Business & Work

A number of questions are necessary to assist in determining whether that is the correct path. Have you transferable skills? Have you a manner that encourages others to listen to what you say, and to act on your good advice? Are you a respected individual, with a sound track record that will stand up to scrutiny? Are you brave enough to launch into self-employment if you choose that route? Have you sufficient money to live on until the first cheque arrives? Are you likely to find consultancy work in your current business environment, or from current contacts?

Take a Balanced View

Whilst self-employment has many advantages for the 50+ working population – ability to dictate the working week (to some degree), holidays when you want them (to some degree), potential to earn good sums of money, etc. – there are also drawbacks like no paid holidays or sickness, no company pension scheme, doing your own sales and marketing, etc.

Many new consultants rely on introductions from current contacts and work from their present employer, which is only a short-term solution.

Some new consultants join an existing consultancy organisation, and thus gain the benefits of employment coupled with the facility to learn the consultancy ropes whilst earning fees or a salary. A gentle word of warning – whilst most such organisations are reputable and supportive, ensure that you check with their current consultants all the plusses and minuses of working for the organisation; ensure that the promised leads do materialise, that the training on offer is effective and worth your financial and time outlay, and that the organisation has a track record of delivering consultancy that is useful to their clients.

"How Much Shall I Charge?"

If you decide to go for the latter route – an existing organisation – they will probably set the fee rates for you. If you decide to go it alone, the question of “How much shall I charge?” is a really important issue. Charge too little, and you will probably be seen as not sufficiently qualified, so will not be offered the project. Charge too much, and you reduce the likelihood of being selected. Aim to be in the centre ground, and remember that you need to consider whether to charge extras such as travel, disbursements (eg postage, printing), travel time in addition to a daily or hourly or project rate.

At Business Link our experience is that most new consultants charge too little, on the basis of “I’ll get my foot in the door, and then can increase my fee rates once I’m established”. In the words of a current TV advertisement, “It doesn’t work like that”. It’s easier to start with a realistic fee, and to then increase it in small steps as the client realises your worth. Cost of living increases are more easily justified if you apply them regularly but in small percentages.

Doing your homework is vital before deciding whether to become a consultant. This may seem obvious, but many new consultants fail to consider the size of the potential market, the current providers, the breadth of their offer (eg as a Health and Safety Consultant, should I also mention Environmental Issues?) and the future of their specialism.

A useful tip is to consider your prospects of success through the eyes of a potential client. For example, visit www.businesslink.gov.uk to see the advice given to organisations selecting a consultant. Similarly, www.mca.org.uk gives advice about why and how to use a consultant, information that prospective consultants can use to their advantage.

Membership of a trade body or professional organisation can be advantageous in some cases, as this may create leads for you and/or the opportunity to purchase the necessary insurances at a more reasonable rate.

Before you Decide

Think about networking opportunities, eg the various events run by Business Link, Chambers of Commerce, local authorities and others; would you benefit from attending these before making your decision about becoming a consultant? They may well give you an opportunity to discuss your planned route with other (non-competitor!) consultants, and to consider the possibilities open to you locally.

Think also about premises – is it sensible and practicable to work from home? Consider the possible disruption to family life, and conversely the effect of screaming children when you are concentrating, or trying to close a deal on the phone! Consider the insurance and capital gains tax issues that may arrive and think through any impact on your neighbourhood relationships if your business will attract visitors to your home office.

It’s a big decision to make – take time and lots of thought; take advice from people you trust. If you go ahead, enjoy every minute!

Chas Morrison
Adviser Team Manager
Business Link Hampshire and Isle of Wight

Tel: 0845 600 9006
info@businesslinksoutheast.co.uk

 www.businesslink.gov.uk/southeast