Should I Start My Own Consulting Business?
Wouldn't it be nice to start your own consulting business?
No more unreasonable bosses, meetings you really don't want to be involved in, or working with people you don't necessarily enjoy working with. Most of us have thought about it at one time or another and some of us have actually made it happen.
For some people, entrepreneurship and business ownership is the right move and professionally and personally rewarding. For others, it just might not be the right fit.
Leaving the conventional workforce to start your own business is truly a difficult decision and one that should be carefully considered. Here are a few key questions you should ask yourself before making the leap.
What is your primary motivation for starting your own business?
Do you truly have the entrepreneurial spirit or are you displeased with your job, career progress, or work environment? Don't take this question lightly. The truth may be that you are simply unhappy in your current business situation, which means you should be looking for a new position or employer versus going off on your own.
Starting up and sustaining your own business is a 24/7 job and your passion for making it work will keep you going through some very long days. It requires a 100 percent commitment.
Can you really afford it?
A weak financial position is usually the first potential show stopper. How long can you live without a steady paycheck? It can takes months to years to start up and establish a profitable consulting practice and during that timeframe, your paychecks may be few and far between.
Realistically, you should be able to go at least a year without a substantial income. Also, carefully consider the benefits you will be losing from your current employer: health and life insurance contributions, retirement fund contributions, bonuses, and paid vacations. You most likely will need to invest in personal disability insurance as well. Financial factors will make or break you early on. Make sure you understand the financial picture.
Are you socially prepared?
In the beginning, most consultants work out of a home office to keep overhead down and minimize start-up costs. That means no more water cooler chats, conversations in the break room, and lunches with colleagues.
How important are these social interactions to you? In comparison, life in the home office can be isolating and most of your human interactions will be by e-mail and the telephone. When you look out your office window and see that the lawn needs mowing, do you have the self-discipline to close the window blinds and make that next sales call instead?
How strong is your support network?
While you might be a gifted mechanical engineer, you most likely are new to business management. You will need to collaborate with others to succeed in other aspects of your business-legal, finance, marketing, and sales.
You are going to need a lot of help. Do you have trusted business contacts? Who is going to help you create your professional corporate identity-your logo, letterhead, a website, your first brochure, and the like? You'll need expert accounting advice. Those contacts should all be in place before you take your first step out the door.
Do you have that first client in your back pocket?
In an ideal world, you will have your first client lined up and have had serious business conversations with other prospects before you go off on your own. If it is possible to work at night and weekends on your new venture while you are still employed, take the opportunity.
Keep in mind that finding a new client is not easy. When you are not doing engineering work for a client, you'll be prospecting for new business. Once you've found a prospect, you'll develop a proposal, present it, and attempt to land a new contract. And just because you've made it that far, you are not assured of gaining the job. Selling and developing new business is a time-consuming process but critical to your long-term success.
Starting your own consulting business is not easy. However, if you decide to take the leap and succeed, you'll find it to be a truly rewarding experience.
Tom Ricci is the owner of Ricci Communications.
Leaving the conventional workforce to start your own business is truly a difficult decision and one that should be carefully considered.