How do I transition from being a contracted staff member providing business development services to a freelance consultant?
I've been hired over and over again to come in to small businesses and help them reorganize and positioned for growth. I want to start consulting full time instead so I can help several clients at the same time. But I'm lost at starting my own business model as I'm unsure of how to price myself and what services to offer... And even if I can make enough money at it for it to be worth it. I'm looking for resources, a mentor, guidance, something.
There are a lot of pieces to this puzzle. You have been working in the business, and now you have to work on the business as well. I'd suggest that you go to score.org, enter your zip code and find the chapter nearest you. There are thousands of SCORE volunteers across the country who answer startup questions all of the time - legal structure, pricing, business development, etc. And your mentors can stick with you for the whole time you need them - all for FREE.
Hello Mandy , I going to Answer you from my personnel experience , I have made the same transition ,First of all you need to make good & strong reputation with people clients ,have your own data base , which you need when ever you take the decision to move out of your contracted staff. Are you sure of your self to be freelance consultant ,if yes - build your own data & personnel marketing issues -How to market your self to expected clients ,Once you start , for sure you try your level best to serve your clients efficiently .
You ask a really good question or two: "...lost at starting my own business model as I'm unsure of how to price myself and what services to offer." You really need to know that people want your services and if you don't know how or if they do, how can you sell them to others. Business development has many parts and pieces. You might want to go back to USP or Rosser Reeves' Unique Selling Proposition or Selling Point. How will your skills be different and differentiated? Unfortunately if you don't know what skills then how do you know how to price them. You need to do some market and marketing research on yourself first. Hope that helps. All the best. The longest journey starts with the first step... and you're taking it.
Mandy develop a plan. Begin with what you want to make for the year and back into what you need to make monthly in order to achieve that goal. Then based on what others are currently charging for that service in your geographic area, determine how many clients you would need to meet your goal. Also do an audit of your personal financial assets and liabilities to determine how long you can take care of the essentials while you are building your business. Then decide when and if now is the right time for you to make your move. I hope this helps.
1) Create a 4-block matrix (for your eyes only) that separates and identifies your personal strengths, weaknesses opportunities and threats.
2) Repeat step one for a SWOT that represents what you have collectively found with your previous consultancy engagements (can share this as the beginning of a strategy and plan with potential new clients).
3) Overlay the two SWOT's and variably price your hourly rate in line with what solution strengths you bring to an engagement.
4) Make sure the rates or flat fees you choose are in line with benchmark pricing from other consultants with the same strengths and in the same geographic area(s).
There are usually small business centers at your local community college who can offer assistance in setting up your small business. Also there is a site for freelancers, www.elance.com
Congratulations on starting you own busines! It takes a lot of courage to do so.
Just like any new business owner, you need to gather your team. You will need a business attorney, accountant, insurance broker, banker and probably a few other people. I completely disagree with Ms. Gad below. If you cannot afford to hire a business attorney, you really cannot afford to go into business at this time. Doing so will save you a lot of headaches and money in the future.
You should also seek out mentors who you can trust. They will help you avoid some mistakes. That said, you are going to make lots of mistakes, so budget for them.
Feel free to contact me directly, and I would be happy to answer some of your questions.
This is a question I have been asked many times. The first thing you need to do is develop your unique value proposition based upon what you have already done successfully as you have described. Only concentrate on one thing - reorganizing, planning, brand building, etc. Then you need to develop testimonials from the clients you have already helped. Lastly, to calculate fees you need to calculate how much money you need to survive on an annual basis and then divide that number by 150 (the number of days you actually have to consult in a year) and that will give you your daily fee. The question then becomes can you market your consulting services for that daily fee? To earn $100,000 you need to charge about $675/day. Let me know if I can be more helpful?
2 Top Resources: Alan Weiss & Peter Block - either can help you start a consulting business and both have books with all the pieces of the puzzle put together. I prefer Alan Weiss who also has a mentoring program.
Also, be careful about your target market. When you say small businesses, you want to make sure you help people with money ("small business" can be a bit un-nerving). That being said, I hope your work translates well with larger firms - or you'll do a load of work for little companies, for little dollars.
Final thought - try to focus on project-pricing. If you work by the hour, you're a contractor, not a consultant. Others here might disagree with that. I'll fight over this one, all day long. And the reasons are too numerous to get into now.
Your question has the answer. You have been hired "over and over" to do the job.
Take an average of the benefits (salary, options, health, etc) and figure out the equivalent billable. In the same way you were hired by those companies go after new ones under the concept. I will caution you that by taking on the sales role and the fulfillment you may stretch yourself to thin and might consider a partner or outsource solutions.
The first thing to do is drop the word 'freelance'. I has an amateurish sense about it. You are a business consultant. You own a business and your product is your knowledge and expertise. Approach your potential clients as a solution provider not as an hourly outsource. Position yourself as their equal and they will pay you what you're worth. Set your business as a business. Take yourself seriously.
I'm am exactly in the same position. I started with registering as a sole proprietor, putting together a company resume, company business card, and social networking. Pricing is definitely hard to locate for this type of work... I waiver between payment by hour and payment by project. If requirements are clear I will do payment by project. You also need a contract of some sort.... still haven't got that together... and then hit the ground and network! You are your own sales person unless you hire an agency.
I was also in that position - working full time and wanting to start my own business.
I found the most effective way to do this is to start going to local business networking events after work.
Start talking to people about how you can help them. Set up your profile on LinkedIn and here on Mosaic Hub to reflect what your services are.
Be of service to people by answering their questions here on MosaicHub, LinkedIn groups and you can also sign up with HARO -HelpAReporterOut.com and answer questions there.
That will get your name out as an authority in your niche.
I would also set up and use other social media sites such as Google+, Facebook, etc to attract new clients to your business.
Pricing is tricky. If you have hard costs for your service then take those costs and multiply by 4x (at least)
If your costs are just your time, then look at your current employer and see how they structure this and mimic that cost structure to start out.
You can tell people that your current pricing is discounted and you will be raising your prices in the near future.
I agree with Attila you have to look at all of your costs in order to be successful.
I also think checking your agreements with your current employer is essential.
First and foremost, put together a business plan. Find a free template online.
Beginning a business can be overwhelming, which seems contradictory when you are starting a business to help people with their growth. I know because I've been there also. Here are a couple things to consider:
1. You need to take care of a few legal considerations, registering your name, deciding how to incorporate, getting contracts in place. I'm sure one of the legal advisers on the site can help with this part of the process, but you do need to think about it.
2. You need to establish your brand. This is your logo, color scheme, messaging, web site, etc. There are ways to do some of this on a shoestring, but the trade-off is your time. I found the best investment here was with a graphic designer to help with my logo and a web developer to build a basic site. I did both after creating my own logo and site and if I had a 'do over', I would have done this from the beginning.
3. Pricing is the toughest and Attila gave you some great advice here. I under bid my first few jobs but got better with this over time. The best thing I can tell you is never trade time for money! Bid on a project basis so that you can build in your marketing and administrative costs. I also like to multiple pricing options to prospects, based on the scope of the project.
4. Once you have these areas nailed down, you can start marketing. But don't take too long. The biggest challenge of being a solo entrepreneur is balancing the time you spend working on your business with the time you spend working in it, helping your clients. Get help. Have good resources that you can subcontract smaller jobs to so you can free up your time to keep marketing.
Mandy, owning your own business is a lot of hard work, especially in the beginning and there are no guarantees of success. However, once you get things going, there is no greater reward.
Now, I have a question for you. I've been considering formalizing a training workshop (on line) to help people in your situation work through these areas. As someone just starting out, do you think this would be helpful to you?
Good luck and much success!
I think it is a great idea. First I list couple of things for further consideration before pricing.
When you run your own business you will spend 30-50% of your time on sales and marketing depending how well you can build your platform and how automated your process is. 5-10% on administration and the rest will be consulting / project work.
It seems you have a steady income at the moment, so you could try and start building your “new life” in parallel. BUT first check your current contract for any conflict of interest/ non-compete clause.
Then you can start defining your target customers, a.k.a your niche and your products.
You can find further links and resources on my site: