Is Consulting More Stable Than Employment?

It occurred to me several weeks ago that consulting could be more stable than employment. So I asked someone who’s had much more first-hand exposure to the subject than me. I asked consultant Pam Slim, author of Escape From Cubicle Nation and the Get a Life eZine, what makes a consultancy stable.

When I say she’s had first-hand exposure, I mean in a big way. Before she started coaching people who have made the transition from employee to entrepreneur, Pam did it herself. As she writes in her bio:

My journey as an entrepreneur began in 1996, when I quit my job as manager of training and development at Barclay’s Global Investors, a $300B investment management firm in San Francisco. I enjoyed my work very much, but was looking for something new, exciting and challenging for the next phase of my career. After about 4 months in the market with no interesting job leads, I called up my friend and former manager to see if she had any project work. As fate would have it, she needed an outside contractor to work on developing the global management development curriculum for Hewlett Packard.

As soon as I started working for myself, I knew that something was RIGHT! Having my own business was totally liberating and intoxicating. I named my company Ganas (a Spanish word that means the intense desire to do something, inner motivation, exuberance, drive) since that was what I felt…

Through my years with Ganas, I have worked with numerous companies in a wide variety of transitions including explosive growth, reorganizations and downsizing and mergers and acquisitions. Work has taken me throughout the US, to Europe and Mexico… I have coached and taught thousands of different people over the years: salespeople, managers, small business owners, CEOs, engineers, scientists, activists, former gang members, administrators and creative types.

How long after you started your consulting business before you felt it was stable?

I don’t know if my personal example is a characteristic case study since it was largely a product of the times. I felt stable almost immediately. I started my business in 1996 in Silicon Valley, at the beginning of the tremendous ramp-up that became the .com boom and bust. My first clients were all technology companies, and they were screaming for help from consultants like myself who could assist technical managers and executives to understand the “people side” of running a business. Growth was rampant and people were bailing from larger companies into smaller companies, often bringing me along with them. So I never had a problem generating new business.

On the emotional stability side however, I was only 30 when I started so I did feel a bit like an impostor at first. Most people feel like that at first no matter what their pedigree, so don’t worry if you do. The more successful projects I completed the more confident I felt, so by the time the economy began to tank, I had a good reputation and moved into more stable sectors such as insurance, utilities and financial services.

What else did you do to get it to that point?

I’d have to say that the biggest things that contributed to my success as a consultant were great client relationships and a total commitment to doing the right thing well. I put a lot of time and energy up front to understand the needs of my clients and their personal as well as institutional challenges. The most interesting part of my job was dealing with real, live, juicy human problems, so I always looked at my clients as real, live, juicy human beings. I kept in touch with them when my projects were done, and this often led to more work or referrals to friends and colleagues. Many of them also became friends.

The second element was sometimes a challenge. As your readers know, “doing the right thing” in corporations is not often supported, especially by senior management. But I felt really passionate about spending their money and my time on things that were most likely to make a real difference. I turned away many clients who insisted that I do things that I felt would be counter-productive to their business goals (such as putting an entire team of managers through a management training session when it was just one manager’s behavior that had to change). I won’t say I have a perfect record since sometimes despite my best intentions and efforts the root problem wasn’t solved, but that is just life!

In general, how does one make a consulting business stable enough to make a living from?

A consulting business is like any other business, in that you have to make sure that you have carefully thought about who your market is, what kinds of problems they face and how your services directly solve their problems. A cornerstone of stability is offering superior services, since in my experience referrals are the primary source of new business. For example, I didn’t do any sales or marketing for the first 8 years of my business, all was word-of-mouth.

A close second is a strong network and a good marketing plan that allows you to mitigate risk associated with any one sector of the economy. Beware of the common mistake of many first-time consultants: over-reliance on one “Stable Mabel” client. I always had at least three at a time, just to ensure that if the rug was pulled under one project that there was something else to pay the bills.

Besides charging an hourly rate, what are some other ways a consultant can monetize her expertise?

In recent years, I have become very enlightened by the “multiple streams” approach to a service business. The fact is, there are only so many hours in a month, and if you want to grow quality of life along with your business, you can’t rely on straight hourly consulting time. If you have specialized knowledge that would be useful to a large audience, you can package it in the form of e-books, audio series, live (paid) presentations, workshops and tele-classes. The key is to have something of real value to offer so that you don’t feel like a sleazy late-night infomercial host pitching your wares. For more ideas on what you could create, check out Robert Middleton’s site at www.actionplan.com or the book Multiple Streams of Coaching Income (Don’t be scared off by the word “coach” – most of the ideas could apply to consulting as well.)

What resources do you offer at your website for software engineers who may be considering starting their own consulting business?

At the moment, I am not offering a lot of paid products or services since I am focusing my energy on writing a book called Escape from Cubicle Nation and building up a solid chunk of content on my blog. I do take on a limited number of coaching clients for those who want some help sorting through the transition period between deciding to leave your corporate job and figuring out what business to start. Feel free to ask me about it at pcs(at)ganas(dot)com. My biggest joy is hearing from aspiring entrepreneurs, so please stop by the blog and comment! I also write a monthly eZine called Get a Life, with information, resources and encouragement for those that are sick of the rat race.

Thanks!

I really want to thank you, Pam, for taking time out of your busy schedule. I know you have a hundred projects going, plus a life of your own.

Thanks so much for the opportunity to talk to your readers, Tim!

Everyone, please take a minute and check out one of my must-read blogs, Escape From Cubicle Nation. I also subscribe to her eZine and look forward to it every month.

-TimK