If Part 1 of this series only served to strengthen your desire to launch a freelance or small team consulting business, you should be aware of some of the obstacles you will face throughout this journey. While this path can offer a great deal of flexibility and independence, it is not without its own set of drawbacks. We strongly recommend thoughtfully considering these factors and honestly evaluating whether your personality and temperament are a good fit for this style of work.
The Boundaries of Your Role
One of the key benefits an outside consultant brings to each engagement is a fresh perspective on how to solve the problems currently facing the organization. In order to maximize the value you deliver for your clients, it's important to share your insights and thought process in a constructive and collaborative manner. At some point, you will encounter a client that disagrees with you and does not take your advice. This is a natural result of working to solve complex problems; there are multiple approaches and people don't always agree on the best approach.
In these cases it is crucial to voice your thoughts in a clear, honest manner and once you have done so, to set your opinion aside and embrace whatever approach your client has selected. When you have operated as the decision maker in similar situations in the past, it can often be difficult to fully support an approach that you disagree with. As a consultant it is important to recognize and accept that selecting the direction to proceed in is no longer your role or responsibility.
If you are unable to proceed in good conscience with the approach selected by your client, you should acknowledge this with them and seek to find an alternative way to leverage your skills for their benefit (e.g. finding another project to support, rolling off the engagement, etc). It is better to end an engagement earlier than intended with a client that values and respects your skills and contributions than to tarnish your relationship with the client by fighting a decision that they have made up their mind on or supporting its implementation in a lackluster manner.
Maintaining Work/Life Balance
Nearly all consulting engagements have a negotiated hourly rate or an expected hourly rate that can be calculated from the project fee and an estimate of the time required to complete the project. This provides a direct conversion rate between time and money, which it turns out can be a very dangerous thing. When you go to the movies you can multiply your hourly rate by the 2.5 hours you'll spend watching that movie and end up questioning whether this relaxing activity is really a worthwhile use of your time. Or after heading out early on a Friday to go hiking with friends, you can reflect later on in the weekend about how much that activity cost financially.
No matter what the activity is, you can now assign a concrete opportunity cost to it. This has the potential to significantly incentivize overwork and to sap the joy out of activities that would otherwise allow you to recharge and refresh. At the end of the day, the impact of this on each individual varies widely depending on their personality, but it's important to watch out for.
If you notice yourself constantly calculating the financial cost of your time, consider setting clear boundaries for your work day or blocking off time on your calendar for hobbies or leisure activities. This will force you to stop measuring this time financially and instead optimize these blocks of time according to the joy and satisfaction they provide.
Extended Time Off
If you've always worked as a full-time employee at companies that had an "unlimited paid time off" policy, you may not fully appreciate how amazing the idea of "paid time off" actually is. Whether you're on vacation, caring for a newborn, or recovering from a medical procedure, you're still paid as if you're working full days. This is nothing short of magical.
As a consultant your first vacation or extended leave will quickly disabuse you of this misconception. If you're not working, you're not getting paid. This makes it particularly important to plan for these periods of decreased revenue. For example a two week vacation can result in your monthly income being cut in half. If you're planning to take a significant amount of time off (e.g. parental leave, medical leave, etc), it becomes even more important to prepare well in advance of this period of inactivity.
Taking time off to care for yourself and those around you is extremely important. The quality of your both work life and your personal life will suffer if you neglect these activities on an ongoing basis. With a bit of planning and preparation, we can attest that it is feasible to manage the financial and project scheduling impacts of anywhere from 2-8 weeks of uninterrupted time off.
Circumstances Outside Your Control
While there are a number of steps you can take to set yourself up for success as a consultant, these activities only cover about half of the factors that will make or break your business. As a full time employee, an economic downturn or a series of mistakes made by the leadership team can result in unexpected layoffs. However if you meet or exceed the expectations for your role, your sense of job security should be fairly high. As a consultant, engagements typically expire every three to six months unless explicitly renewed. This highlights the key role these external decision-makers play in the stability and longevity of your business.
In an ideal case, you'll get 4-6 weeks of advance notice when a project is about to ramp down. While this may sound like more than enough time to find your next project, it goes quickly. If you're not careful, you can feel rushed into taking on a project that is not be an ideal fit for your skills, desires, or availability. In extenuating circumstances the notice you receive about the end of a project can be much shorter. At the start of the COVID pandemic for example, one of our clients saw a significant downturn in their revenue stream and had to back out of our engagement abruptly. In these cases, the importance of having a growing network of potential clients and a few active business development conversations becomes immediately apparent.
Actively Seeking a New Project
At the same time, seeking out and landing a new project to backfill a gap in your availability is far easier said than done. Even if you have a strong network of potential clients, time spent performing outreach activities, vetting the interest you receive, and landing a project can become a distraction from the work at hand. Consultants without this network to draw upon are forced to use platforms like Upwork and Freelancer.com, which in my experience are a lot like seeking true love through a series of blind dates, you may get lucky every once in a while but you have to be willing to wade through a lot of bad experiences to find the few good apples.
As with finding a new full-time role, you want to make sure the client and project are a good fit for your skills and interest. If so, you will set yourself up to provide ample value to the client and enjoy working with this organization through many renewal cycles. Otherwise you're likely to find yourself right back in this same position a few months later with very little to show for the time and effort you expended landing this new project and getting ramped up with the team. We feel very lucky to have had wonderful projects and clients largely fall into our lap when the need has arisen. The few times we've had to work hard to line up our next engagement have led us to deeply value these relationships.
Operating like an Employee
One thing that is always in your control is the level quality and professionalism you demonstrate throughout all aspects of your work with a client. It's not uncommon for some full-time employees within an organization to view outside consultants as mercenaries whose primary goal is to make a few bucks with as little time and effort as possible. We've found that the best way to change peoples' opinions, or to at least to separate yourself from this class of consultants in their mind, is to maintain the same mindset as if you were a full-time employee. Strike the same balance between shipping the functionality being asked for while doing so in a way that best sets the team up for future success.
For example, invest in artifacts like documentation, observability dashboards, and automated test coverage, that will equip the team to maintain and extend the features you deliver with ease. None of this should come as a surprise and in reality these are ordinary expectations for high quality work, but as a consultant who has no guarantee of being involved in the project for years to come, being particularly diligent about capturing these artifacts ensures that no matter what happens you have set the team up for success down the road.
If you're willing to remain mindful of and combat these challenges, you can certainly find success and satisfaction in running and growing your consulting business. Are there other aspects of this style of work that raise concerns for you? We'd love to hear about them and be happy to share any insight available from our experiences. Feel free to reach out to us at hello@gobetweenlab.com. And don't miss the next post in this series as we wrap up by sharing the biggest benefits we've realized from launching and operating our three person consulting business over the past three years.