August 18, 2008
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By Anne Holland, Founder
If you, like thousands of marketers, are considering working as a consultant, my advice is not to quit your day job until you're far too busy to juggle both. During this time, you should be doing three activities concurrently:
#1. Low-risk, try out
Pro bono work is a great way to test your consulting chops. You'll discover what being a consultant is really like. (Your feelings may surprise you.) Plus, you'll get testimonials and creative samples to land paying clients with in the future.
Your best bet is work for a trade association or business club in the niche market you're hoping to consult for. You'll get to meet members and grow your reputation with association officials who may recommend you to members later when you officially hang out your shingle. Many associations eagerly welcome help promoting their membership, events, awards due dates, and paid publications.
Another choice is pro bono work for entrepreneurs and startups in the niche of your choice. The experience of working with an actual client is invaluable, and they'll allow you odd hours in keeping with your day job. Plus, you can require that they allow you to submit the work and results for awards which can lend your future practice invaluable credibility. (Note: MarketingSherpa tracks advertising, PR and marketing awards in our Awards Calendar for Members. Trial Membership is free.)
However, you should swear pro bono business clients to secrecy on your relationship. I'd even suggest a formal contract including this point. The relationship should also have strict time limits and goals otherwise you can get sucked into free consulting for life or risk bad feelings. It's hard enough to establish solid financial value for consulting in some clients' minds. You don't need the "this could be free" whisper going around the community.
The classic pro bono choice is a charity or other non-profit. Frankly, unless you can see a direct connection between your work for the charity and a promotional opportunity to land new clients, I would not recommend this. You won't get valuable networking, and charities are different beasts than most clients – so the experience will differ as well. Give to charity, but as a personal act, not as a start-up test maneuver.
#2. Reputation & connections growth
Definitely submit pro bono work for awards. In addition, aggressively start online efforts for self-promotion and networking, such as LinkedIn, Facebook, and a blog.
Next, make a list of media to which you can submit articles. Media might range from trade association and trade journal magazines and newsletters to email newsletters from vendors in the field. If the readership matches your target niche, chances are the editor may welcome a marketing columnist. In my experience, vendor email newsletters can actually outperform trade association ones significantly.
Use the "about the author" blurb to include a hotlink to your blog, along with a tantalizing note about what the reader might find there, such as a tip sheet. Be sure to add an "As seen in" blurb to your blog as well, with the logos of the publications you've written for. (Note: Get formal permission to use logos beforehand.)
Don't rely on the Web for all of your networking. Most consulting clients come through real-life meetings. Nothing online can duplicate the impact of having met someone face to face.
Offer to speak at industry events, even local club luncheons. You'll get more experience at public speaking, plus your name will get out there. (Several client-side marketers who've spoken at Sherpa Summits have launched consulting practices partly on the strength of that exposure.) Otherwise, attend every possible in-person event you can to meet potential clients and allies. If it means using vacation days to attend a trade show, so be it.
Handy tip if your company won't spring for tickets: Some larger trade shows will let you in for free as press. Contact a trade journal or business website editor to see if you can get credentialed as a freelance reporter for the event. Include links to sample articles or relevant blogs you've written for in the past, and tell the editor you'll cover your own time and expenses. In all fairness, you will need to write an article or show review and submit it in a timely manner -- probably from the show floor itself. If you aren't a great, fast writer, don't try this.
#3. Financial padding
Set up a separate bank account for your consulting practice. You don't need to incorporate or trademark for this; it can be a "dba" (doing business as) account in your to-be company name. Place all consulting checks into this account. Silo this money away from your regular accounts so you're not tempted to spend it. This will be your financial cushion to pay yourself later when you go full time.
Your ultimate goal is a three-six months' burn rate (i.e., the amount of money you need to live, pay taxes, and run your business if there's no income for a month) in this specific account. In the future, when you've got steady clients, your company account should never dip below 45-60 days' burn rate. (Some consultants let company savings dip to 30 days, but I think that's dangerous because some clients take up to 120 days to pay bills.)
While you still have a steady paycheck, apply for a line of credit or a new credit card if you don't already have some available. You may only need $5-$10k. Shop for the best possible interest rate at sites, such as BankRate.com. Don't plan on spending much of it though; this should be emergency funding. Just run a small charge every 90 days or so to keep the card in use so it's not cancelled by the issuer.
Last, don't splash out on fancy new office equipment beyond the bare minimum. You don't need an Aeron chair or top-of-the-line Mac to start a company. (I started MarketingSherpa on a plank of wood laid across two dinged-up filing cabinets.) Save fancy office purchases as rewards when you've had your first successful year with more business already contracted for the second.
OK, expenses are mainly anything you need for (tight budget) networking and promotion, which might include relevant trade shows and an email service provider for the back end to build and ping an opt-in prospect list.
Next week: Should you consider being an independent contractor for your current employer?