Just resigned from an executive position? Why not start a consulting business? (Part 2)

Posted by News Express | 8 August 2016 | 2,408 times

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We continue from where we stopped last week on the subject of how to take advantage of the opportunities in the consultancy industry.

Target Market

Your idea may be the best one you have ever thought of, but there needs to be a market for your ideas. Someone must be willing and able to pay you for your expert advice.

In other words, who are your potential clients. Will you be marketing your consulting services to large corporations, or will you offer a specialty that would only be of interest to smaller businesses. Perhaps your services will be sought after by nonprofit organisations. Whatever the case, before you go forward, make sure you spend time preparing both a business plan and a marketing plan. You won't be disappointed with the results, especially when clients begin paying you.

Why an organisation wants to hire you. Studies have it that the top 10 reasons organisations hire consultants are:

A consultant may be hired because of his or her expertise. This is where it pays to not only be really good in the field you have chosen to consult in, but to have some type of track record that speaks for itself. For example, I mentioned earlier the people who want to become an expert as fund-raising consultancy through their working experience at the nonprofit organisations. Every client who hired these people was doing so partly on the basis of their track record alone. After all, if you are a nonprofit organisation that needs to raise say $1 million or its equivalent, it makes sense to hire someone who has already raised millions for other organisations.

A consultant may be hired to identify problems. Sometimes employees are too close to a problem inside an organisation to identify it. That's when a consultant rides in on his or her white horse to save the day.

A consultant may be hired to supplement the staff. Sometimes a business discovers that it can save thousands of U.S. dollars a week by hiring consultants when they are needed, rather than hiring full-time employees, or similar to the outsourcing strategy in HR. Businesses realise they save additional money by not having to pay benefits for consultants they hire. Even though a consultant's fees are generally higher than an employee's salary, over the long haul, it simply makes good economic sense to hire a consultant.

A consultant may be hired to act as a catalyst. Let’s face it. No one likes change, especially the Nigeria business class. But sometimes change is needed, and a consultant may be brought in to “get the ball rolling.” In other words, the consultant can do things without worrying about the corporate culture, employee morale or other issues that get in the way when an organisation is trying to institute change.

A consultant may be hired to provide much-needed objectivity. Who else is more qualified to identify a problem than a consultant. A good consultant provides an objective, fresh viewpoint, without worrying about what people in the organisation might think about the results and how they were achieved.

A consultant may be hired to teach. These days if you are a computer consultant who can show employees how to master a new program, then your telephone probably hasn’t stopped ringing for a while. A consultant may be asked to teach employees any number of different skills. However, a consultant must be willing to keep up with new discoveries in their field of expertise and be ready to teach new clients what they need to stay competitive.

A consultant may be hired to do the “dirty work”. Let’s face it: No one wants to be the person who has to make cuts in the staff or to eliminate an entire division.

A consultant may be hired to bring new life to an organisation. If you are good at coming up with new ideas that work, then you won’t have any trouble finding clients. At one time or another, most businesses need someone to administer “first aid” to get things rolling again.

A consultant may be hired to create a new business. There are consultants who have become experts in this field. Not everyone, though, has the ability to conceive an idea and develop a game plan.

A consultant may be hired to influence other people. Do you like to hang out with the rich and famous in your town. If so, you may be hired to do a consulting job simply based on who you know. Although most consultants in this field are working as lobbyists, there has been an increase in the number of people entering the entertainment consulting business.

Location and Employees. Your consulting business will probably not require a large capital investment at first. In fact, if you are able to, you should consider operating out of your home. (Certain deed restrictions and local laws may prohibit you from doing this; check with an attorney before you proceed.)

There are many advantages to having a home office. Among them are:

Low overhead expenses – You don’t have to worry about paying rent or utilities for an office; you will appreciate this feature until you establish a regular client base.

Flexibility – There is little doubt that operating as a consultant at home gives you a great deal of flexibility. You can set your own hours and take time off as you need it. For anyone who has had to commute to and from a job during rush hour, this will be a welcome change of pace. Your home office space will most likely be tax-deductible. The FIRS has relaxed the rules for people who work at home, but check with your account or income tax preparer to see if you qualify for this deduction.

Employees – When you first open the doors to your consulting practice, you may be able to handle all the operations by yourself. But as your consulting business begins to grow, you may need help handling administrative details or help completing the actual consulting assignments.

You need to make some important decisions. For example, do you have the time it will take to make labels and insert your brochure into 1,000 envelopes. Can you afford to spend time doing administrative tasks when you could be using that time effectively marketing your services and signing up new clients?

There are many options when it comes to the issue of time; to decide if you need help with your paperwork. For example, a quick look around will reveal that there exists a number of small secretarial support firms. The rates will depend on a variety of factors, including how large or small an organisation it is and what types of services it provides.

While it will pay you to shop around for these types of services, don’t select a secretarial service just because it happens to have the lowest prices in town. Instead, ask for references, preferably from other consultants who have used their services, or from small-business owners. A good, reliable support service is worth the price in the long run.

There will come a time, however, when you may find it more cost-effective to hire someone to work in the office with you. Hiring a good administrative support person can sometimes mean the difference between success and failure, between obtaining more clients or constantly losing clients.

There are some benefits to having someone in the office with you. Among them are:

You save time and money – By having someone concentrate on the more routine tasks (opening the mail, filing, answering phones, etc.) you can focus all your efforts on recruiting new clients. Think about this: Would you want to lose a $500-a-day client because you were too cheap to hire someone work for you or to stuff your brochures into envelopes.

You don’t worry about being out of the office – If you are a one-person operation, it's hard to be out on the road marketing your services and you wouldn’t be worried about clients calling at the office, while you are out on the road marketing your services. You will also have someone to offer you another perspective to all that you are doing. Sometimes it can be pretty lonely trying to do everything yourself. Having someone around the office during the day who can offer another perspective can be worthwhile.

We would continue with this article next week as we discuss further the subject of how to take advantage of the opportunities in the consultancy industry. Send me an SMS/WhatsApp message or Call for more details and training opportunities.

•Lawrence Nwaodu is a small business expert and enterprise consultant, trained in the United Kingdom and the Netherlands, with an MBA in Entrepreneurship from The Management School, University of Liverpool, United Kingdom, and MSc in Finance and Financial Management Services from Rotterdam School of Management, Erasmus University Netherlands. Mr. Nwaodu is the Lead Consultant at IDEAS Exchange Consulting, Lagos. He can be reached via nwaodu.lawrence@hotmail.co.uk (07066375847).

Source: News Express

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