On Monday, I moderated the session "The Consultant's Toolkit: Tips, Techniques and Words of Wisdom" for the Consultants Section of the Leadership and Management Division. On the panel for the session were:
Some lessons from the panel:
- When beginning a consulting business, it is important to have an lawyer, banker and accountant as advisors. If you also include an insurance agent, you then have your BAIL team (banker, accountant, insurer, and lawyer).
- A lawyer and accountant can advise you on the best form for your business, e.g., corporation, S-corp, limited liability partnership or sole proprietorship. (more info)
- An information consultant does not have high start-up costs. Often you can get started after designating some space in your home, acquiring basic office furniture, and a computer.
- While start-up costs are low, it can take months or years for a consulting practice to find a rhythm and to have steadier cash flow.
- Marketing is always important, even when you have many projects.
- It is important to have enough financial resources to survive periods of low income. You'll also need to have money to live off of at the start of your business, since it is generally unlikely to have a paying client immediately.
- Don't invest in a lot of marketing material. While an expensive brochure sounds great, most find it unnecessary to invest in a lot of them.
- Setting your fee structure means understanding your costs (all of them). You also need to know what your market will bear. Mary Ellen Bates' book Building and Running a Successful Research Business: A Guide for the Independent Information Professional, Second Edition contains useful information that will help you with this task.
- Understand what type of work you want to do as well as the type of work that you do not want to do.
- For work that is outside of your scope, hire someone else to handle it. It could be a contractor or part-time employee.
- Being a consultant can mean working all the time, since you're your own boss and there is always something to do. It is important to create time away from work.
- The number of projects/clients you can handle at one time will vary.
- Your consulting practice/focus will change over time and that's okay.
- It is important to interact with other consultants and learn from them. There seems to be a growing number of consultants in SLA. There is also the Association of Independent Information Professionals. Jan Sykes noted that the Consulting Section is going to work on a consultants directory for SLA.
Interestingly, after the session, I had two people tell me that they learned that they did not have the moxie to be a consultant and thanked me for helping them learn that!