What I Wish I’d Known
Are you thinking about hanging up your corporate hat and going out on your own? I'm often asked for advice from people who want to start their own private practice as a team consultant, facilitator or coach. So, I'm sharing with you my thoughts about what you’ll need in order to be successful as an independent consultant.
I left the corporate world in 2000 after having my first son. Around 2004, I began a slow re-entry into the world of coaching, training, and team building. It took me several years to begin to generate a decent income, and about even longer to work my way back into full-time “gig” work. As my kids got older, I begin working more, so the slow transition to full-time worked well for me.
I love having my own business. I enjoy working with a variety of clients all over the world from Fortune 500 companies, to government agencies, to small businesses. It’s fascinating to learn from leaders in various industries – I learn so much from my clients! But, it didn’t happen overnight for me. It took me years to build up a brand and referral base.
In looking back, there were several things that propelled me forward, sometimes very slowly and other times with rapid speed.
Things To Consider
Here are my thoughts for those of you who are thinking about leaving full-time employment for the gig economy. I hope this is also useful for those of you who are early in the process of building your practice.
Consider Your Financial Resources and Needs
I only know of a few people who left full-time employment and immediately had a strong book of work. Most people I know have had to cultivate relationships and market themselves, sometimes for years, to earn steady work. So, consider your financial situation. How much savings do you have? Do you have other revenue sources? How much income do you need to bring in per month/quarter/year?
Perhaps you are fortunate, and you don't need a steady income as you build up your practice. But, if you need at least some stability, consider building up your practice while still working your full time job or working part-time until you are ready to go all in.
Determine Your Rates
Rates are a touchy and personal subject, yet we all need to know what a typical rate would be. I know people who charge $500/day and others who charge $7000/day. There are many factors to consider. What type of work is it? How much time does it take you to design and develop the work? Who is the work for? According to IAF-World, the rates in 2017 in North America are between $125-$350 US an hour or about $1250-$5000 US per day of delivery. I encourage you to ask people in your field who offer similar work and then decide the rate you want to ask.
Be sure to think about the following things when you establish your rate. Will you bill by the hour or the day? Will you bill separate for prep time or is that included in your day rate? Will you offer a discount to non-profits? Will you have different rates for different types of services? Will you bill for travel time if the client allows for it? Are supply expenses included in your rate or billed separately?
Also, if you are doing referral work for someone else, they will expect to get a percentage of your rate. Some people ask for 10%, some 20%, some 40-50%. So, keep this in mind.
One last thing on rates is to consider, as a business owner, that you’ll have lots of other expenses to cover such as insurance, marketing, and administrative costs, etc. Sometimes the rate seems high ($4K a day!), but once we factor in all our costs of doing business, plus the higher taxes we will pay, it’s not as much as you think.
Adjusting To Variations In Income Over Time
A common phrase I hear in the gig economy is “feast or famine.” Sometimes there is so much work to do that 80 hours a week is not enough time, and other times, your calendar will be empty. I find this especially true of those new to gig work. If you are used to a steady paycheck, you will need to readjust your thinking and your financial planning. Expect variations in your income and plan ahead so a famine won’t be devastating.
I have a colleague who has saved up over time so that he lives off the income he made from the previous year. For example, during 2019 he is living off the income he made in 2018. During 2019, all his income goes into savings that will be spent in 2020. This way, he can budget for the year. I am not there yet! I have built up to save back at least 2-3 months of income at a time, which helps if I have a lean month or unusually high expenses one month. For years, I lived month to month and this was stressful during lean times. Fortunately, my husband had a steady paycheck and as I started working again, everything I made was adding to our income. If you are leaving full-time employment, you will need to think about how to adjust until you get an idea of your new income stream.
Wearing Lots of Hats
Unless you hire a team to help you from the beginning, you’ll be your own CEO, CFO and COO – plus you’ll be doing the dirty work too. In addition to the consulting work, you’ll need to market and promote yourself, handle your invoices, and develop a strategy. We all have areas that are both easy and difficult for us, and we may even dread some activities. You’ll either need to organize yourself to do all of this or partner with someone to help you.
Consider your strengths and also how time-consuming these different roles are. Which ones should you spend the most time in? When you are financially able (but not before), begin hiring people on an hourly basis to do time-consuming work that you don’t enjoy or that others can do just as well (or better) than you.
Freedom To Choose
You are going to have freedom to choose what you do every day. This is wonderful… but it can also be dangerous. You’ll have to be disciplined and organized to ensure you are using your time wisely. It’s easy to get focused on designing a logo or website, and later realize you lost 100+ hours of time making it look just right. Remember, that is non-billable time.
Discipline yourself to spend your time in ways that will generate income. Plan your days and weeks. For me, this includes planning some margin for unexpected things or time to think and create. I do my best work when I have mixture of margin and structure. Find a system that works for you.
You are going to be more isolated if you are working by yourself. This may be fabulous news for you if you are an introvert; however, if you are energized by people, you might find yourself lonely. Either way, you might also find you are less exposed to new ideas and different perspectives. It’s going to be important to find ways to connect with people besides your clients. Look for ways to network, and continue to develop yourself.
Consider forming a Mastermind group with other facilitators, coaches, or consultants. Participate in networking events and conferences; start a book club, meet colleagues for coffee or lunch, or just SKYPE with them to stay in touch.
If you need a lot of interaction, schedule several meaningful interactions a week. Be thoughtful about who you connect with and choosing people you will learn from. Be sure to give back in each interaction, offering support, ideas, and resources.
Defining Your Niche
It’s going to be tempting to say “yes” to everything and cast a wide net when you are starting out. I did this for years – and still do more than I should. The most successful consultants I know specialize and niche themselves. While it feels like you are limiting yourself, this specificity helps people remember what you do and think of you later when they need your service or talk to someone who does.
For me, about a year after I branded myself with Better Teams™ I noticed a significant uptick in the referral work I received related to team building. People now know me as someone who works with teams and has a variety of resources, tools, and assessments to use based on the team's need. If you are interested in building your own practice working with teams, check out my online course Team Consultant Academy which is designed with you in mind.
Think about what you want to do and who you want to serve. Define your brand clearly and narrowly. A great resource for this process is Dan Miller’s book StoryBrand.
Deciding to go out on your own is a big step. For me, the journey to developing a successful business has been challenging and rewarding. I can’t imagine going back to full-time employment. Yet, it is not an easy process for most coaches and consultants I know. Consider the pros/cons and develop a plan that works for you. Go into the process with your eyes wide open and support systems in place. Be prepared to make a lot of mistakes, learn a lot, have moments of exhilaration, and moments of exhaustion.
About the Author: Leigh Ann Rodgers, Founder of Better Teams and Forward, is an IAF Certified Professional Facilitator with 20 years of experience in the human development field. Leigh Ann is a skilled meeting facilitator, trainer, and coach working across the globe to help leaders cultivate teams that are happy and high-performing.
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