The Pros and Cons of Starting an Online Consulting Business
Here's a closer look at the upside and downside of consulting. Find out if it's a good fit for you.
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The following excerpt is from Shelby Larson's book Moonlighting on the Internet. Buy it now from Amazon | Barnes & Noble | iTunes
Shelby Larson presents the most reliable and proven ways you can create an extra paycheck for the short term and establish a continual revenue stream for the long term with your own website. In this edited excerpt, Larson offers a quick look at the positive and negative aspects of running an online consulting business.
Like freelancers, consultants are masters of their own economic fate with all the same pros and cons when it comes to being your own boss and having the freedom to choose the clients and projects you want to work with. But there are some additional pros and cons specific to consulting.
You don't have to be the personal expert. One of the great things about being a consultant is that you don't actually need to be a personal expert at what you're selling -- but you do need to be able to represent yourself as though you are. I know that sounds shady, but stick with me here -- I would never encourage unethical practices or strategies. But there are perfectly ethical ways you can provide stellar consulting and services without being a personal expert yourself.
You are NOT the worker bee. You are getting paid for your brain, not your hands. This is my way of saying that you are getting paid for what you know instead of what you do. From your prospect's perspective, they may be paying you for your knowledge and for the services you are providing, but in reality, you know you are not actually the one doing the work. You have a trusted outsource solution.
You can leverage other people's success. You don't have to have a history of success to get started because you can leverage the case studies and success stories of the outsourcers whose services you are reselling. Some people refer to this as "Social Proof Jacking."
You enjoy a low-cost setup. The costs to get up and running are relatively minimal. You'll need an online presence and a way to get in front of your target audience, but that's about all.
You may not be the personal expert. While this is definitely a huge pro, it can also be a huge con because you have to know enough about the industry to evaluate your prospect's situation and make accurate recommendations of what services they need to accomplish their goals. It also can be challenging to provide quality control for a service you are not an expert at.
Outsourcers sometimes fail. It is inevitable that at some point, one of your outsourcers will fail and you will be left holding the bag. You get all the accolades and benefits of the great work your outsourcers do on your behalf, but the flip side is that if one of them fails you, that's also on you as far as your client is concerned. You can be left scrambling to figure out a quick replacement solution.
There's a lot of competition and skepticism. Over the years, marketing consulting has become a huge target in the biz op space. The result is that you will have a lot of competition. Depending on the type of consulting you are doing, you may not have a lot of competition that is an actual threat to you, but it exists nonetheless. In addition, businesses have been approached by a lot of marketers who don't know what they are doing, so a level of skepticism has crept into the marketplace. You will have to fight being lumped in with these incompetents.
You'll have less control over the outcome. Because you're not doing the actual work, you have less control over the outcome. Fortunately, there are things you can do to keep your finger on the pulse of what is happening with your client's work.
Ultimately, being a successful consultant requires the following strengths:
Working knowledge. While you may not be the personal expert doing the actual work, you need to acquire and maintain enough knowledge to evaluate your client's situation and make recommendations that accomplish their goals.
Great sales ability. You need to be very good at selling yourself, your business, and your services.
Great people skills. Being a consultant requires regular contact with your clients.
Project management ability. You need to be able to manage the work you are running through outsourcers for your client. This requires the ability to manage multiple moving parts and a high level of organization skills.