The dizzying speed of disruption due to the COVID-19 pandemic is leaving many people jobless or with a fear of losing their job, with few prospects to find a similar role in a quickly darkening economic climate. And this is just the beginning. Dealing with the coronavirus’s aftermath will be extremely challenging. These are the early days of a very bad, very painful recession. COVID-19 will likely end up far surpassing the financial crisis in economic damage. For some organizations and individuals, short-term survival is the only agenda item. So we are sharing this article with you, which is based one some of the training content from our new FIRMSconsulting Insider course, Replacing Income with Online-Only Freelance Consulting. If you are a business consultant or work in corporate and need to find a way to replace your income, this article is for you.
Here and in part 2, “10 Powerful Insights to Help You Succeed as a Small Business Consultant” we share enough information for you to start your online freelance consulting business to help you replace your income, and you can get more in-depth step-by-step guidance on how to freelance as a business consultant online when you become a FIRMSconsulting Insider. So let’s get into it.
The freelance consulting business model has changed
It’s much easier to do freelance consulting when you can go out and meet clients, network with people, arrive at a client’s office and do the work while sitting alongside a peer from the client. What happens when you are forced to work through the internet or over the telephone?
Hiring consultants online on dedicated online platforms was already taking away sales from traditional in-office professionals (small consulting firms, small marketing firms, small web development firms, etc.). What the COVID-19 has done is to accelerate a change in hiring habits.
And what we want to do in today’s article is to show you how to take advantage of this trend and replace, and thereafter surpass, the income you lost or may lose.
Understanding the current recruitment prospects for business consultants
We were talking to a client a few days ago, over email. And this lady was adamant that she should go ahead and apply to McKinsey London because she knows someone who, despite all the problems with the coronavirus, was able to get an offer. And we were trying to explain to her that this is likely career suicide. Just don’t do it. And she was telling us she knows someone who did it successfully so she is going to do it.
If you don’t understand basic statistics and probability theory you should hold off applying to a consulting firm anyway. Just because one person got in does not change your probability of getting in at a time when the entire economy is collapsing.
We will give you an analogy here. Imagine it’s a World War I and the machine gun has just entered warfare on a commercial and significant scale. And you a soldier in one of the armies, fighting Germany, and so on, and your superior is telling you, “Look, don’t worry if the Germans have machine guns. I know someone who got through on the other side and you can do it.”
You know that it is ludicrous to go into a situation where the majority is going to be gunned down even if you know one person that got through, because the odds stacked significantly against you. And when it comes to applying to major management consulting firms, once you are rejected it is on your record forever and makes any future chances to join that particular firm much smaller.
Of course, there is always going to be someone who got in now. That is why people forward such emails because someone getting in now is such an amazing miracle.
So when we see people forwarding us emails from colleagues and agencies encouraging them to apply because they have anecdotes of someone who got in during this difficult time, to us it is irresponsible, negligent, the worst kind of professionalism possible. When you encourage someone to do something, knowing full well that the odds of them being successful is practically zero, you are not helping them.
You are hurting them.
The odds of joining McKinsey, BCG, Bain, Deloitte, etc. right now are significantly against you
You have got to play the odds. The odds are significantly against you. And if you apply now, whether it is a consulting firm, whether it is another major company, the odds of you being successful are very low. So you can decide, do you want to spend all this time preparing for consulting case interviews, preparing for interviews for a marketing position, preparing for executive position interviews, knowing full well that the odds are against you?
You are likely going to waste a lot of time; preparing your resume, cover letter, applying, networking. In our opinion, it’s just not worth it.
So you got to play the odds here and the odds are very high that whatever skill you have, you probably can do freelance consulting and, unfortunately, you have to do freelance consulting online because of the environment we are in. You have to consider freelance consulting because it is the easiest way for people to hire you now as a business consultant.
In many cases, they are not going to hire a business consultant full time. But they are more likely to hire freelance business consultants. Because it is not full time, it is a contract position. It is the easiest path to income for you if you are a business consultant.
Online freelance consulting… is it for me?
For those of you wondering if online freelance consulting is for you, you have got to put your ego aside here. For one, the revenue numbers are not small. Below we are going to use a case study with an actual client whom we advised to do this in the last few months, and how he performed, to show you that the revenue and profit numbers are not small.
Many people are using this shutdown time as a vacation. That is the mentality you have to avoid. Don’t be reactive. You have to be proactive. You have to create a new path for yourself because your current path is either going to disappear or it already disappeared, but you just don’t know it yet.
If you are in consulting the retrenchments are going to be enormous. If you are in corporate it is going to be staggering. You cannot wait for someone to give you an opportunity. You have to create it.
If you are a business consultant and your previous channel to a client was through the firm, you have to create your own channel. So don’t be like those soldiers who did not take Hiram Stevens Maxim’s invention of 1884 seriously. (Maxim, the American-born British inventor, was the first person to develop a scalable, commercial machine gun that went on to create a lot of problems for the world thereafter.)
Play the odds and the odds are completely against you if you decide to apply full time for almost anything during a recession.
There always going to be stories of people who made it. You need to decide if you want to play those odds. But we are advising clients not to play those odds. Because you just going to end up wasting time and, more importantly, the time you waste means you going to run through your savings, you are going to become disillusioned, your family is going to become disappointed and you are going to have financial problems.
And by the time you actually get around to coming up with a real solution you going to be tired. So you might as well start now.
Freelance consulting online-only: a case study
There is a client we helped recently, in the last few months. Let’s call him Rajeev. And this is the advice we gave him a few months ago. And when he came to us he thought he would be retrenched. And he wanted to know what he should do if he was in a situation if he could not leave the house because his wife was not well medically.
How could he work if he could not leave the house? And he had many ideas of what he could do but we encouraged to explore a very different direction.
After our call Rajeev actually was retrenched. Very soon after we spoke. About 2 weeks after we spoke. But he followed the plan. Made some adjustments, which worked.
To be fair we are very proud of him because he did a lot of things on his own initiative. He took the guidance and went with it.
Ex-EY business consultant more than doubles his income
And Rajeev has, what we call, Indian grit; Indians from India who come to the United States and never complain. Just a pleasant guy who gets the job done. In his previous role, he was a business consultant in EY’s operations practice. Let’s say he was in the New Jersey office. It was somewhere in the Tri-State area. And he got laid-off. He was a senior consultant or equivalent. So not a very senior position.
A guy who has been there for about 6 years. Not really progressing rapidly. It’s not as if he was a star performer at EY and everyone was falling over themselves to hire this guy. He was a good business consultant. He got the job done. He was likable with good performance reviews.
Here is an interesting thing about the numbers. His salary when he left, we guess it was not more than $160,000, excluding bonus and benefits.
So it is an OK salary. A good salary if you are living in New Jersey. If you divide it by 12, and by 4, the numbers are not mouth-watering amazing, but they are OK. $3,333 maximum per week.
But using this new process that we will talk you though, his average billings as a business consultant, just working online, went up to $8,000 a week within a few weeks of starting to work for himself, which is basically profit because his costs are essentially zero.
All he does is he pays for his electricity bill, pays for his internet bill and he subscribes for a few services to help him run the business. But it is very small. His total cost for everything (internet, lighting and subscriptions) is probably sitting at maybe $300 a month. It’s not big. But he is doing $8,000 a week of billings which is pure profit.
Scaling up an online freelance consulting business: $500k in the first year
So you have got to think about it. He has more than doubled his salary doing online freelance consulting and it happened in a few weeks. Now the thing you have got to remember, while the numbers look good you also have to apply some realism here. He works pretty hard to generate $8,000 per week. So he can’t do it 52 weeks in a row. He will just burn out.
So one of the things we spoke about, which he is now putting in place, is he is not doing all the work anymore. He is now serving in a role where he is more in a front-end role engaging clients and he does quality control. But he is passing on work to other online freelance business consultants. He pays them a lower rate and he takes a fairly healthy chunk of it. So he is probably going to pull in $480,000 to $500,000 in his first year of doing this. And we think he has a lot of room to grow because as he brings more people to do the work he can expand his businesses.
He basically works alone. A typical two-bedroom apartment. His wife and him in one room, his office is in another room and his daughter, well we don’t know where she stays, maybe she stays with them in the same room. But she is very young so he can put her in a corner and she probably will be happy.
He works alone. His wife does all of the communication with clients. She is the one who bids for the work online. And she helps him with everything. She emails clients, she sends updates, she does all administrative staff which is actually pretty painful if you think about it. He just does the work, which is an important thing we will talk about.
Freelance consulting only in the area of financial modeling and excel work
Now in terms of numbers, it took less than a month to get to $8,000 per week of paid work. It took him about 3 weeks. He only does financial modeling and excel work. Nothing else. He does not do anything else. Only financial modeling and excel work.
It’s a good niche to be in because it’s a skill that people who hire online understand. They want to build a model and they want to check something, so they look for a financial modeler. One of the pieces of advice we gave him is to try not to do operations work, try not to do slides and so on.
Those are good things if you want to do it but you got to pick a niche and stick to it so you can build processes and systems that you can just continuously follow. If you do many different things the time to set up and change processes becomes a problem because you waste a lot of time.
Further expanding Rajeev’s online-only freelance consulting business
The next piece of advice we gave him is that he should now just be bidding for work and doing the work to build excel models. He must to do 2 things.
One avenue is you got to bid for the work, pass it off to other people which you find on the same platform but you do quality control and you take a cut.
The second thing we advised Rajeev to build are plugins that can fit into excel that people download. Which means he designs the plugin’s functions and he hires a web-developer to do it for him, but its very cheap. Rajeev writes out the macro and script and the web-developer converts it into the plugin. And the good news is every time someone downloads the plugin Rajeev gets paid.
But there is no additional labour cost involved in that. So here Rajeev is able to get a big chunk of revenue without doing anything except building a plugin and updating it every year.
So he doing well during his first year. He will pull about half a million. With a lot of room to grow with very little costs and overhead.
Becoming a self-employed business consultant
So what should you do now if you lost your job or about to lose your job?
The first step is surviving. Applying to McKinsey, BCG, Bain, Deloitte, etc. during this time is generally a bad idea for your career, unless you are one of the lucky few, and have a great resume. You want to now focus on surviving and not losing everything. Taking care of your family. Investing in your development and, very importantly, not to have resume gaps and not to have so many delays that by the time you realize your strategy of just applying for jobs is not going to work, it is too late.
So, step one is survival.
Step two is stabilization. Which is if you can build this online freelance consulting business, you can then get it to grow. Or you make a decision that it’s growing but you want to go back to work once things are back to normal.
And then step 3 is how do you thrive at this as someone who is running an online freelance consulting business? And, of course, the rest of FC training covers that.
“Replacing income with digital freelance consulting” course
In the course, we take you through how to set up your digital freelance consulting business. What to do, step by step.
So for those interested in starting an online-only freelance consulting business, above is the logic and overview to get you started. In the course, we focus more on how to do it, and how to be successful in doing it. We are spending time planning the steps. You are going to get some homework. You are going to go through it and do it. And then we focus on implementing it to get you up and running within a week.
If you do it right, you will work through all the episodes of the course. You spend one day, let’s say Saturday, working through the course. You prepare all your write ups and information on Saturday night and Sunday morning. And we want you to load it and go live by Sunday night.
If you tell us you need a week to do it, you are wasting time. Then its better if you dont even bother starting at all. If you need a week to do this, please stop now. Do it in 2 days. Do it in 1 day if you can. Work through the course in the morning, prepare from 1pm to 4pm, it does not take that long, load it by 6 pm and make your first bid. Its better to get out there and learn form your mistakes.
So what we are trying to do in this program is to show you what you can do, step by step, to rebuild a career that operates online in a knowledge economy. For most of you, whether you are a business consultant at a major firm like McKinsey or BCG, whether you are an executive, whether you are in marketing, whether you are a supply chain manager, when you get to this position in life without a quarantine and recession, you can still go out and try to become a business consultant to earn some money.
What we want to show you is you still can do that but you have to do that online.
And we going to give you practical steps to do this in this program. We don’t want to make you do something where the payoff is 6 months in the future. Where the payoff required building a brand new website costing you $10,000 or the payoff requires you to go do something you cannot do, like attend a conference or an event. We want to give you things that are practical. Below are some areas we address in the course.
Planning critical path
Developing a critical path to follow.
Picking a niche that is fairly large, using the language that the market understands.
Why is the process important? Documenting the process.
The reason most people fail to start and build an online freelance consulting business?
Which projects should you bid for?
What kind of demands online clients have?
The language you need to use to attract clients. What do clients want to know when they are considering you?
Which websites/platforms should you use to build your online freelance consulting business? Platforms we recommend to ignore.
Preparing your responses in a word document. How to quality check your responses.
How to model your profile.
Reviewing real profiles of ex-consultants (e.g. McKinsey), MBAs (e.g. Stanford, Yale) and more online. What did they do well and what needs improvement.
The key thing about your profile.
Profile photo. Dress code for your profile photo. Background to use.
Creating your profile together. Picking usernames. Selecting a service area and specialization as well as keywords and expertise level for your profile. What happens when you are picking your level (e.g. entry-level, intermediary, expert) and how it will impact your success on the platform?
Education, employment sections and languages.
Picking an hourly rate. What you need to bill to be seen as legitimate but not to lose out on opportunities.
Creating a portfolio of work.
Using the app from the platform.
Creating a system of documents and processes. Mapping everything. Creating templates. Collecting emails.
Scaling your online freelance consulting business.
Establishing the right mindset.
The reality of competing on cost. What should you charge in the beginning.
Per hour versus fixed-priced projects.
Creating processes. Documenting everything.
What should you bid for?
Following up with clients.
Replacing your pre-crisis income.
Working for yourself.
Staying in the game. Managing your ego.
Building an online freelance consulting business that not only replaces your income but gives you a great life.
How the collapsing economy is impacting consulting work.
Focusing on a narrow technical skill.
Committing to the process.
This article reflects our perspective as of April 19, 2020.
Succeeding as a Management Consultant
When people think about the business strategy we often think about the field of strategy consulting/management consulting and firms like McKinsey, BCG, et al. If you are interested in learning how to conduct a management consulting engagement, you will likely enjoy this book. Succeeding as a Management Consultant is a book set in the Brazilian interior. This book follows an engagement team as they assist Goldy, a large Brazilian gold miner, in diagnosing and fixing deep and persistent organizational issues. This book follows an engagement team over an 8-week assignment and explains how they successfully navigate a challenging client environment, develop hypotheses, build the analyses and provide the final recommendations. It is written so the reader may understand, follow and replicate the process. It is the only book laying out a consulting assignment step-by-step. (Published by FIRMSconsulting.) One of the best business books if you are interested in management consulting and strategy.
Marketing Saves the World, Bill Matassoni’s Memoir
Bill Matassoni’s (Ex-McKinsey and Ex-BCG Senior Partner)Marketing Saves The World is a truly unique book. Never before has a McKinsey partner published his memoir publicly. This book is a rare opportunity – a true exclusive – to see what shapes the thought process of a partner and learn about marketing and strategy. The memoir essentially lays out McKinsey’s competitive advantage and explains how it can be neutralized. (Published by FIRMSconsulting.) One of the best business books if you are interested in marketing, strategy, how McKinsey and BCG operate, and overall in management consulting.
The Mind of The Strategist, by Kenichi Ohmae
Bill Matassoni speaks highly of Kenichi Ohmae in his memoir Marketing Saves the World. He is one of a few people Bill calls “brilliant.” The Mind of The Strategistremains one of a few strategy books we recommend to understand how to think critically. Now you can read Bill’s memoir, a book about Bill’s mentor (Marvin Bower), and a book by one of Bill’s close colleagues at McKinsey (Kenichi Ohmae). Definitely, one of the best business books, especially if you are interested in management consulting and strategy.
The Innovator’s Dilemma, When New Technologies Cause Great Firms to Fail, by Clayton M. Christensen
One of the best business books of all time. The Innovator’s Dilemma – “By the nineties, most books on management were just rhetoric, but this book is the real deal. A well-researched classic,” says Bill Matassoni. Named one of 100 Leadership & Success Books to Read in a Lifetime by Amazon Editors. In his book, Clayton Christensen showcases how even the most outstanding organizations can do everything right and still lose market leadership.
WHAT IS NEXT? If you have any questions about our membership training programs (StrategyTV.com/Apps & StrategyTraining.com/Apps) do not hesitate to reach out to us at support @ firmsconsulting.com. You can also get access to selected episodes from our membership programs when you sign-up for our newsletter above or here. Continue developing your strategy skills.
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Case interview resume template used in The Consulting Offer. Offers from McKinsey, BCG, Bain et al.