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How To Make a Good Income From Consultancy
Why start a consultancy?
A consultancy business is really a catch all title for working for yourself. It involves taking any skills that you have and turning them into a business. Consider this - you work for a living and somebody pays you. They think that you are worth paying for and are using you to make them profit. Why not then cut out the middle man and make yourself some extra profit?
It is not always as easy as this - your job provides you with the work and takes the risk of paying you. You will be taking on these duties hopefully to make some more money but also there is a big attraction for many to either work for themselves, work form a home base - or simply to get rid of their boss!
Not everybody has the right temperament and personality suited to working alone for themselves. Before embarking in such a course you must always ask yourself some searching questions about your suitability for being your own boss.
Case study: forensic accountant
If you have accountancy skills, you might consider the possibility of setting up a forensic accountancy consulting business. Most accountants in general practice will have undertaken some form of financial investigation from time to time - after all an audit is only a particular framework for one style of accounting investigation.
As an experienced accountant you will have the skills to carry out reviews of accounting records in all manner of disputes - from fraud investigations to matrimonial disputes to loss of profits when two companies are arguing over contracts. You may even have already been involved in providing valuations for clients who want to sell their businesses.
A forensic accounting consultancy is one area where you can apply the experience and abilities from a typical employment within a niche area as a specialist - working from home as a sole practitioner.
Other examples of employments that will provide a sound base for setting up a consultancy business are lawyers, web site designers, computer programmers, architects, health and safety workers, teachers of all subjects...the list is endless.
Key considerations for a consultancy business
- You will be faced with working on your own. If you are used to being part of a large team then working as a self contained consultant may not be for you. On the other hand many people yearn to be their own boss and be in charge of their day to day working lives.
- Nobody will give you work. Do not think that you can simply place an advert in the local paper or Yellow Pages and expect the work to come rolling in. You will have to go out and win the work, often in a competitive market place. This means that you must draw upon your whole network of business contacts and also be prepared to make many more. This can involve cold calling which many people feel uncomfortable doing. However, a tenacious and well researched approach will bring rewards.
- You will need to keep your business records in good shape and ensure that you record every expense as well as your income. You will need to note all inquiries and follow them up repeatedly. You will need to manage your cash flow - remember many new businesses fail in their first years and almost always this is down to badly managed cash flow.
- Pay your taxes on time - trying to avoid taxes will always end in tears, no matter how much it hurts writing those large cheques!
- Don't get bogged down - plan breaks to your business away from your desk or office. Take coffee breaks in town, schedule exercise sessions at the gym or times when you can take your dog for a walk. These breaks will energize you and recharge your batteries.
- There are times when you will be busy and have to work all hours. Other times there will be no work. Learn to enjoy the down times, rather than worrying about lack of money coming in. In this way, when the work is there you will be ready to give it you all.
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Some resources to get you started
Is consultancy right for you?
The good thing about consultancy is that there are many good books on the subject and it is always worth doing your research before taking the leap. One of the big pointers that you will get from this type of research is continually being asked the question "...is working as a consultant right for you...?"
A consultant running his or her own business needs to be a confident person, able to approach strangers and convince them that you are capable of adding value to them. A timid approach will not work, no matter how clever you are or how much skill you have in a certain area. You must make people relax with your presence, feel secure that you will be a safe pair of hands and importantly, that they will like working with you.
If you do feel that consultancy is for you, you will be embarking on what can often be the most rewarding of careers. It can be financially rewarding and very fulfilling. You will appreciate being your own boss so long as you can maintain a serious and diligent approach to developing you client and contact list and maximising every opportunity that presents itself to you.