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10 insights to succeed as a small business consultant-310 Powerful Insights to Help You Succeed as a Small Business Consultant

In the previous article “Freelance Consulting Online: a Step-By-Step Guide” we shared enough information for you to start your online freelance consulting business to help you replace your income if you lost your job or about to lose your job during current challenging economic times. If you have not read that article, please start there. In this article, we take it a step further and discuss 10 insights you need to succeed as a small business consultant. But first let’s briefly speak about what is happening with the global economy and how it is impacting consulting work and recruitment prospects with major consulting firms.

What is happening with the global economy?

For those of you wondering why you should consider following this online-only freelance consulting path, we will explain what is happening in the world because for many of you you were not yet working during the 2008 recession. You do not know how bad it was.

This recession will likely be much worse. The thing is people are not working. You know this. You walk out, restaurants are shut down. You go anywhere and there is nothing happening. There are a few restaurants that are open but mostly within hotels. Almost everything else is closed.

If people are not working, they are not producing something and they are not serving customers. If you don’t produce something you can’t sell it because you have nothing to sell. If you don’t serve people you can’t get paid, so there is less revenue.

If a company is taking in less revenue it must cut cost and reprioritize. It’s a fact of life. It is going to cut costs and reprioritize by shutting divisions, firing employees, call it whatever you want rightsizing, retrenching, getting rid of people, etc.

Business consultants will be hit very, very hard. Expect a lot of retrenchments at consulting firms. Expect massive hiring freezes. This is a reality. It is not possible for consulting firms to not take a sizable hit.

collapsing economy business consultant recession 2020 recession 2021

This is not going to be over fast

So if you think this is going to be over fast, you will apply for a new job, and things will get back to normal… We wish it was the case. When shutdown is over it’s going to be very bad for maybe a year or two. And you have to get ahead of it now and do something that is going to work versus hoping that things going to get better.

It may last for 3 to 5 years for professionals.

Can you find a job as a business consultant at a major firm?

In terms of new jobs, yes consulting firms will be hiring some people. Specifically, in areas like operations, turnarounds, restructurings etc, and will always hire at the elite business schools. But in terms of the percentage they are hiring versus the percentage that is applying that ratio has just gone down significantly. If the ratio before was they hire 5% of those that apply, it now has gone down to 0.5%.

So yes, you always going to hear examples of the firms hiring but the question is what is your probability and your probability is much lower. And the question you have to ask yourself is whether you can be one of those lucky people who gets hired. The net trend is negative.

Dealing with isolation

The second thing you need to know is you are isolated. There is a quarantine to some degree everywhere in the world. You are at home. Almost every one of you reading this, you going to be at home and you going to be at home for a long, long time. The social signals, social cues and the social routines that typify professional services like a handshake, like networking, like traveling, like being able to see a client and come home and not infect your family, being able to meet people, those are all gone.

So a lot of business consultants are just thinking I am going to do freelance consulting by myself. No, you are not. And you have to accept that. You have to accept that there is a different business model required now.

Previously you had a full salary, you had a physical presence with clients whereby you meet clients, you bill clients hourly and you get paid from your employer. But how can you make money when you cannot work at a major firm because no one is hiring?

So the net effect is that you going to be retrenched or see a dramatic salary cut, or feel some kind of financial pain. Little hiring and almost no chance to interview. You are stuck at home. Costs are going to go up and your revenue is going to go down. You literally only have one connection with the world. The internet. So you better pay your electricity bill and pay your internet bill.

Succeeding as an Online-Only Small Business Consultant

So, if you are a business consultant and your previous channel to a client was through the firm, which you lost or about to lose, you have to create your own channel. Play the odds and the odds are completely against you if you decide to apply for almost any full time role during this difficult economic times.

But the good news is you have skills for which there is demand. As a business consultant, as long as you can help businesses create more value than what they pay you, there will be demand for your services.

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 and part 1 we posted earlier is to show you how to take advantage of this trend and replace, and thereafter surpass, the income you lost or may lose.

Economics of Online Freelance Consulting – 10 Insights that Determine the Success of a Self-Employed Small Business Consultant

So, let’s talk briefly through the economics of on online freelance consulting business and what are the insights that determine the success of a self-employed online-only small business consultant.

small business consultant freelance consulting

Small business consultant success: insight #1 – start winning quickly and keep building

The first thing you need to keep in mind is this is a winner take all economy. Online means that you have to put yourself onto a platform somewhere to promote yourself and show your skills. But when you put yourself onto that platform it’s very easy for prospective buyers to see all other small business consultants on the platform.

And what happens is the small business consultants who have the best profiles, the best ratings, the best reviews, the best write-ups of their profiles, the best photos, they command the majority of the revenue because it’s very easy for customers to fire you and switch to them. This is what we call a winner take all economy.

Where the person who is very successful captures the biggest share of the economy. And we also call it the platform effect.

Whenever you promote yourself on a platform, whenever that platform standardizes the way your profile is presented so it makes it easy for people to shop for the best small business consultant, the most adaptable person, the small business consultant with best reviews, best profile write up, best photo, best completion track record, usually wins.

The “best” person wins and its a snowball effect. So you have to start winning quickly and keep building. That is very important.

Small business consultant success: insight #2 – bite-size niche work for smaller clients

Insight two as it relates to becoming a successful online small business consultant is you want to go for bite-size niche work for smaller clients. If you are thinking, “Let me source a $10,000 or $20,000 contract,” it is always possible, but it is very unlikely. What you want is small pieces of work for niche subjects for smaller clients.

So you want to do something like an excel review in the niche work of financial modeling for a tourism company. It is bite-size because maybe it is two days or 1 day worth of work. It is a niche because you are just doing financial modeling and it’s a smaller client.

If you try going after big pieces of work the issue is not that you will not get it. Because of the way the digital economy works with reviews, that we talk about in the course (see more on that below), you will not be successful in creating a good small business consultant profile for yourself. And if you do not create a good profile for yourself in a winner take all economy where every buyer can compare small business consultants’ profiles, you will lose.

So pursue bite-size niche work. It’s not just because it is easy to do, it’s because of the way internet works that you need to focus here.

Small business consultant success: insight #3 – learn to manage a volume business

If you are thinking you can do 10 projects and earn everything you want, no. This is going to be a volume business which means when you are taking on a lot of volume you have to manage your scope very carefully.

Because if you take on 30 projects and you let scope go wildly out of control, you cannot manage things, you fall behind and you get bad reviews from clients. And when you get bad reviews from a client on a platform where every buyer can compare the reviews of all potential small business consultants, you suffer.

So this is a volume business which means you must control the scope closely. This means you must do work which you know how to do. If you don’t know how to do something and you mess up with the client they may burn you with a bad review.

Even if you do the work correctly there are some bad clients who will say bad things about you. So you have to control the work carefully. Its a volume business. Know what you are doing. Don’t take things you cannot do.

Small business consultant success: insight #4 – be good at managing isolated work

The 4th insight about running an online freelance consulting business, it is isolated work. You work alone, usually in your home office, on a laptop, on a desktop, and you need to expect it. It’s not about meeting clients. You will likely never meet clients. You may never speak to a client physically. You may not even speak to them on the telephone. You need to be prepared for that.

recession 2020 business consultant freelance consulting

Small business consultant success: insight #5 – understanding the margins

Another important small business consultant success factor is understanding how margins work in this business model. The margins are going to be low, but as a function of geography. Here is what we mean by that. Let’s assume you are bidding with someone from India. Let’s assume you live in New Canaan Connecticut and you are competing with someone in Bangalore India to do an excel model.

Because you are living in New Canaan Connecticut your cost of living is much higher, which means you generally have to charge more to cover your cost. The person living in Bangalore India his cost of living is much less so he has to charge a lot less to cover his cost.

But the reality is that if you do the same quality of work and charge the same price, being based in New Canaan you will make much less money.

Here is the thing you have to understand. Most clients don’t care that you picked to live in New Canaan. They just don’t care. So if you picked an expensive place to live why should they care that they have to pay you extra not because your quality is better but just because it is required to cover your cost of living?

So sometimes you have to be willing to burn yourself in terms of the fee you charge, knowing you are taking a loss, just to do some work and get a review. Because reviews are very important in the online market place. But don’t go out there and say” Well, I am going to charge so much because I live in Massachusetts and I need to cover my cost.” It’s not the client’s problem.

You live in an expensive place. That is the decision you made. But unless you can show the value you bring don’t charge more.

Small business consultant success: insight #6 – managing competition

The 6th insight about running an online-only freelance consulting business is there is going to be excessive competition. How do you differentiate yourself? There are many ways to do it. Once you get a client we find the best way to differentiate yourself is through superior customer service and quality of work. Email when you say you will email, respond when you say you will respond. Be available. Sometimes when you cannot work at a certain time and the client emails, you should respond to the client with something along the lines of, “Thank you for your time. I am busy at the moment. I will respond the next day.”

Be courteous. Keep deadlines. Tell a client if you will miss a deadline.

Try to deliver when you say you will deliver. And go above and beyond to deliver tangible value to clients. Do more than what is expected of you.

So don’t just think you are competing on price. Initially, you are. But once you get a client you can keep a client through superior customer service as well as exceptional work quality and adherence to deadlines. We talk about it in more detail in the course as well (see more details below).

Small business consultant success: insight #7 – be ready for a burning period

Another important small business consultant success factor is being able and ready to manage a burning period. A burning period is what we call a period when you want to get those 10 reviews, or 12 reviews, or 20 reviews. Whatever that number is. But the burning period is you have to do things at a loss at times, knowing you want a review.

And what a lot of people do is they are just not willing to do things for a loss because they think the goal of these 10 projects is to make a profit.

It’s not.

It’s to maybe make a profit but the ultimate goal is to get very good reviews. Because again, as in the first insight, the winner takes all economy exists on a platform, a system where buyers can compare everyone at the platform. So there will be a burning period. Expect that. Don’t worry about profits. Look at it as paying your dues.

Small business consultant success: insight #8 – reviews really matter

Insight number 8th about running an online-only freelance consulting business is it is largely driven by reviews. No matter what happens if someone sees you have 100% 5 star ratings, it means 100% of people gave you the maximum score. It is much more likely someone is going to take a chance in hiring you.

If you have anything below 90 percent, does not matter whose fault it is, it looks bad. People have much less trust to give you their crucial projects since quite a few of your clients are not perfectly happy with the outcome of your work.

So getting reviews is important, keeping reviews is important and getting more reviews is important.

It’s also about taking the work you can do. If you take work you cannot do and you spend a lot of time working, a client going to give you a negative review even if you choose not to bill them. They may say, “You wasted my time. So what if you are not billing me. This was urgent. I asked you to do it. You promised. Now it’s late. I have to find someone else.”

They going to give you a negative review. A lot of people think just because you give someone a refund you fixed it all. No, if the client’s time was wasted, if they lost sales because of you, they will not be happy. Since this is driven by reviews you must focus on reviews.

Small business consultant success: insight #9 – this is price-sensitive

Another important small business consultant success factor is ability to navigate a price-sensitive market. In an online market, it gets vicious fast and you are going to compete on price. Initially, you are going to compete on price to a large degree.

But as you can see with that example of Ranjeev (a case study of a successful small business consultant who more than doubled his income in about 3 weeks after he lost his EY job, covered in more detail in the course), you can very quickly scale up to a point where you have many ongoing clients, you are not competing on price and you are making a very good income that is much more than what you were making before. And you do it on your own terms.

Small business consultant success: insight #10 – don’t overshoot the audience technically

The final insight into running an online-only freelance consulting business, and this is very important if you are a small business consultant, is don’t overshoot the audience technically. The audience that is buying from you online is usually not that sophisticated. They generally don’t understand things like options based pricing strategy or agile strategy, or hypotheses. Maybe they do, but it is very unlikely.

You must know the language your audience is going to speak and speak that language. This is very important. Because if you speak in a language they don’t understand, and your profile is written in a language they don’t understand, they don’t know you are good at what they are looking for. Audience online tends to be less worried about terminology, the latest fads, and the latest trends.

replacing income with online freelance consulting in a recession

“Replacing income with digital freelance consulting” course

If you found this article helpful, you will benefit from our “Replace your income with an online-only freelance consulting business” 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.
  • Getting reviews.
  • 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.
  • Location.
  • 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.

Implementation

  • 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.
  • Managing contracts.
  • What should you bid for?
  • Following up with clients.
  • Two-part strategy.
  • 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. 

Recommended books:

Best Business Books Like Blue Ocean StrategySucceeding 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. This book will be very useful as well if you are a small business consultant.

Best Business Books Like Blue Ocean Strategy marketing saves the world strategicMarketing 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. This book will be very helpful if you are a small business consultant.

Best Business Books Like Blue Ocean StrategyThe 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 Strategist remains 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.

Best Business Books Like Blue Ocean Strategy The Innovator's DilemmaThe 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.

Cheers, Kris

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freelance consulting online-2Freelance Consulting Online: a Beginner’s Guide

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 business consultant work from home

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.

freelance consulting online business consultant independent

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 online freelance consulting in a recession

“Replacing income with digital freelance consulting” course

If you found this article helpful, you will benefit from our “Replace your income with an online-only freelance consulting business” 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.
  • Getting reviews.
  • 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.
  • Location.
  • 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.

Implementation

  • 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.
  • Managing contracts.
  • What should you bid for?
  • Following up with clients.
  • Two-part strategy.
  • 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. 

Reccomended books:

Best Business Books Like Blue Ocean StrategySucceeding 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.

Best Business Books Like Blue Ocean Strategy marketing saves the world strategicMarketing 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.

Best Business Books Like Blue Ocean StrategyThe 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 Strategist remains 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.

Best Business Books Like Blue Ocean Strategy The Innovator's DilemmaThe 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.

Cheers, Kris

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