Start Your Own Consulting Business, 4th Edition

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<ul><li><p>ContentsPreface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix</p><p>Chapter 1The Right Stuff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1</p><p>Taking the Plunge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Things to Consider . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Do You Have What It Takes? . . . . . . . . . . . . . . . . . . . 5</p><p>A Brief History of Consulting . . . . . . . . . . . . . . . . . . . . . 6The Top Consulting Businesses. . . . . . . . . . . . . . . . . . . . 8More Keys to Success. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Earnings Potential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10</p><p>Chapter 2Bringing Your Specialty to Market . . . . . . . . . . . . . . . 13</p><p>Whats Your Specialty? . . . . . . . . . . . . . . . . . . . . . . . . . 14Defining Your Market . . . . . . . . . . . . . . . . . . . . . . . . . . 17Writing a Marketing Plan . . . . . . . . . . . . . . . . . . . . . . . 18Finding Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21</p><p>Chapter 3Consulting Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25</p><p>A Day in the Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Providing Excellent Customer Service . . . . . . . . . . . . . 26Developing a Win-Win Style . . . . . . . . . . . . . . . . . . . . 28</p><p>Chapter 4Setting Up Shop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33</p></li><li><p>Home Alone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Location, Location, Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Its a Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Making It Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39The Name of the Game . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Paper Trail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42</p><p>Chapter 5Calling in the Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45</p><p>Legal Eagle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Bookmakers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Going for Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48</p><p>Getting Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49</p><p>Chapter 6Tools of the Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53</p><p>Office Furniture and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Personal Computer and Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Fax Machines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Landline Phone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Answering Machine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Cell Phone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56BlackBerry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57Toll-Free Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Copy Machine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Postage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59Office Supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61The Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62</p><p>Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65</p><p>Chapter 7Help Wanted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67</p><p>A Helping Hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68The Hiring Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70</p><p>Screening Applicants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71Partnering for Success. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71Anteing Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73Fringe Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74</p><p>vi</p><p>Star</p><p>t You</p><p>r Ow</p><p>n Co</p><p>nsul</p><p>ting </p><p>Busin</p><p>ess</p></li><li><p>Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74</p><p>Chapter 8Back to School . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77</p><p>Industry Associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Publications and Ezines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80For Further Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80</p><p>Chapter 9Getting the Word Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83</p><p>Direct Mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Identifying Your Target Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85</p><p>Cold Calls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87The Dark Side of Cold Calling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91</p><p>Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Newsletters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Referrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95</p><p>Chapter 10Meeting Your Public . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99</p><p>News Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Media Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102Public Speaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103Teaching a Workshop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Hitting the Lecture Circuit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105Networking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105When Things Go Wrong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107</p><p>Chapter 11Casting Your (Inter)net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109</p><p>Test the Waters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110By Design. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112Building Your Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113Naming Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115</p><p>Chapter 12Money Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123</p><p>Income and Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124Phone Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124Postage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125</p><p>Contents</p><p>vii</p></li><li><p>Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Fringe Benefits and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Office Supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131Magazine Subscriptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131Membership Dues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132Loan Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132Internet Service Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132Other Miscellaneous Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132</p><p>Financing Your Startup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133How Much Should You Charge? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134</p><p>Hourly Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135Project Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136Retainer Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136Bonus Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137</p><p>Billing and Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137Should You Accept Credit Cards? . . . . . . . . . . . . . . . . . . . . . . . . . . 138</p><p>Avoiding Cash Flow Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139</p><p>Chapter 13Writing Winning Contracts and Reports . . . . . . . . . . . . . . . . . . . . . 141</p><p>Contract Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142Setting Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144Types of Fee Structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144Going the Extra Mile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145The Fine Art of Negotiating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146Its the Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147</p><p>Reporting Your Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149</p><p>Appendix: Consulting Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161</p><p>Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173</p><p>Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 </p><p>viii</p><p>Star</p><p>t You</p><p>r Ow</p><p>n Co</p><p>nsul</p><p>ting </p><p>Busin</p><p>ess</p></li><li><p>The Right Stuff</p><p>1</p><p>What exactly is a consultant? Theword comes from the Latin word for to discuss, while the dic-</p><p>tionary defines consultant as an expert in a particular field</p><p>who works as an advisor either to a company or to another</p><p>individual. Sounds pretty vague, doesnt it? But interestingly</p><p>its that very vagueness that gives you the leeway to create a</p><p>consulting business thats exactly what you want it to be and</p><p>allows you to do precisely what you want to do. </p></li><li><p>Businesses certainly understand the value of consultants. According to estimatesby Plunkett Research, a provider of industry sector analysis and research, manage-ment, scientific, and technical consulting services generated more than $171 billionin revenues in the United States during 2012, while IBISWorld, a provider of indus-try information, reports that worldwide consulting revenues were $335 billion.</p><p>Thats a pretty good indication that the market is wide open for new consultantsin virtually every industry.</p><p>And theres more good news. The Bureau of Labor Statistics (BLS), U.S.Department of Labor, Occupational Outlook Handbook, reports that employment in themanagement analyst (aka consultant) field is expected to grow 22 percent through2020. </p><p>But why exactly are consultants in such high demand? First, companies under-stand the value consultants bring to their organizations by virtue of their experience,expertise, and knowledge. Second, consultants bring fresh ideas and a fresh perspec-tive to projects. And third, companies that have to lay off workers for economic rea-sons still need to get the work done despite their reduced labor pool.</p><p>Taking the PlungeFor their part, independent consultants have different motivations for taking theplunge into self-employment. Some of them are baby boomers who may have workedfor yearsor decadesfor one or more companies, and simply are ready for a careerthat will allow them to call the shots for a change. Others, like Bill Metten, a consult-ant in Delaware, have been laid off or downsized out of a job and decided to seek anew opportunity that will allow them to use the knowledge theyve acquired on thejob.</p><p>I was a senior executive for a chemical company when the industry went to potin the early 1990s, says Metten, who founded his public relations/customer serviceconsulting business in 1991. The company made me an offer I couldnt refuse, andsince I had long harbored the desire to have just a few clients and spoil the dickensout of them, I decided to take the plunge.</p><p>And still others, like Melinda Patrician, a public relations consultant in Arlington,Virginia, discovered that technology made it easier to work as a consultant from home. </p><p>The same technology that has helped me to be successful as a consultant hasmade it easier for others to do the same, Patrician says.</p><p>Simply put, a consultants job is to consult. It really is that simple. But whatseparates a good consultant from a bad consultant is a passion and drive for excel-lence. And of course, good consultants should be knowledgeable about the subjects</p><p>2</p><p>Start Your Own Consulting Business</p></li><li><p>theyre consulting in. You see, in thisday and age, anyone can be a consultantin pretty much any field or discipline,from management to wedding coordina-tion, academic course design, profes-sional image, interior design, and...</p></li></ul>

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