I’m thinking of becoming a self-employed consultant, but where do I start?

 

If you can enter the brave new world of self employment with a couple of firm contracts, perhaps taken from your existing employer, you will have a much easier start. At the very least you need a host of good leads that you plan to target. When setting up, consider what you will be offering and to whom you will be offering it.


This is a competitive market and you need to have an offering that has wide appeal and is different from the rest of the competition. It also helps to have a particular market sector in which you are well positioned, based on experience and an ability to serve the market well. Pricing when you start is vital.


Try to research the going rate for consultants in your field and remember that when you bid you will be up against established consultants. Your fees will need to be competitive, and don’t forget that income will have to cover you for the non-fee-earning days that are inevitable. The other aspect of starting up is that you are now entering the world where cash flow is king.


Many customers will want to pay out only on successful completion of a project, which could be up to six months long, but they may pay stage payments depending on you producing deliverables. At best, customers pay 30 days from the invoice, some take 60 days and others try everything they can not to pay at all!



In the meantime, all your outgoings continue to exist and you need to allow for this. This is a tough time to be starting a new business and it is particularly difficult to obtain credit to cover start up costs. You will need a strong business plan to put before the bank manager for any funding to cover this lack of income. Self employment is hard work – don’t forget you will have to either do or contract in all the services you were used to your employer providing, such as accounting (including chasing late payments), sales and marketing, project planning and development.


You will have to do all this as well as work that you have already been doing and get used to working with people that you don’t know well. Your interpersonal skills will have to be top notch, as will your time and project management skills. You need to be perfectly clear with customers what you will do for them and what they have to do themselves in order to avoid any disputes. Having given you an idea of the pitfalls that may arise, self employment can be extremely rewarding. You can expect to work hard but it should be interesting and enjoyable working on your terms and being able to create your own work-life balance.

 

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