The trend is accelerating. More and more professionals are quitting their corporate jobs and setting up as business consultants. We look at the reasons.
The Rise and Rise of the Independent Business Consultant
What began as a trickle during the financial crisis of 2008 has now become a flood, as the lure of setting up shop as an independent consultant is proving to be irresistible.
According to a WiseGuy industry report, the global business consulting services market is growing at a CAGR of 4.7 percent and will reach 183.2 billion US dollars by 2024.
Increasingly, the share of this lucrative market will be snatched by independent consultants and boutique firms, who will shape the future of the industry, says a LexisNexis industry report.
This will impact mainstream consulting firms, who may struggle to find and keep experienced talent, it warns.
What are the Attractions of Going it Alone as a Consultant?
There are a host of reasons why independent consultants are thriving. Let’s take a look at some of the more pertinent ones:
1) There is Plenty of Work to be Had
Gone are the days when big consulting companies such as Deloitte Consulting, PwC, KPMG, and EY, with their armies of consultants and high fees, would snap up the vast majority of the consulting work.
Many companies are now engaging lower-priced independent consultants for professional advice on niche segments of their businesses, such as human resources, taxation, strategy, operations, finance, and/or IT.
Independent consultants have become inextricably linked to many large companies, offering services ranging from defining strategic direction to serving as an extra pair of hands for outsourced work.
2) Independents can Fully Explore Their Own Potential
Of course, working for a large consultancy firm offers all the advantages of full-time employment, such as being part of a powerful team, being able to bounce new ideas off colleagues, water-cooler conversations, and, importantly, company benefits such as pension contributions, medical benefits, and paid leave.
But for the go-getting consultant, the need to escape the restrictions of corporate life and the drive to excel as an independent outweigh the need for financial security. After all, haven’t we all dreamed of working for ourselves, of being our own boss, of tackling work issues when we want to and how we want to?
3) Independent Consultants March to Their Own Beat
Remember when you missed your daughter’s birthday party because your boss made you work overtime? Remember being ordered to come into work on your scheduled day off because a colleague was taking a sickie?
Being an independent consultant offers maximum flexibility when it comes to working hours.
Despite this freedom, however, when all is said and done the work still has to be tackled—and the independent consultant may end up working through the night to ensure delivery of promised services.
4) Money, Money, Money
The bottom line for consultants who opt to go it alone is the expectation that somewhere down the line they will be better off financially than if they had stayed with a large, established consultancy.
Independent consultants can charge their clients lower rates than those commanded by the big firms, but all the earnings go directly to them.
According to the Wall Street Journal, independent consultants on average earn 20-40% more per hour than salaried employees doing the same work.
5) Lower Taxes
Independent consultants can usually benefit from a raft of business-related tax deductions that are not available to salaried employees.
These may include expenses related to running an office, even if working from home. Other tax breaks could include deductions for travel and entertainment expenses, and subscriptions for the Internet, cable TV, and magazines.
It may come as a surprise, but independent consultants usually cough up less for tax than do full-time employees earning similar wages.
6) Because Today’s Technology Makes it Possible
There was a time when consulting professionals needed to be part of large organisations, because of the need to access expensive IT platforms, which only the corporate giants could afford to procure and operate.
These days, though, there are so many apps available, allowing consultants to handle complicated tasks and projects on their own.
As a result, technology costs and expertise are no longer a barrier to setting up shop as one-man consulting business.
Consider the following tools, all of which are accessible and easy for any individual to use:
- Slack: A cloud-based instant messaging platform that that brings all your internal communications together into one platform.
- Yondo: A nifty tool that allows you to conduct one-on-one video or phone consultations with clients.
- Google Docs: A free online word-processing tool which allows any number of people access to a file so they can work on it individually in real time.
- BuzzSumo: This popular tool allows you to research content ideas based on keywords and backlinks.
- MailChimp: A marketing automation platform and email marketing service that is easy to use and which seamlessly organises contacts.
Are You Ready for the Challenge?
It is now more possible than ever for a consultant to launch out as an independent—and to thrive! I set up my Supply Chain and Logistics management consultancy more than 22 years ago and have learned a few tricks along the way.
If you are ready for the challenge of going-it-alone, maybe I can help you with a few shortcuts to get started?
I also have a free guide that may be of value to you. Download it here:
Seven Essential Steps to Starting a Consulting Business
I wish you the very best of luck with your bold, new venture!
Email or +61 417 417 307