Going out on your own, finding your own clients, not being tied to an employer, that’s what this podcast is all about. There are multiple ways to accomplish this and structure your own consulting or freelance business, just like there are multiple reasons that people do so in the first place.
One of those ways is working, usually full-time, on a longer project at a giant company and, of course, at consulting rates. It can be the perfect opportunity to have tremendous freedom while not needing to find clients as frequently.
Jonathan Dison, founder of Lightrock Consulting and Bench Watch, started his career working for Arthur Anderson, built his own consulting firm, and now helps people find and get matched with consulting positions at major corporations. Jonathan shares how you can break into the consulting market and start getting paid more to work on longer-term projects.
Jonathan shares with us:
Jonathan started as a consultant at a big firm, Arthur Anderson, because he didn't know what he wanted to do. Consulting is a great thing to do when you don't know what you want to do.
“Consulting is the best educational experience that most people can get. You are in the trenches, you are dealing with real world things, you get exposure to how decisions are made and how the value gets created.”
After undergrad with a degree in communications, Jonathan ended up consulting with Arthur Anderson and learned so much.
Job's are not stable:
The accounting side of Arthur Anderson got in trouble with the Enron scandal and collapsed over a couple of months. Jonathan stayed on for a bit longer when his division was acquired KPMG Consulting, but...
“It made it very clear to me, I think, that the 30-year job is done.”
Jonathan decided to become an independent consultant and worked with other staffing firms and consulting firms, using these other organizations to be his sales force. Jonathan would take on their work after they had done the hard part of selling, which he didn't really like doing.
It was good money as an independent business, he started gaining trust with clients, and he organically grew into a firm. Sales were organic rather than outreach. He does no marketing, no sales, and only works with people he trusts. He focuses on quality over quantity. When it got too big to manage on his own, he brought in new partners.
“There's just this huge opportunity for people to basically serve as an external worker for companies who are looking for that.”
“If you buy into the thesis that change is accelerating, companies are having to change and adapt more quickly driven by technology, and market dynamics, and all those sorts of things, that is driving a lot of the need for a more flexible workforce. Another thing is that a lot of companies are starting to realize that employees are more expensive now than consultants.”
The cost has come down for consulting to $50-$200 depending on skill level. Employees have to have benefits and certain rights and severances etc. Companies are therefore shrinking their core employees in order to manage their expenses and hire an external workforce.
The current marketplace is $425 billion per year. 50% in the US, 30% in Europe, and growing in China and India. That's a lot of money. But if you are calling yourself a freelancer, you might be missing out. The Fortune 500 or the Global 2000 are looking for consultants or contractors, not freelancers. But it's the same thing.
Consulting vs Employment
Jonathan believes that the trend toward hiring consultants is a net positive for everybody.
Companies get the flexibility and adaptability to navigate turbulent waters and move faster in changing markets.
The workforce also gets a net positive. Consulting is a real opportunity and not very risky. Yes, it is painful to hear about the stories of downsizing and people getting laid off or being laid off yourself. But, the reality is, it is less risky to depend on the world economy for work rather than a single company. It's a huge mind shift.
“It's a huge hurdle if you have been an employee to understand that you actually do have more security as a consultant in contract than you do as an employee.”
Check out The Consulting Economy for more detail.
Most consultants are in the trenches, doing a task or managing an area of a project for a specified period of time of 6-24 months. And consultants tend to get paid better than employees and do better work.
Build Your Consultancy:
To get started, you need a resume, a LinkedIn profile and a Bench Watch profile and a niche. Then, start connecting.
“You can connect with consulting and staffing firms that always have projects for you. You don't even need to build up a client base. You will organically do that overtime.”
The staffing and consulting firms are the ones with the overhead and infrastructure to get contracts with big companies and who are always looking for consultants to do the work.
Big companies (Fortune 500 and Global 2000) don't use the term freelancer, ever. Freelancer sounds risky and immature and meant for short-term projects. They use “consultant” and “contractor” which is more like 6 month to 3-year projects.
The big companies have procurement departments who have contracts with tier 1 and tier 2 vendors, the staffing and consulting firms. These vendors have a statement of work, a master services agreement, have gone through vetting processes, get checked by the company for insurance and bonds, etc. It is a very mature and formal process to work with a Fortune 500. It is really hard if not impossible for a solo-consultant, freelancer, to work directly with a Fortune 500 because a solo-consultant probably doesn't have all this infrastructure in place.
If a big company needs a job filled, they will send a notice to several vendors who then compete to respond quickly and with quality, to get the right people. These vendors live and die to make sure they have a broad network of quality contractors and who is available.
Bench Watch manages these broad networks and monitors who is available or not at a given time. That way, when the client requests a contractor, the staffing and consulting company and quickly find the right candidate for the job. The consultant then submits their resume to get the job.
As a freelancer, go connect with the staffing firms!
To get connected, you should network. Bench Watch is a great short-cut to networking as well, so check it out. Also, Google! Figure out who the technology staffing firms are in your area and reach out. Build a relationship with the recruiter.
But keep in mind that you are an individual business so you need to build relationships with multiple staffing firms, ideally 5-10 firms to keep your pipeline filled and have access to a variety of jobs and opportunities.
Also, if you are a start-up or trying to build your own client base, then taking on consulting jobs part-time will help supply the cash-flow for you to thrive.
But, let's back up a bit. A key to success is making sure that you niche down.
A big mistake is to tell the market that you can do a bunch of things and hope that one of those things will stick. Instead:
“Pick a narrow niche and put that out there because that's what's going to make you stand out.”
This is a lesson that Jonathan learned the hard way. After pitching his heart out at a meeting to a big firm, saying he can do everything under the sun, one of the executives told him:
“Look, you guys are telling them that you can do everything and they don't believe you and I don't believe you. Tell them what you do better than anybody else.”
In other words, niche down. When he started his next firm, he focused only on change management for oil firms. Finally, he started getting some success.
As an individual, focus on a few specific skills or a specific industry that you are interested in. For example: “I am somebody that has experience with data systems and I'm super interested in how this is going to transform the health care industry over the next 20 years.”
Hiring managers now know exactly what niche you are in and what you are interested in. Now they know what box to put you in.
But, people are afraid to pick a niche. But if a specific niche isn't working for you, you can change your focus in less than 2 hours by updating your resume and profiles. Ask the staffing firms why something isn't working and they will coach you. Then, you can adapt.
From the buyer's perspective, it is all about confidence. If the resume is coming from a trusted friend, it is more likely to get looked at. The other element of trust is for the client to easily put you into a box and the box matches the box that you need, then the confidence goes up. Most of the time, they are managing by feel. If they can figure out what box to put you in, they will look at the next resume.
- The Consulting Economy: How to Manage Your Career in the Coming Workforce Revolution by Jonathan Dison
- Consulting: The New MBA with No Debt
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