In a prior post I introduced the topic of Launching a Consulting Business. Prior to getting into the steps of framing-up and launching such a business I promised to provide a “litmus test” to help you determine if this “may” be the right path for you.
As you consider whether launching a consulting business is right for you, please ponder the following questions:
- Are you in high demand at your job?
- Are you a recognized expert and/or high-performer in 3-5 areas?
- Are you a “go-to person” who is constantly asked to take on the tough problems and/or projects?
- If you can answer “yes” to the above it is “likely” you will be in high demand in the open market.
- Are you EXTREMELY EFFECTIVE at working with other people?
- Can you sell – yourself and ideas?
- Can you INSTANTLY build rapport with senior executives and frontline personnel?
- Can you get things done with and through other people?
- Do you have a large personal network?
- Having more than 500 connections in LinkedIn would be a GREAT start. This would be people you know, have worked and/or are acquainted with. NOT a random collection of baseball cards (I mean connections) who wouldn’t know you if you passed them on the street.
- Does your spouse or significant other FULLY support your endeavor?
- Do they believe in you and what you plan to do?
- Do you have the financial resources to weather a 6 +/- month downturn (with zero revenue)?
If you answered yes to all of the above you “may” be in a good position to consider launching your own consulting business. If you answered no to any of the above you’ll want to carefully weigh your options.
For example, if you answered “no” to:
#1 – You may need to consider how you can develop the necessary expertise to place you in high demand at your job. This could mean that additional training and/or a longer track record of performance is required (a few gray hairs don’t hurt 🙂 ). Perhaps you’ll want to place this dream on the shelf for 3-5 (or more) years until you can answer this question with an emphatic “YES!”
#2 – Regardless of your chosen field of endeavor the number one attribute you MUST have to be an effective consultant is exceptional interpersonal skills. You may have the requisite technical skills or domain knowledge but if you are NOT highly effective in working with other people launching a consulting practice will definitely be a challenge.
#3 – Once you are “outside of employment” (a GREAT thing!) you will find that having a large personal network is the number one thing to “keep you busy.” In fact, over 90% of my business has come from my personal network. If you don’t have a large personal network you’d better know how to “dial for dollars.”
#4 – Have a good long talk with this person to find out why they are not in support of your endeavor to determine if there is anything you can do to ease or eliminate their concern. And/or are they telling you something you really need to hear? Perhaps you’ve placed a higher estimation on yourself / skills than reality. Or, you need to give them a better understanding of your skill-set and accomplishments so that they better understand your capabilities and offerings. If you cannot get to a fully qualified “YES!” on this one you will not have the support on the home front that can be very helpful in ensuring your success. Especially when things don’t go according to plan.
#5 – Without the financial resources to weather a 6 +/- month downturn (with zero revenue / income) you could still consider “initially”:
– Doing some consulting “on the side” while you maintain your existing job. This will allow you the time to test the waters and build-up a safety net that can sustain you for a period of 6 +/- months for when (not if) there is a downturn in your revenue stream.
– Becoming employed or engaged by a consulting firm that is in the general field of your expertise or primary offering. They may have more work than they can handle and will benefit by engaging you to deliver the services you offer. And, they can serve as an effective marketing channel to get your name out there (as a consultant). Just be careful in terms of the agreement you sign to ensure that it doesn’t prevent you from performing in that market upon your decision to disengage with them and embark on your own.
While there are other questions to ponder as you consider whether launching a consulting business is right for you, this should give you a good start.
And, if you answered “yes” to the above questions stay tuned…
Update 4/28/2016 – The above litmus test would apply most specifically to those desiring to launch a consulting business. For a more “general purpose” litmus test you might consider using the self assessment tool offered by the Small Business Administration. Click here to take the quick self assessment.
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