08 Aug Is Now the Time to Go on Your Own?
CHICAGO, IL – I heard from my friend Marie the other day: “That’s it! This makes the third time I’ve gone to a promising company only to have it be bought, and see my job go away. I’m done – I’m going out on my own.”
Harsh economic climate notwithstanding, people are still leaving the corporate world in droves, to strike out on their own (and women in greater numbers than men). Maybe you’ve been told by a dozen people what a great consultant you would make. Maybe you would! But is now a good or a bad time to hang out a shingle?
Opinions are definitely divided. The head of a Chicago business incubator said to me recently: “If you’re starting a consulting business now, you should have your head examined.” Then a friend who has an IT-on-call service business told me, “I can’t keep up with the demand. My business is booming.” How can you decide whether to take the plunge, or stay in your corporate job? Here are a few ideas.
Starting up a consulting business is never a piece of cake, even in the best of times. The sure-thing clients who swore they’d keep you busy with assignments may change jobs, lose budget dollars, or otherwise fall away. Advertising your services will cost more than you expect it to. But a number of factors – including your area of expertise, your industry experience, and the variety of ways that contractors and consultants are used in different functions – will help to predict how easy or difficult it may be to launch your practice.
First off, you have to understand the difference between the terms consultant and contractor, often used interchangeably. To some companies, there’s no distinction at all. If you do work for the company and you’re not on the payroll (whether you’re called a consultant or a contractor), you’re expected to perform your services and everyone is happy.
But in other companies, there’s all the difference in the world between a consultant and a contractor. In fact, I talked to an HR colleague in a large telecom company the other day, and she said that under the latest company budget guidelines, no consultants may be used at all, anywhere in the organization. What about contractors? No problem.
In fact, the company encourages managers to use contractors because they don’t have to pay them benefits. So how does this telecom company define consultants vs. contractors? Consultants, to them, are highly-paid advisors who come in and make recommendations on marketing practices, or IT services design, or HR, or whatever. They probably quote projects on a per-project basis. The traditional rap against consultants is this: A consultant is someone who asks you for your watch and then tells you what time it is.
In some companies right now, consultants are about as welcome as monkeypox. But in many of these companies, like the telecom provider in this example, contractors are very welcome. Contractors are folks who work on an hourly basis in place of laid-off or can’t-be-hired full-time staff. So know this: prospective clients’ perception of you along this consultant-contractor divide may well affect your ability to get into the companies you most want to work with.
Also, when you’re thinking about jumping out there into the consulting arena, remember that much – maybe most – of what you’ll be hired to do won’t be among the most fun/creative/strategic projects ever to hit your desk. It’s great to say that you’re a whiz at creating effective marketing strategies, and you may be just that, but how many marketing VPs are happy to tell their boss that they can’t create an effective strategy? It’s easier to get work doing the middle-level execution than the most strategic projects, and that may be the understatement of the decade.
Lastly, think about how easy or how difficult it will be to reach the people who are in a position to hire you. Do they have an active association in town, or more than one? A lot of organizations overtly or covertly shun service providers, so don’t rely too heavily on this avenue for reaching prospects. If your services are likely to be needed by only a small group of managers, can you reach them? If your service is appropriate for a large number of clients (like the IT-on-demand business mentioned earlier), how much can you spend to get the word out?
Now that I’ve laid out a bunch of things to look out for, here are some bits of encouragement for would-be independents. If you do something that not a lot of people do (like the very-much-in-demand software release engineer I used to work with) you might be a great success on your own. If your work experience, project requirements and living expenses are such that you can afford to bill in the middle ranges, you might find yourself with a full schedule of consulting work. Get-it-done contractors who can perform on time and on budget are becoming very popular in Chicago as more and more companies downsize their in-house marketing, HR, IT, and even product development groups.
So is 2003 the year when you go on your own?
Why not gather a group of your smartest friends together and do some business planning? Do a quick survey of the marketplace, the prospective clients and the competitive landscape. Figure out how much you’ll have to bill in order to meet your expenses and your income goals. What’s left for advertising, association memberships, and conferences? How much time can you devote to business development activities (as your business grows, this piece of your schedule pie doesn’t shrink, it grows!)? If your plan hangs together, the timing may be great for you. We would love to see you succeed in your independence goals – write us and let us know how you do! Send your workplace questions and observations to Liz at firstname.lastname@example.org.
Liz Ryan is the founder of ChicWIT (Chicago Women in Technology) and founder of WorldWIT (World Women in Technology). She can be e-mailed at email@example.com. Her column Nine2Five, which appears on ePrairie every Friday, is designed to keep you up to date with career trends and advice related to working and managing organizations in the post-bubble technology world. This article has been syndicated on the Wisconsin Technology Network courtesy of ePrairie, a user-driven business and technology news community distributed via the Web, the wireless Web and free daily e-mail newsletters.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of the The Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.