My wife is always trying to get me to do some consulting, but I just can’t see the point.
I used to do a bit of consulting, but I saw it as a capital-friendly business development opportunity:
Rather than pay to fly out to talk to people about my regular products or services, I repackaged my bus. dev. [read: sales] activities as a paid consulting gig (at the very least, business-class international travel and accomodation paid for).
It worked quite well and was quite nice while it lasted.
Now, my wife sees consulting as a way to get a paid holiday every now and then …
… but, I see it largely as a waste of time.
I also see it as largely a waste of time for those who aspire to consult as their major source of income:
I feel that the biggest mistake that aspiring consultants make (particularly those setting up as an independent consultant/speaker) is to OVER-ESTIMATE their earning potential.
I once posted about a friend of mine, having sold out of his own business, who decided to become a consultant to his particular industry … his earning expectation is $200k for his second year in the business.
I told him “it won’t happen” …
Why?
You have to apply the ‘smell test’ to these sorts of expectations … wouldn’t EVERYBODY leave their $100k a year jobs if you could suddenly earn twice as much as a consultant?
… and, what about ‘lost time’ for marketing yourself, vacations, illness, accounting and business admin.?
Clearly, you have to build up to this (find a unique niche, build a reputation, etc. etc.) and that takes time … a lot of it.
For example, a top sales consultant in Australia recently said that he still spends at least two to three days a week in sales i.e. drumming up new business. Let’s assume that that time includes all of his admin., as well.
That means that he is spending a maximum of 2.5 days per week billing clients for face-to-face time less any unbooked time, travel time, research time, report-writing time, etc., etc.
You may be able to earn $1k+ per day, but I doubt that you can keep that up for 220 working days per year …
You do the math!
Sounds about right.
Being a consultant sounds a bit like being a full time writer – there is no shortage of them and only a very small minority do pretty well, a few scrape by and the majority struggle to recoup the value of the time they spend on it.
Separately, in terms of 7m7y themes – where is the leverage?
“where is the leverage?”
@ traineeinvestor – that’s a v good question. Ironically, this is where consulting has a value.
Let’s say that you have a FT job and PT business … you may be able to flip this around by quitting your job, supplementing with PT consulting to lever (not strictly leverage) yourself INTO the world of business rather than employment.
Exactly.
The consulting practice can be used to feed other business income streams that don’t depend solely on the hours you work:
– books
– training classes (recorded)
In fact, didn’t you say that you should become an expert? Having a successful consulting gig is certainly a move in the right direction.