How can I limit the risks of becoming a consultant?

Some of the ways you can reduce the risks of becoming a consultant include:

  1. Develop a strategic plan
  2. Develop ideas and resources before taking the plunge
  3. Accumulate resources to see yourself through the startup period
  4. Prepare a pros and cons list
  5. Talk to practicing consultants
  6. Increase your profile outside your organisation as much as possible
  7. Get an experienced personal mentor to help you through these risks.

Bruce Holland’s experience

I know how difficult it can be to decide to take the plunge. The circumstances of your decision will be different from mine but sharing it may help you through this difficult transition.

I think I have always known that I wanted to be an independent business person and I thought that by the time I was 40 I would have developed most of the skills needed to take the plunge. However, when I turned 40 I was headhunted for a position as Group Strategic Planner at the Bank of New Zealand. It was almost impossible to turn down. I rationalised that a few years wouldn’t delay things too much and the experience and profile would more than compensate. On reflection this was more to do with not wanting to take the plunge than about the benefits of the job, because the dream never went away.

During my time with the BNZ I deliberately worked at developing approaches and building files of useful material that would be useful for consulting. I also developed my personal profile outside the bank by becoming the Wellington President of the NZ Strategic Planning Society and other professional bodies. 

I used this time to talk to several existing consultants I’d met at NZSMS. Nearly all of them told me I was mad to throw away a great job for such an uncertain future.

After four years, I had more of the skills required and more contacts to approach. The dream was even stronger. I knew I had to do it. I also knew I had to do it soon. However I didn’t know whether I had the skills and I still had to convince my family who couldn’t see the point.

The result was anxiety, many sleepless nights and waking to cold sweats for months before taking the plunge. Indeed making the decision was so frightening that for several months before resigning I told as many people as I could that I would not be employed by anyone else by the time I was 45. I resigned on my 45th birthday. I had to. It was necessary to be honest to myself.

Well before the decisive day I worked for months on a strategic plan for my consulting business. I still have that plan. Many of the broad strategies partly came to fruition but the detailed financials were way off reality. This didn’t matter as its main benefit was to convince others more than myself as it worked.

The financial risks were real. I had 3 children and one still totally dependent on me. Savings were few so during my last year I took almost no annual leave so I could cash it up. I had a company car and my wife had an old Mini. For months after the plunge the family crammed into the Mini. 

How I wish I had the help of a mentor like to get me started.