Private Consulting: Find Your Niche

What is the quickest growing business in America today? Consulting. Not only are there more small businesses than ever in American history forming, but an ever increasing number of those businesses are that of private consultants. Why is this? Is it the Obama economic plan? Has government developed these “new” jobs as is so often the claim? I think I speak for most of you when I say the response is, “Obviously not.” The new consulting businesses popping up around the country are a direct outcome of corporate downsizing and the difficulty in securing professional employment. As major corporations are downsizing on technocrats including engineers, human resource professionals, and MBAs, Vistage-style consulting firms are bred from the suffocating corporate carcasses like a Phoenix rising up from the ashes.

There are three explanations why these professionals, all of a sudden unemployed, become consultants:

  1. They’re experts with technical skills and talents. They’re too proud to work at McDonald’s, Wal-Mart, or collect food stamps from Mother Government. The case for motion for starting their own business hit like a sludge hammer on a rusty nail when they were laid off.
  2. Other big corporations, long the symbol of corporate standing and security, are downsizing too. There just aren’t as many professional jobs in corporations. But the work still needs to be done, so the big boys are outsourcing. This shift in the technical marketplace has lit up light bulbs over the heads of thousands in the recent 5 years.
  3. They aren’t good enough to make a living playing pro golf.

Are all these companies going to obtain success in lobbying for the seeds spread by Microsoft, Facebook, and General Electric? Well … No. There are still critical business success factors which need to be demonstrated by these new S-corps. As I own and run my own small business growth consulting firm, here are some of my own poignant reflections and tips for getting started in this hot industry.

But Why?

If you wish to make a living as a business advisor, you first must find a more enabling “Why?” than the 3 reasons I just offered. Being driven into a career switch is generally not the ideal way to assure lasting success. But don’t lose heart, even if that’s how you began, you can rapidly come to realize other, more powerful reasons for being your own employer, like:

  1. Self-Employment. Set your own hours and take vacations when YOU want to.
  2. Freedom to plunge into any niche market that intrigues YOU. Your interest and passion are key motivators when times are tough.
  3. Retire when YOU want to. This isn’t dictated by a corporate scheme.
  4. Establish your own salary. You never again have to grumble that you’re worth more than you earn. As a consultant, you’re worth exactly what you make!
  5. Your job is as safe as you make it.
  6. You do business where you want. Home, office, or villa in the south of France.

As soon as a consulting business is underway, these justifications must be convincing enough to push the directors through the hard times, documentation, and trivialities that your own business will surely bring.

The next thing that prospective consultants have to do to accomplish professional success is to define the span of the business. The means to do this is to first take stock of yourself and any workers that you may have. What are your technical strong points? Weak points? Interests? The parameters of the services that are provided should play on the technical strengths and hobbies of the consultants and steer clear of the weak spots like the plague. You may ask, “Why is that necessary?” to which the answer is, the best way to use a life preserver is to never get in water over your head. Sticking with your strengths prevents drowning. Clients and Competition You’re excited about starting this company! You know what you want to consult on! What next? Before making the leap, it’s a great idea to know and be able to define 3 things:

  1. Is there a niche for my services? Who will my clients be?
  2. Who else does what I do? In other words, who is the competition?
  3. Why am I superior to those folks in number 2?

If you are offering spectacular vistas of the sunset from your eastern facing terrace, you’ve got a problem! If there is no market for your services, quit for now, flip some burgers to pay the bills, and re-think it. If there is, you’re not out of the woods yet. Someone else may do what you do. In fact, maybe a lot of people do what you want to do. If that’s the case, you’re going to have to permeate their market, because unless you get exceptionally lucky and catch a consumer on a good day, you’ll probably have to take somebody else’s business, which means you better have a powerful good response for number 3 … Why you’re company is unique and more importantly, offers more worth to your client!

My wife sold long distance for about a year and got out of the business. She told me that it is one of the most competitive industries to be in. Why? Because everybody has a telephone, and 99.9 % of those people have long distance service. It takes one hell of a sales pitch to make someone want to swap something that most of them are at ease with, especially in the 30 seconds you’ll probably have before they hang up! Think Energy Choice for another illustration. Telling them why you’re better necessitates creating recognition of a problem that the prospective client may not even know they have. This is the most crucial factor in making a living consulting! You can be the finest engineer, accountant, or paralegal that there is, but if you can’t plainly explain what sets you apart from all the rest, then practice this, “Hello. Welcome to Wal-Mart. Have a good day!”

The Many Hats You’ll Wear

Without covering the entire field of “Consulting for Beginners”, the final thing a determined young, or old for that matter, consultant needs to be is fashion aware. Unless you happen to have bankrolled six figures of seed money for your business, you are going to have to wear a lot of hats, and if some of them happen to mismatch with the rest of the outfit, it will be the ultimate business faux paus. For example, as an engineer at IBM, my typical day may have revolved around the marching orders of running printed circuit peel tests, resolving a processing problem on line number 3, and going to a status meeting to present to my management when I’m going to finish the new inspection machine. Intriguing stuff, I know, but as complicated or not as this may sound, these duties are fairly restricted in scope if not technical complexity. They’re all engineering duties!

For my consulting business, I have to juggle a lot more eggs, and if one hits the ground, “Splat!” A partial list of some of the “hats” that I, and most start up consultants, must wear are those of the…

  • tax accountant,
  • salesperson,
  • receptionist,
  • trash collector,
  • shipping and receiving agent,
  • personnel manager,
  • purchasing representative,
  • accounts payable and receivable clerk,
  • travel agent,
  • customer service agent

Eventually, many of these functions can be passed on or farmed out, but until the company has a full plate of clients to feast on, these tasks normally fall on YOU.

There are many other avenues of expert consulting that I could explore with you, but that would take multiple days and I’d have to charge you ten thousand dollars for my time. Suffice it to say that if you believe you might want to join the ranks of us consultants, make sure you want it for the correct reasons, that you know exactly what it is you want to consult on, you know your niche and your market knows you, and do your calisthenics, because you will need to have Gumby-like versatility to do it.

Karl Walinskas

Karl Walinskas is the CEO of Smart Company Growth and author of the Smart Blog and Getting Connected Through Exceptional Leadership.He can be reached at [email protected]

Comments

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  2. ranjankseo says:

    Great thought behind this post and of course freedom like this is the most important part of not only life but of the business.

  3. Find our Niche is important our life!

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  6. vijinajairaj says:

    Thanks for sharing your real life experience in doing a business.

  7. mmcsysteminc says:

    Greate Post Karl walinskas thanks for sharing.. i really enjoyed a lot.. good to see about usage of consultancies in day-today life.. Its really a good one..
     
    Sowrabh Sharma “Sab”