If you’ve got a whole lot of knowledge and experience in a specific topic or field, some businesses might regard your insight highly enough to pay for you to come in and advise them as a freelance consultant.
Becoming a consultant allows you to focus on what you excel at. No more ‘Jack of all trades, master of none’; you can create a niche for yourself as the pre-eminent brain-for-hire on the subject you know most about. As a freelance consultant, you’re now the master of your trade, as well as the master of your own destiny.
Of course, freelancing (which means you are self-employed) can come with its disadvantages as well. In this article, we’ll be covering the pros and cons of becoming a freelance consultant in order to help you figure out whether this is the right move for you.
Why do you want to become a consultant?
Becoming your own boss means that you play by your own rules - to some extent at least. Many people decide to give up their comfortable PAYE gig to escape the confines of a regular office job, to gain more recognition for their work, or to pursue their own good ideas.
While becoming a freelance consultant offers far more personal freedom in terms of the work you decide to take on (and the locations where you work) it’s vital to consider that the lack of stable income in dry periods may result in you having to take on less desirable work with inconvenient hours.
It’s also important that you aren’t making a rash decision based on wanting to escape from your boss, or not wanting to work as hard. If you’re constantly being reprimanded for poor timekeeping or lack of motivation, you should make sure you can guarantee things will be different when you're embarking on this lifestyle change. You may have a unique set of skills, but if you’re a pain to work with, most companies will end up cutting ties and finding another consultant to work with.
If you aren’t 100% sure about how you want to proceed, you might want to consider trying to get a couple of freelance gigs alongside your full-time role while you decide whether this lifestyle would work for you. Slowly reducing your hours in direct employment while you build up your freelance business is a great way to leave your job while minimising money worries. Our ‘Setting up a small business on the side’ article can help you with this. Though you'll also want to ensure that you don't forget about the tax you may need to pay from your freelancing on the side.
What personal attributes should a freelance consultant have?
Consultants are usually freelancers or contractors rather than employees, and thus can be easily brought in and let go of, so you’ll need to make sure your people skills are top-notch. This includes the willingness to listen attentively to what the client’s needs are, and being able to tell them where you think they’re going wrong without sounding condescending or overly negative.
You’ll need to be able to see the problem that really needs solving, which may not be what the client originally thinks they need help with.
A reputable and effective freelance consultant should have an excellent knowledge of the market they’re working in - not just in the present but also how it has evolved, and any opportunities or threats that may be on the horizon.
You’ll need to demonstrate your value by completing your research thoroughly, while displaying a passion for what you’re doing, and by articulating what positive changes your involvement will bring to your potential clients. Ultimately you’ll be judged on the results of your findings and recommendations.
Questions you’ll have to ask yourself
Leaving comfortable full-time employment to embrace freelance consultancy can be a risk. The rewards can be great, but there are several things you’ll have to weigh up before you take the plunge.
Business coach David Mellor, the author of the ‘From Crew to Captain’ series of helpful books on making the transition from a big institution to working for yourself, has put together a simple test to help you decide whether you’re ready to become self-employed, consisting of these questions:
Are you comfortable with not having a regular predictable salary?
Have you worked out your survival budget?
Are you confident you can exceed your survival budget?
Is your family supportive of your plans?
Have you taken sufficient advice on your idea?
Do you have a vision of what you want your business to look like?
Do you have the self-belief that you can make that vision a reality?
Do you have the drive and determination to make it happen?
Are you passionate about your idea?
Has anyone stress-tested your business plan for viability?
Mellor suggests marking yourself out of 10 for each item, and then totalling your score.If you score less than 30, you may want to rethink whether this is for you.If you score less than 60, you may want to revisit some of these issues before you make a decision.If you score above 60, you probably have enough momentum to proceed to the planning phase.
You can also check out our handy article “13 things to consider before going self-employed’.
Working out how much to charge
Every aspiring freelance consultant will need to decide how much to charge as a day-rate. It’s important to have an idea of what the generally-accepted rate is for freelance consultants in your sector, and what the businesses who are paying you might deem to be too steep. On the other hand, you won’t want to stitch yourself up by charging too little for your time.
One way to decide on how much to charge is to work out how much you want to earn per year, and work backwards from there. For example, if you’re hoping to take home a salary of £50,000, you'll need to divide this by 225 - the number of working days of the year (discounting weekends and allowing for 28 days annual leave). Based on this, your day rate would be £222.22.
Bear in mind that you might need to haggle to build initial relationships with clients. Once you've established a relationship and demonstrated your value, you’ll be in a stronger negotiating position to secure a better rate.
How to structure your consultancy business
You also need to decide whether you’re going to be working as a sole trader, limited company or through an Umbrella company. There are a number of things to weigh up, but usually, a self-employed consultant would choose to work through a limited company. The professionalism of a limited company can help with attracting clients and it can be more tax-efficient meaning higher take-home pay. We explain the main advantages of a limited company in our knowledge article and our Take-Home Pay calculator can show you the financial impact of the different choices you have.
Decide where you’ll work
Of course, working from home has its advantages and disadvantages. You’ll probably save some pennies on food and travel, but now have to pay for extra gas, water and electricity usage, coffee, equipment, toilet paper… the list goes on.
If bills are included in your rent, your landlord will probably want to increase how much you pay them to make up the difference. Similarly, If you work from home, you may be subject to business rates for the part of your property you use for work, while still paying council tax for the rest of it.
Our article "How to set up a home office (without breaking the bank)" can help you consider cost-effective ways to get your home-office up to scratch and we also have an article on "What expenses you can claim when you work from home".
Alternatively, if you work more effectively when surrounded by the creature comforts of state-of-the-art offices but don’t have the cash to pay for them, a co-working space may be the perfect financial solution for you.
Managing your finances
The annual Self Assessment season (don't leave it to the last minute!) still causes headaches for many. However, staying on top of your business finances needn’t be hard with services like Crunch - we're even helping you to get started with our freelance invoice templates, ready for you to customise and send to your clients.. We’ve got an article about the benefits of a sophisticated online accounting service.
By the way, if you end up working with a client who is bad at paying up, grab one of our late payment reminder templates to give them a professional but firm kick up the rear. And if that doesn’t work, you can always enlist the help of a professional debt collection service.
Of course, no work means no income, no income means financial trouble, and financial trouble means an unsustainable way of life. You obviously don’t want to find yourself back at your old office, begging your former boss for your job back. Once your consultancy business starts to gain a reputation and the testimonies and reviews begin to pile up, you’ll find work a lot easier to come by - but how do you find work to get the ball rolling, and continue to get the kind of clients that will keep inviting you back?
Word of mouth
If you’re excited about your new career, make sure everyone knows it. Don’t feel like a burden for contacting your nearest and dearest, explaining you have this exciting new business, and that you’d really appreciate it if they could help you get the word out. You’d do the same for them, right?
Hosting your own business website gives you a professional aura and can be an easy way for clients to find you online, especially if you’ve taken advantage of some search engine optimisation tips from research.
There’s a big market out there for Content Management Systems (CMS) that allow you to create professional-looking websites with little or no coding knowledge. Tools like Squarespace or Wix can get your personalised site online within a couple of hours for free - providing you let them host ads on your site (ad-free options tend to start at around £10 a month).
If you’re too busy to knock your page together yourself, or want something a bit more bespoke, why not search local jobs boards for website designers? If your specialist services would benefit them, they may even be interested in doing a skills trade instead of a cash payment.
Organise your social media presence wisely based on your industry. Depending on your line of work, consider making accounts on the most popular platforms, such as Facebook, Twitter, Instagram, and LinkedIn. If you’re becoming a consultant, you should have a good idea of where your target audience tends to hang out.
Weigh up how much of your outside-of-work personality you want to share with potential clients. Honesty and transparency are certainly desirable traits for a consultant, but try to keep it professional - oversharing or getting into public online ‘beefs’ might put many would-be clients off.
There’s also more to social networking than the standard big platforms that your friends and relatives are all on. Sites like Reddit, Quora and community forums allow you to respond to pressing questions that someone of your standing is best qualified to answer - a polite alternative to interrupting people’s conversations in the pub. You may find better quality leads coming from these areas.
You know you have a vast knowledge of your chosen subject, but have you demonstrated this to your audience? Providing evidence that you know what you’re talking about via or blog or vlog (preferably both!) will bump up your credibility, while providing a much-needed relatable touch to help you stand out from your competitors.
Be sure to include a newsletter signup form on your blog to ensure anyone who wants to stay in touch has an easy way to subscribe to your content - of course, you’ll need to make sure this is GDPR compliant!
As YouTube is the second biggest search engine in the world behind Google, you’d be remiss not to consider how a strong presence on the video streaming platform can generate subscriptions, and hopefully build strong leads. If you’re stuck for content ideas, why not repurpose some old written content for a video tutorial?
Networking events are great places to pitch your services to business partners, as well as potential customers, or people who can point you in the direction of work.
Getting out and about amongst your target audience via networking events or meetups will help to keep you visible.
Go into these armed with a professional-looking business card which contains all your important messaging and credentials, as well as somewhere to note down any important info you pick up during the event.
If you come across another business that you think your target audience might be interested in, the feeling could be mutual. If you suspect this is the case, make contact and see what sort of relationship you can foster - a rising tide lifts all boats, after all. Who knows, a successful chat could result in you going halves on some promo material, sharing much-needed advice, or even entering a partnership.
Job boards and recruitment agencies
Recruitment agencies have access to thousands of jobs and, often, contacts with thousands more employers and companies, greatly improving your chances of finding work and opportunities.
The kicker is that recruiters could charge anywhere between 10% and 25% in commission fees. Even if you go on to do more work for the company they put you in contact with, they’ll often do what they can to take credit for putting you in touch in the first place.
Responding to enquiries
Quite often, you’ll receive enquiries simply asking for your rates. In these situations, it’s worth picking up the phone to ask them what they need, how you can help and what their budget is. This way you can get a better idea of what they’re trying to achieve, whilst building a rapport with the potential client.
If they have objections, you may deem it appropriate to haggle based on their expected rate, or explain to them that your rates are proportionate to your skills, experience and ability. By paying a little more, your clients can get a better service. Our article “How Much Should I Charge My Clients?” will help you decide on a sensible rate.
Impressing the client
You should never walk into an interview or meeting without ensuring you’ve done your research on the company. Failure to do so may result in you being perceived as someone who is too lazy to invest in.
What you’ll need to know depends on the type and level of the role you’re going for; at the very least, you should know what they do, how they do it, where they do it, and who they do it for.
Make sure your CV is tailored sufficiently to the gig for which you’re applying. Your CV is effectively your sales pitch, so you’ll need to dedicate some time to it – and make sure you’re selling yourself effectively. Of course, this can take a lot of time, and can be frustrating on the occasions when your time and effort goes to waste, so it’s sensible to put together an easily-editable ‘master’ version of your CV.
Just remember to double-check you’ve not left inappropriate bits from previous iterations in!
While your CV states you have certain skills and experience, a portfolio demonstrates those skills. It’s a tangible way of showing your potential client you have the traits they’re looking for in a successful candidate. This can be in the form of a slide deck, a blog, video, or website.
Our “Land your dream gig with the ultimate contractor CV” article delves deeper.
Make sure you can talk about each section of your CV and portfolio, and have answers prepared for questions that are likely to arise. Author of ‘From Crew to Captain’ series David Mellor has some advice regarding points that tend to come up in sales meetings:
1. “Remember to differentiate between the features (what it is) and the benefits (what’s in it for the buyer of your offering.”
2. “If you are asked what your USP (Unique Selling Point/Proposition) is, make sure you have a response. Silence will not help your cause.”
3. “If you are asked for proof that you can do what you say you are offering, ensure you have some options up your sleeve e.g. qualifications, case studies, testimonials. The crucial issue is to de-risk the decision from the buyer’s perspective.”
After more great interview tips? Check out our “Interview tips for freelancers and contractors” article.
Fill your calendar
Want help finding work as a freelance consultant? Check out our jargon-free article ‘Finding work as a new consultant’ for helpful tips on everything from lead generation to keeping your clients happy.