys to making your business a success

According to the U.S. Small Business Administration (SBA), there are four key indicators of business success.

Sound management practices: An ability to manage projects, handle finances, and communicate effectively with customers

Industry experience: The number of years you have worked in the same kind of business you intend to start and familiarity with suppliers and potential customers

Technical support: Your ability to seek out and find help in the technical aspects of your business

Planning ability: An ability to set appropriate business goals and targets, and then create plans and strategies for achieving them

Beginning Your Own Consulting Firm

The first thing to keep in mind when starting up your own consulting firm is that you are starting your own business. If this business happens to be home-based, then there is good news for you: According to surveys conducted by IDC/LINK, an average of only about 5 percent of home-based businesses fail each year. So, after five years, only approximately one-quarter (25 percent) of home-based businesses fail — far less than the average failure rate of more than 50 percent for all businesses after five years.

The many issues that need to be addressed as you begin building your consulting business are the same as those faced by most other businesses, from setting up an office to securing support services and dealing with legalities, taxes, and insurance. You have to figure out how much your services are worth, and then find the means to track down and engage those who are willing to pay for them. Communicating and problem-solving naturally come into play along the way.

Getting started

You need to attend to a variety of matters when starting up your own consulting firm — from getting your business set up (including finding a space for it in your home or elsewhere, and getting office equipment and supplies) to securing the services of a good accountant, banker, and perhaps even a lawyer. We cover these topics in detail in Chapter 4. In addition, there are legal issues to consider, such as deciding what form of business to adopt, picking a name for your business, and dealing with zoning laws, licensing, and permits. And, of course, you need to set up a bookkeeping system and be prepared to pay your taxes, buy insurance, and perhaps secure health care and other benefits. These subjects are the focus of Chapter 5.

And there’s one more thing you need to address when starting up your own consulting firm: the fees you’ll charge your clients to consult for them. Many different approaches exist for setting your fees. Ultimately, you need to adopt fees that are appropriate for your industry, that create value for your clients, and that provide you with enough profit to make a good living. If your fees are too high, you may not get enough business to stay afloat. However, set your fees too low, and you may find yourself swamped with business, but not really making any money. Ideally, you’ll find a win-win approach where both you and your clients are happy with the results. Chapter 6 is dedicated to helping you zero in on this magic number.

Selling your services

Like any other kind of business, consultants have to sell themselves — their expertise, their experience, their ability to get the job done — and convince someone to pay the kind of fee that makes consulting worth their while. In a way, every consultant — at least, every successful consultant — is also a salesperson. And the better salesperson you become, the better able you will be to land the clients and projects you need to become profitable and to grow your business.

Selling your services involves many different parts of an equation that add up to a client signing a contract with your firm. These parts include such things as identifying the real decision-maker in your client’s company, making a sales pitch, promoting your business, building business and referrals through your current clients, and building business with new clients. We tackle all of these topics in Part IV. Remember: The success you find as a consultant is often directly proportional to the time and expertise you apply to the selling process.

Taking care of business

As we say many times in this book, consulting is a business, and you need to plan accordingly to attend to its unique needs. Every consultant relies on contracts to formalize agreements with clients: How long will an engagement take? What work will be accomplished? How much will your client pay you for your services — and when? Negotiating agreements with your clients is a vital skill for consultants. We cover the subject of contracting in detail in Chapter 16.

Also of great importance is the tracking of your time (the hours you put into a particular project) and your money (the fees that are attributable to a particular project). This involves setting up and maintaining client activity logs or time sheets, and creating budgets. Turn to Chapter 17 for more on these issues.

You’ll also need to be sure that you become an expert communicator — in writing, over the telephone, and via e-mail and other technology-enabled modes of communication. Chapter 18 discusses the ins and outs of communication. Finally, your business will run into problems and challenges from time to time — every business does. Whether the challenge is poor cash flow, getting clients to pay, or finding the right client for your kind of business, recognizing that there is a problem — and then correctly diagnosing and solving it — is a critical skill that you’ll need to master if you want to help ensure your long-term success as a consultant. We dedicate Chapter 19 to troubleshooting issues such as these.

Taking Your Business to the Next Level

Building and growing a consulting business that will be successful over a long period of time involves more than the basics of setting up your office, finding good clients, working through the consulting process, becoming an effective salesperson, negotiating contracts, and keeping track of your time and money. You also have to understand how to tune up your firm’s growth engine (the subject of Chapter 20), how to integrate advanced pricing strategies into the way you do business (see Chapter 21), and how to create a top-rank image and reputation in your particular industry (turn to Chapter 22).

Many consultants are happy building a certain level of business and then simply maintaining it. If that’s the situation you’re in and you’re happy with it, then that’s perfectly fine. However, if you dream of building a consulting business that will expand to hire others and serve customers in a variety of markets — outside of your city or state, or even internationally — then you’ll want to do what it takes to move your business to the next level.Who knows? Maybe you’ll be so successful that you will have to hire a consultant or two along the way to help you with your own business.

The Consulting Challenge Quiz

Maybe you’re thinking that this consulting thing may not be such a bad idea. Now the big question is: Do you have what it takes to become a consultant? Do you want to find out? Then simply take the Consulting Challenge Quiz. It’s quick, it’s easy, and it’s guaranteed to help you sort fantasy from reality. Don’t forget to total your score at the end of the test to see where you fit.

Quizzing yourself

Here are the questions. Read each one and circle the answer that comes closest to your personal feelings. If you’re not sure how to answer a question on your first attempt, move on to the next question and come back to the tricky one later.

1. Do you like to solve problems?

A. Yes, solving problems is my sole reason for being.

B. Yes, I like solving certain kinds of problems.

C. Can I trade one of my problems for one of yours?

D. Is there someone else who can solve them?

E. No. Yuck. Never.

2. Can you set your own goals and then follow them to completion?

A. I don’t know what I would do if I didn’t always have goals to pursue.

B. Yes, I set my own goals, but I don’t always follow up on them.

C. I haven’t tried before, but if you show me how, I will.

D. I don’t set my own goals; they set themselves.

E. Sorry, I don’t have any goals.

3. Are you an independent self-starter?

A. I don’t need anyone to tell me what to do — let’s get going!

B. I’m independent, but I sometimes have a hard time getting motivated to do things on my own.

C. No one has ever let me make my own decisions before. I kind of like the idea of doing things on my own, though.

D. Hum a few bars, and maybe I can sing it.

E. Do I have to be?

4. Are you confident about your ability to get the job done?

A. Without a doubt.

B. I’m fairly certain.

C. I’m not sure.

D. Can we discuss this some other time?

E. Absolutely, unequivocally not.

5. Do you enjoy pursuing tasks to completion, despite the obstacles in your path?

A. I am very persistent.

B. Usually, although I sometimes avoid tackling problems directly.

C. As long as we understand upfront that no one is perfect.

D. Is any task ever truly complete?

E. Some things were just never meant to be done.

6. Can you adapt to rapid changes?

A. My middle name is change.

B. It’s easier for me to adapt to good changes than to adapt to bad changes.

C. If you’ve seen one change, you’ve seen them all.

D. As long as it’s you who changes and not me.

E. I am a rock.

7. Are you creative?

A. Just give me a pencil and a piece of paper, and you’ll have your solution in five minutes.

B. Usually, but it depends on what mood I’m in.

C. Let me think about that for a while.

D. Why expend a lot of effort creating something that someone else has probably already figured out the answer to?

E. I like things the way they are.

8. Do you like to work with people?

A. Working with people is what makes work fun.

B. Definitely — some people more than others, however.

C. Yes — it definitely beats working with trained seals.

D. I really prefer my computer.

E. I want to be alone!

9. Are you trustworthy, loyal, honest, and brave?

A. All of the above and more!

B. Well, three out of four isn’t bad, is it?

C. How about two out of four?

D. I’d like to believe that there are other, more important human qualities.

E. Next question, please.

10. Are you interested in making a decent living?

A. My opportunities are unlimited.

B. Sure, as long as I don’t have to work too hard at it.

C. I don’t know; I’m pretty comfortable the way things are now.

D. Just how do you define decent?

E. I’m going to win that lottery one of these days!

Analyzing your answers

Get out a calculator right now and add up your results. Give yourself 5 points for every A answer, 3 points for every B, 0 points for every C, –3 points for every D, and –5 for every E. Don’t worry. We’ll wait right here until you’re done. Finished? Okay.

We have divided the possible scores into six separate categories. By comparing your total points to the points contained in each category, you can find out whether consulting is in your future.

25 to 50 points: You are a born consultant. If you’re not already working for yourself as a consultant, we strongly suggest that you consider quitting your job right now and start passing out your business card to all your friends, acquaintances, and prospective clients. Read this book for tips on how to sharpen your already well-developed skills.

1 to 24 points: You definitely have potential to be a great consultant. Consider starting your own consulting practice in the very near future, but make sure you keep your day job until you’ve got enough clients to keep you afloat. Read this book to understand the basics of consulting and find out how to grow your new business.

0 points: You could go either way. Why don’t you try taking this test again in another month or two? Read this book to ensure that you pass next time.

–1 to –24 points: We’re sorry to tell you, but consulting is not currently your cup of tea. We strongly recommend that you read this book and then take this test again. If you don’t do better after all that, then maybe working for someone else isn’t the worst thing that could happen to you.

–25 to –50 points: Forget it. Your DNA just doesn’t have the consulting gene built into it. Sell this book to one of your co-workers right now. Maybe he or she will score higher on this test than you did.

More than 50 or less than –50 points: Take your calculator to the nearest repair shop and get it fixed!

Chapter 2

Determining Whether Consulting Is Right for You

In This Chapter

Identifying your likes and dislikes

Reviewing your strengths and weaknesses

Determining the right consulting job for you

Researching the marketability of your idea

How do you decide whether starting a consulting business is the right thing for you? You may have arrived at this decisive point in your life because you feel you’re able to contribute more if you own and operate your own consulting firm. Or you may believe that starting a consulting business of your own can be a much more lucrative proposition than working for someone else (and, in many cases, it can be). Yet another possibility is that you simply like the idea of calling the shots in your life, and not having to answer to a boss.

Whatever your reason, becoming an independent consultant can be the key that unlocks the door to the rest of your future, if you just take a small step forward and give it a try. And you don’t have to do it all at once. You can (and, indeed, our advice is that you should) keep your current day job while you try out consulting in your spare time.

In this chapter, we help you determine what you really want to do with your life and what skills you have that can get you where you want to go. We also help you determine whether what you want to do is marketable enough to allow you to make a living at it. (Making a living at whatever you decide to do is always a plus!) Finally, we tell you how to do some simple test-marketing of your business ideas to see which ones are likely to fly and which ones may be better suited to papering your parakeet’s cage.

Note: If you’re already a consultant, then this chapter is probably not for you. You’ve already stepped onto the consulting path, and you’re likely looking for new ways to improve your practice — so skip ahead to the topics we cover later in this book that are important to you.

Pondering Your Preferences

Undoubtedly, you like to do certain kinds of work more than others. Take a moment right now to think about the things you most like to do on the job. Perhaps your great love in life is to create massive computer spreadsheets. Maybe you really like to read and analyze legal contracts. Or is your number-one favorite duty making travel reservations for your organization’s salespeople?

One problem with a career in most organizations is that you may very well be promoted right out of the things that you enjoy doing the most, into new duties that you find much less enjoyable. If you’re talented in a particular area of technical expertise — whether it’s creating advertising campaigns, writing complex software programs, or building houses — you’ll inevitably be recognized for your skill and eventually promoted into a supervisory or management position. When this happens, suddenly your job changes from one of, say, creating advertising campaigns to one of coaching a team of employees to create advertising campaigns. And although you may still do some creative work, suddenly your day is chock-full of management activities, such as budgeting department resources, controlling expenditures, counseling employees, building teamwork, attending endless meetings, and filling out forms for anything and everything you can imagine. Before you know it, you’re doing tasks that have nothing to do with what you really enjoy doing — creating advertising campaigns, writing software programs, or building houses.

In this section, your job is to decide exactly what you enjoy doing the most — at work and otherwise. Your goal is to identify new work opportunities that allow you to do the things you enjoy. Think in terms of a new career where you — not someone else — decide which things you do. Don’t worry now about whether you can make money at it. Making money is indeed an important consideration (that is, if you want to be able to afford to eat, or avoid living in a cardboard box on the street), and we look into that later in this chapter.

What do you really like to do?

Start this exercise by considering what you really like to do. Our belief is that if you like to do it — really like to do it — you can do it well. And doing the things that you like to do well generates success. For the moment, forget about the things you just sort of like to do or the things you feel wishy-washy about. Be honest with yourself — don’t put on your list things that someone else thinks you should like to do. Instead, look deep within yourself to tap into your own feelings. Use the space that follows each question to write in your ideas. Or photocopy the pages so that you can go through the exercise again in a few months or a few years.

What would your ideal day look like ten years from now? Divide it into 30-minute increments, and describe what you’d be doing during each part of your day.

What would your perfect job be? Visualize it. Smell it. Taste it. (Okay — don’t taste it.) What would you do every day? How would you spend your time? With whom would you work?

List your most positive and enjoyable work experiences. What about these experiences made them so enjoyable? Exactly what skills were you applying?

What are your five favorite things to do at work? Why do you like each of these five things?

1. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

2. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

3. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

4. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

5. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

What are your five favorite things to do away from work? Why do you like each of these five things?

1. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

2. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

3. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

4. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

5. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

What strengths would you bring to your dream job? What gaps in knowledge or experience would you need to fill to start working in your dream job?

A visualization exercise

As you work on getting in touch with the things that you like and the things that you dislike, you can amplify the effectiveness of the process by participating in a visualization exercise. First, find a nice, cozy chair where you can relax — away from the phones or the hustle-bustle of your home or office. Turn down the lights and let your mind wander. No, don’t go to sleep — you need to be awake for this one. Visualize your ideal life. What’s a typical day like in your ideal life? Start at the very beginning of your day when you wake up and work through it until you go to bed at night. Ask yourself the following questions:

Where are you living?

How do you wake up?

Who do you wake up with? (That is, do you have a spouse? Children? A dog?)

What time do you wake up?

What clothes do you put on?

What do you eat for breakfast?

Who do you eat breakfast with?

Where do you go to work?

How do you get there?

Who do you see at work?

What does your work environment look like?

What does it smell like?

What do you do at work?

Who do you talk to?

What do you talk about?

Continue to work through your typical day in your ideal life — the rest of the morning, lunch, afternoon, the commute home in the evening, dinner, after dinner, and bedtime. Ask detailed questions about what you’re doing, where you’re doing it, when, and with whom. Use the results of this exercise to help guide you in your answers to what you really want to do with your life.

What do you really dislike doing?

Just as you have things that you really like to do — both on and off the job — you invariably have things that you really can’t stand to do. The next step in this exercise is to zero in on the things that you really don’t like to do. Again, be honest with yourself — now’s the time to get it all out on the table. (Don’t worry; we’re not going to show this to your boss.)

What would your worst job be? What would you be doing every day? With whom would you be working? How would you be spending your time?

List your most negative and least enjoyable work experiences. What about these experiences made them so unbearable? Exactly what skills were you applying?

What are your five least favorite things to do at work? Why are these your least favorite things?

1. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

2. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

3. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

4. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

5. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

What are your five least favorite things to do away from work? Why are these your least favorite things?

1. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

2. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

3. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

4. ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––