A natural move for many execs-turned-entrepreneurs is to start a
consulting business. With years of industry experience under their
belts, plus the added attraction of low start-up costs, becoming a
consultant is often the most obvious choice. However, experts warn
it's not always the smartest choice.
"There are so many people today who call themselves
consultants and come from a large corporate environment that
it's an extremely crowded field right now," says Molly
Thorpe, chair of the executive committee of the Caltech/MIT
Enterprise Forum and owner of Thorpe Associates, a Canoga Park,
California, business planning consulting firm. "Any consultant
who starts out today has a real tough time of it."
What are the most effective ways consultants can compete?
Develop an area of specialization, advises Thorpe. "As an
independent consultant, you have to have a specialty and not say
you do everything," she says. "Too many consultants say
they do 20 things, and maybe they do, but when people think of
them, it's too unfocused."
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Still, even specialized consultants are likely to run up against
challenges. For example, while Schiele's focus is quite narrow
(she chose cultural diversity and leadership management training),
she's found plenty of competition in her field. In fact, she
admits sometimes her focus can be somewhat limiting.
"It's been rewarding and a struggle at the same
time," Schiele confesses. "I'm able to do what's
important to me, but there's a real glut of diversity
consultants. I don't get as much business as I'd like, but
at least I'm doing what I want to do."
Having an alternative means of financial support is an important
consideration before launching a consulting venture, says Thorpe.
In addition, consultants are more likely to succeed if they've
researched their target markets ahead of time and tried to find
ways to serve them. Possessing a healthy dose of patience while
building your credibility and establishing your client list is
vital as well.
Above all, be prepared to put on your sales hat and promote
yourself. "You have to learn to market yourself, and a lot of
former executives aren't comfortable with that," says
Thorpe.
Somewhat uneasy in a sales role, Schiele hired a broker early on
to make contacts and set up meetings with new clients. Says
Schiele, "The broker really makes the whole process a lot
easier."
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