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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
The Biz Question
My husband and I are thinking of starting a consulting service. He has 20 years exp. in his line of work and is very knowledgeable. We're just not sure how to go about starting. Can anyone give us any ideas or suggestions? I think we are just a little afraid to get started.
Answer from our Guest Expert Kent Capener of Capener Consulting
A little fear, at this point, is good if you and your husband channel it into thinking about what the transition will mean to you. Being "a little afraid" probably comes from not knowing what the future will hold as business owners, and that's okay. Nearly all entrepreneurs have those first move jitters! Usually at the top of the list is money concerns. There's something about leaving that every-pay-period-automatic feeding and fending for yourself that makes you think twice.
Some planning, however, can ease your mind and settle your nerves. Here are a few start-up suggestions to get you going in the right direction.
Are You a Generalist or a Specialist?
I don't know what your husband's "line of work" is, but choosing what type of consultant he wishes to be might be his first chore. There are generally two types of consultants. One is a generalist in fields or scientific disciplines, and the other is a specialist in a specific field or discipline.There's a smorgasbord of variations as well, depending on the experience of the consultant. If your husband is in a technical line or specific discipline, as I interpret your question, will he be a generalist or a specialist in his area of expertise?
The Dollar Diet Plan
If you make a financial plan for the transition into self-employment -- and you're successful getting your consultancy started -- it shouldn't be as bad as you might imagine. Be sure to consider:
- How much money do you need to continue your lifestyle? What's the potential to match or exceed that amount working for yourself?
- If necessary, can you go six months or a year without that pay period feeding and survive?
At the same time, have your financial plan consider what your potential income will be, and more importantly, who will write the checks. That's to say, think about who your customers will be, or who you want them to be. Many new consultants' first clients are often a past employer, a competitor, or a new player in the market.
In this corner of the biz kitchen, you're lucky to have some ample networking opportunities as well! All those experts who are more academic or industry-specific are like birds of a feather; they flock together! This opens up a whole banquet table of networking opportunities through associations, trade groups and professional certifications. Often, the people hiring consultants are upper middle management and lean more to the nuts and bolts side of businesses. Sometimes, however, these decision-makers are outside of the loop of the actual work. In either case, some brain-work here will help figure out your financial plan.
Where to Start?
Start with hubby's experience. After all, it's at the very core of your small business desires. To really start planning and taking the fear out of that first splash of cold, hard biz reality, pick his brain a little. Questions to fire at him could include:
- Who and what does he know about consulting in his line of work? Can he emulate them?
- What's the industry, and how do the members associate? Is there a trade group? Are there industry- specific trade shows? Are there industry-specific trade magazines? (These can be a great source of leads, as well as a way to build up your biz image.)
- What type of people does your husband like to deal with?
- What are his strengths and weaknesses? How can you capitalize on the strengths and neutralize his weaknesses?
- What kind of support and equipment will be necessary for your home or business office? How much will that cost?
- How much will you charge for your services?
Uncle Sam's Piece of the Pie
There may be some legal things you're required to do in your locality and state, such as obtaining a business license, professional certification, and worker's compensation insurance. These usually require fees, so be sure to research their costs for your financial plan. Go to your local library or city hall and research the regulations and requirements for your type of consulting business. If you plan to work out of your home, check into your local zoning ordinances regarding home businesses.
These government issues are just the tip of the iceberg, so get some extra help in your start-up searches. Go to a local Small Business Development Center or buy a good book on starting a small business to help you in your research. (See Idea Cafe's Biz Book Review section for helpful start-up titles.)
Prepare for the Social Switch
Don't overlook the impact your jump into self-employment will cause in your social life.This is especially true if you're planning a one-person (or two-person) business out of your home. If you and your husband's been working in an office setting for a while, remember, chit chat around the office water cooler will dry up instantly! If you'll both be working together in the new business, that opens up a whole new can of worms! Just think through how you'll adjust to the wonderful world of working together full-time.
My Two Cent's Worth
My home is my castle....and office! Quite frankly, I'd rebel at the thought of going back into a corporate environment after working at home and being a self-employed consultant. There's something wonderful about walking upstairs to go to work over getting in the car driving for miles to get to a stuffy office cubicle.
So, the key to making a successful transition from employee to self-employed is all in the planning. Consider the above elements and work your way through them. Hope this helps and best of luck to you both.
Kent Capener, Capener Consulting
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