Bruce Katcher [above] is passionate about consulting. “I don’t think anybody should have to work for an employer,” says Katcher, founder and executive director of the Center for Independent Consulting and author of An Insider’s Guide to Building a Better Consulting Practice [American Management Association, 2010]. “If you have skills, you don‘t need any boss other than yourself. You can own your life.”
Katcher took his message to a recent meeting of the IEEE Boston Section’s Consultants’ Network, whose engineers and computer scientists had gathered to learn about the best business models and marketing methods for a consulting practice. The Consultants’ Network helps IEEE members establish themselves as independent contractors.
Katcher opened his presentation with an anecdote from the movie Gone With the Wind after first describing his feelings following his last days two decades ago as a full-time employee. It was 1993 and Katcher had been laid off, ironically enough, by a consulting firm. The experience left him scared and feeling powerless, and he quickly decided that he would no longer let someone else control his family‘s financial destiny. “As God is my witness, I‘ll never be hungry again,” Katcher said, quoting Scarlett O’Hara at the end of the movie. He wanted to direct his own destiny, and he decided he could do it by becoming a full-time consultant.
WHAT’S YOUR MODEL?
The first chore for Katcher was to come up with a business model for his new consulting business. “Every company needs a strategic business model,” he says, “even an individual consultant.”
At the Boston meeting, Katcher described 22 business models, each with its advantages and disadvantages. Unfortunately, most consultants first choose a model that won’t work, he says: “This model has them charging for their time. It’s a bad business model because if you charge by the hour, you have no leverage.” Clients are always looking at their watches to see how much you’ve worked, he says. An hourly rate also leads to a terrible work-life balance, he adds, noting, “You’re always a slave to the clock.”
A better model, he says, is to work for a retainer. “You’re charging a certain amount of money each month for a client to have access to you,” he explains. For example, a software consultant might charge a client a set fee every month to be available to answer calls when certain predefined situations come up. “You don’t say how many hours you will work up front, because then you’re charging for your time,” Katcher explains. The retainer model offers a higher income potential, as well as a greater work-life balance, he says, “because the client might not call you for three months, but you’re still collecting the money.”
Other business models include working on a per-project basis, which offers moderate income potential but forces consultants to remain on the lookout for the next assignment; working for a contracting firm, which offers a constant flow of work but only a fraction of the pay you’d get on your own; and the “freemium” model which, like Skype and many smartphone apps, gives away the basic work for free but adds fees for additional functions.
Whichever business model you choose, make sure to leave enough time to market yourself so you can find new clients, Katcher advises. “If you don’t carve out the time in your schedule,” he says, “you’re not going to be able to do any marketing.”
Katcher discussed 18 marketing methods including cold-calling and direct-mailing potential clients, speaking at conferences in your area of expertise, advertising your services, and writing articles for trade magazines. Consultants should be careful to choose the approaches that work best with their individual writing, presentation, and interpersonal communication skills. “For example, I love public speaking and writing,” Katcher says, “so they are great ways for me to meet potential clients. But if you don’t enjoy doing those things, you’ll always put that type of marketing on the back burner.”
One tried-and-true marketing method turns out to be the best option for all consultants: keeping up with personal networking. “The people you’re going to get business from are the ones who know you, respect you, and trust you,” Katcher says. For consultants just starting out, that personal network will become the best and easiest source for getting in touch with potential clients.
CHANGE THE RULES
Katcher closes his presentations with what he calls “a lesson from the future.” At the end of the movie Star Trek II: The Wrath of Khan, viewers learn the secret of how Admiral Kirk became the only person to pass the Starfleet Academy’s Kobayashi Maru simulation: He changed the rules to get the outcome he desired.
“Here‘s the moral: If you keep doing the same things the same way all the time, you’re not going to get different results,” Katcher says. “If you want independence, if you want control of your own time, if you want control of where you work and what you do, then change the rules for yourself. Consulting is the way to do it.”