Wednesday, January 14, 2009

Go Big or Go Get a Job

A discussion about what lies ahead for the profession of consulting in 2009 among some of my colleagues in an online forum was later directed toward a recent Washington Post article by Kathleen Parker.

Pink Slips Du Jour

The article essentially explores a trend that often occurs during economic downturns - people becoming consultants after becoming unemployed. However, just saying you are a consultant does not necessarily make you a consultant. It is a career shift that must be made with careful thought and planning.

Several years ago, I learned that lesson the hard way and struggled to make ends meet after I found myself without a job. While I was lucky to have one client, it wasn't enough to pay all of the bills. I didn't have the business acumen I thought I did and I spent most of my time focusing on the client and not enough time on developing my business to acquire more clients and more income.

First of all, let me say I appreciate anyone willing to do whatever it takes to meet their obligations, be it financial or personal. These days, "self-reliance" is an all too uncommon term in the public vernacular what with bail-outs being given to companies who really do deserve to fail. Personal opinions and politics aside, consulting can be a good career choice in an economic downturn, but you must prepare ahead of time. The best time to start a consulting business is while you are employed. You have a sense of security with a steady paycheck that will in turn give you better clarity of thought. This way you can formulate what you want to do, what you want to offer and who you want to serve.

In addition to thinking about what you want to do as a consultant, be sure to do the following:

  • Check your business acumen. Are you prepared to run a business? People often forget that a consulting practice is a business, even if you are its only employee. If you lack knowledge in certain areas of business, such as sales or accounting - learn all you can! Read books, attend seminars and get training if necessary.
  • Create a business plan. It lays out your agenda and objectives for your consulting business and it helps keep you honest. It's amazing when you write down what you intend to do how quickly it can come together the way you envision it.
  • Create a marketing plan. Just like a business plan, it sets objectives for how you intend to promote yourself and build your business.
  • Legitimize your business by incorporating. There are tax advantages to incorporating your business. Find an accountant who will be willing to advise you on the best article of incorporation for your business. In addition, it protects your liability as you conduct business with others.
I understand this can be a lot of work just to be able to confidently say you are a consultant, but in order to be successful you must do what all other businesses go through in order to create a business. If you are not willing to do this, then I suggest you focus on finding gainful employment. Put your best foot forward. The most successful companies in the world started out small with just one or two people. While you may not become as large as Microsoft or Procter & Gamble, they too operate with business and marketing plans even to this day. If they do it, why shouldn't you?

Hanging out a consulting shingle during an economic downturn might not be a good idea unless you are willing to do the work ahead of time to legitimize your efforts. However, if you are insistant upon starting a business after being unemployed, and if you have the time, energy, resources (money) and can support yourself as you build you business, you can can successfully start a consulting practice that can thrive in any economy. Careful planning will help you win in the end.

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