Becoming an Independent Consultant Rev 1

8/8/2019 Becoming an Independent Consultant Rev 1

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www.scorehelp.orgSeacoast Chapter 185

Be

coming an Independent Consultant


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Contents

Making the decision

Positioning your practice

Marketing plan

Where to locate

Setting up the office

Now youre lonely

Contractual Relationships with associates

Managing your finances

Setting fees Legal, insurance and contractual


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Making the Decision

Consider these changes:

Phone contact vs. direct relationships

Need for self-discipline & time management

Acquire more knowledge of admin & financials

Have patience (and resources) in closing new clients

Have a sharply focused marketing strategy

Learn to operate office equipment/computers

Maintain the highest ethical behavior


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Positioning Your Practice

Identify your unique experience & skills

Your competitive advantages

What has unusual value to potential clients

Can this be communicated effectively

Test out ideas with friendly clients

Consider your marketing strategy:

Types/sizes of clients/industry/geography

Commodity service on an outsourced basis

Convenience, flexibility, cost control Ideally, narrowly focus in a specialty that is in demand, but

has few practitioners


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Marketing Plan

Systematic Marketing is critical

Successful techniques include:

Regular personal letters with clipping or book review

Referrals/testimonial letters from satisfied clients

Make speeches, do seminars or workshops

Write articles as mailing pieces

Publish a newsletter (burdensome on one person)

Develop a web-site

Marketing brochures (can do them w/MS Publisher)


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Where to Locate

Many work effectively out of their homes

Need a pleasant, dedicated room

If an outside office:

Look into office condo or shared space Avoid renting a conventional office too costly


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Setting up the Office

Communications is the consultants life blood

Have 2-3 dedicated phone lines (one for faxes)

Office equipment includes:

Desk, chair bookcases/shelves, many file cabinets Good computer, large monitor, UPS, ZIP drives, media safe

fire proof storage box, scanner, laser printer, CD burner,

good fax

Office software:

Microsoft Office, Quicken (or QuickBooks)


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Now Youre Lonely

Schedule informal lunches during the week

Join a health club and use it!

Plan an errand each day away from the office

Join a service club (Rotary, Lions, etc.) Develop network of consulting colleagues

Local chapter of The Institute of Management Consultants

Have to work hard at this (overcome jealousy)


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Contractual Relationships with Associates

Mostly simple letters of understanding defining mutual

obligations

Compensation vehicles:

Agree on a per diem or per hour rate agree via a detailed

task plan how many hours/days each will get

Agree on a split of the total fees based on roles with the

client (ex x percent for selling the job, y percent for

managing the client, proportioning balance based on est.

hours each is to work on the project

Confidentiality agreement if one party has proprietarytechnology


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Managing Your Finances

Maintain meticulous financial records

Obtain a separate tax ID

Keep separate business checking account

Have separate business credit card Estimate and pay self-employment taxes

Consider self-employed retirement funding:

SEPs, Keoghs

Defined Benefit Pension Plan for good years

Be careful of the relationship with alliance associates (theycould become employees)


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Setting Fees

Do NOT start out with low fees to speed up client acquisition

Low priced consultants not taken seriously

Potential or actual contributions not valued

Fees depend on: Nature of the practice

What competition charges

Size and nature of prospective client organizations

In general, base per diem rate is no less than 10-15% less

than fees charged by large established competitiveconsulting firms for similar work

If possible, estimate the total effort and quote a fixed price

Be careful of quoting to fit clients budget this is discounting


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Legal, Insurance and Contractual

Need reasonable level of commercial insurance

Includes professional and personal liability

Includes protection of office equipment and records from

loss

May need errors and omissions insurance Carefully consider disability insurance

This may be more important than life insurance

With client proposals:

Clearly list deliverables

Basis of fees and invoicing a must

Protect proprietary technology; copyright all written

consulting tools, training materials and forms

Documents

Becoming an Independent Consultant Rev 1