Working for yourself can be exciting and hugely rewarding. But stepping away from a company job can be nerve-wracking, especially when you’re been employed for years or decades. And over time, you’ve probably built up financial and personal commitments that can also hold you back. But whether you decide to make the leap right now, or file it away for the future, learning how to switch to self-employed consulting opens up your options.
Success will look different for every person. But it’s possible to earn a very good income as a freelancer, often matching or exceeding what was available as you climbed the corporate ladder. And at the same time, you’re able to choose the type of work you pursue, whether you prioritise business or family time, and if you want to be surrounded by people or operating largely alone.
You may already have experience working for a big consulting firm, such as KPMG, Deloitte, Accenture, PwC or McKinsey & Company. Or you’ve spent time building your skills and experience in a specific industry and can now offer help to other companies in areas such as marketing, manufacturing, IT, human resources, data, research, or almost any specialism you can imagine.
All you need is knowledge and authority on a particular subject, and the ability to find organisations willing to pay for your experience and insight.
- What is a self-employed consultant, and why are they hired?
- What skills and experience do you need to become a self-employed consultant?
- Why become a self-employed consultant?
- How to switch effectively
- Getting buy-in from family and friends
What is a self-employed consultant, and why are they hired?
As a self-employed consultant, you’ll be expected to have a sufficient grasp of your specialism to give professional advice to businesses and individuals. Usually this will be on a temporary or contract basis, until that particular need has been met.
Smaller businesses tend to use consultants before they’re able to justify filling a role permanently, or to educate staff sufficiently to cover an area of business where they’re struggling. For example, start-ups and SMEs might not have the payroll or sufficient demand for a full-time Marketing Director, but could benefit from someone with experience directing their efforts on a temporary, part-time basis.
But larger companies also need consultants on a regular basis. It may be to get access to expertise that’s difficult to source and hire, or cover a temporary vacancy or one-off project, or to provide an objective perspective as an outsider who isn’t impacted by internal politics and blind spots.
Self-employed consultancy includes both individual consultants, and those who decide to take on staff and build their own business.
What skills and experience do you need to become a self-employed consultant?
The only requirement to be a self-employed consultant is that you’re able to secure enough client work, and offer advice at a good enough level for the business to benefit. So, there are no set qualifications or years of experience which need to be reached for you to be successful.
But you’ll be entering a competitive market, and leaving clients underwhelmed and disappointed generally leads to a fairly short-lived career. Having a combination of education and proven skills will help you to attract projects, and be able to confidently deliver results.
The majority of consultants will have a bachelor’s degree in a relevant subject, and may have followed this with further postgraduate study. This is particularly useful in popular fields, such as business consultancy, where a Masters of Business Administration (MBA) would be fairly common.
Marketing consultants will often have professional qualifications from industry organisations such as The Chartered Institute of Marketing, whereas a HR freelancer would get training and accreditation from the Chartered Institute of Personnel and Development. An IT consultant would typically be certified in their particular area of expertise, whether that’s working with Apple, Amazon Web Services, Cisco, Citrix or others. It really depends whether you choose to specialise in areas such as network engineering, cloud computing or cyber security.
Most consultants will have also spent at least a few years working in an employed role in their field, or a related area, before starting out as a self-employed consultant. This demonstrates practical experience, and provides the foundation of a professional network to hopefully bring in some of your first clients.
You don’t have to work at a consultancy firm before becoming a freelance consultant. But if you’ve worked for well-known and prestigious companies in your industry, it’s likely to help you secure clients. Especially if you’ve received recognition or awards for your work, or been involved in high profile projects.
Consultancy used to be seen as an option for senior managers facing redundancy or early retirement, but that’s changed significantly over the last two decades. You don’t need to have worked for a minimum number of years in a role to have the skills and knowledge to become a self-employed consultant.
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Why become a self-employed consultant?
There are a lot of benefits to becoming your own boss, depending on your personal goals and ambitions. Particularly if you’re feeling frustrated by managers, burned out from long hours, or that your talents and drive are being wasted.
Some of the advantages shared by a lot of freelancers include:
No limit to financial rewards or growth: In an employed role, you’ll have an agreed wage and benefits package. But if you’re self-employed, every new client or project is extra money for your business, without the need to justify a promotion or pay rise. And if you want to take on subcontractors or staff, it’s your decision.
Autonomy over clients and projects: As a consultant, you can define the type of clients you wish to work with, and the projects you take on. And importantly, you can turn down work that doesn’t interest you, or suit your skills.
Flexible schedules and locations: Succeeding in a corporate job often means being in the office for long hours. As a consultant you can choose when, and where you want to work. You can ditch the commute and operate primarily from a home office. Or plan your day to fit around school times.
Exploring new opportunities: Want to work with cutting edge technology and innovation? Introduce new working methods? Or split your time between consultancy and other work or hobbies? As a self-employed consultant, you’re free to approach your business in whatever way you want.
An end to office politics: Any workplace can be subject to internal gossip, arguments and power struggles. The impact on your career can range from stress and worry, to being overlooked for projects and promotions.
Job security: One of the reasons many people fear self-employment is the potential for insecurity when you rely on client contracts. But it also means you’re able to see what the future may hold and plan for it, compared to suddenly being laid off or made redundant by an employer.
Learning and development: You may be lucky as an employee and receive career development in your role, but becoming self-employed means you can ensure you’re investing time to increase your skills. And with freelancing often meaning unexpected new challenges, you’ll never stop learning.
Developing confidence and receiving recognition: Anyone can experience doubt and imposter syndrome, but it’s different when you’re the boss of a business that you’ve built from the ground up. And any successes and recognition will go to you, rather than a manager or colleague.
It doesn’t have to be permanent: Along with the flexibility around your day-to-day work, self-employment is a choice that you make. And that you can change at any time. There’s nothing to stop you taking an employed role in the future. Or to prevent you from switching to starting any kind of business tomorrow, if you decide you’ve had enough of consulting at the moment.
How to switch effectively
You can choose to consult in your spare time whilst still employed (assuming your contract doesn’t prohibit it). Or jump into freelancing full-time from the start. But in both cases, a little time and preparation will make your efforts more effective and increase the chance of success.
It’s a good idea to develop a business plan and budget from the start, and potentially get the advice of an accountant to decide whether operating as a sole trader or limited company will be more beneficial. This allows you to make realistic plans, ensure you’re covering any financial commitments, and that you don’t miss out on any tax relief or support available as a new starter.
Even if you’re transitioning from a successful career, working for yourself brings new demands and challenges. Two of the best ways to cope with this is to save a financial buffer for the early months of your business, and to look at the various training courses available to support you, such as the IPSE Incubator. Even experienced freelancers can be surprised to discover some of the advice they missed by starting out in a hurry.
You’ll need to define your working practices, buy your own equipment and supplies, and organise insurance, health cover and pension. It’s important that your client doesn’t treat you as an employee, as this could cause problems under IR35 rules.
And to become self-employed, you’ll need some clients. Which means setting day rates, and ensuring that contracts are in place to protect both parties if something doesn’t go exactly to plan.
There are various approaches to determining your rates, whether you charge based on time, per project, or on the value you deliver. Whichever option you choose, it’s important to make sure you’re operating profitably as early in your career as possible.
And once you’ve set your prices, you need to ensure you’re receiving any money owed in a timely fashion. Unpaid invoices are useless for settling bills, and interest on debts and overdrafts can quickly turn a minor inconvenience into a bigger headache. Having clear contracts and statements of work can help prevent disputes over delivery, and knowing how to handle missed or late payments will minimise any disruption.
Finding clients and growing your business
Securing your first clients might be easier than you think. Often your current employer might be open to hiring you as a consultant, particularly if your role might take a while to replace.
But you should also let your current and past colleagues know you’re becoming self-employed, along with friends and family. Whilst working for your relations can bring some complications to the working relationship, it can also be valuable when you’re starting as a self-employed consultant.
You also need to leverage all of the contacts you’ve built up over the years, making sure that you’re not breaching any previous employment agreements in the process. You will have interacted with countless suppliers, partners, clients and customers in a typical career, so let them know you’re becoming self-employed as long as it doesn’t breach any Non-Disclosure, or Non-Compete Agreements. Being able to work for your former employer is always useful, along with references or testimonials.
And start adding other freelancers, self-employed professionals and potential clients to your network. They’ll be useful for support, outsourcing work if you’re fully booked, and maintaining a steady flow of inbound opportunities. Being able to rely on good collaborators can be invaluable, and referring clients to trusted contacts if you’re unable to help will often produce reciprocal results when you need them.
Beyond your network, there are various options for marketing your business to cold clients. And you can find dedicated information on how to find freelance clients, crafting an elevator pitch and more in the IPSE Advice section. But the best advice is to experiment and find the approach which works best for you and your industry. Some self-employed consultants will attract business by promoting themselves as a thought leader online, while others are just as successful relying on word-of-mouth referrals based on their work.
Whatever approach you take, the best marketing tactic will be the one that results in a sustainable flow of inbound clients, and that you’re comfortable in using.
Along with attracting new business, the other skill that’s important to develop is the ability to politely decline an opportunity that throws up any red flags. Whether you might be overcommitting, agreeing to something likely to fail or end up unprofitable, or it’s an industry you want to avoid, being able to say “no” will save you time, money and stress in the future.
While it’s difficult to turn down potential income, especially if your finances are stretched, you’ll often find a better opportunity comes along surprisingly quickly. And it can be less stressful than chasing unpaid invoices, or working for a vastly reduced rate for the sake of having some work to do.
As you discover what works for your business, you can develop processes and systems to automate some of the work. Or you can bring in support to handle areas you’d prefer to outsource.
Getting buy-in from family and friends
It’s rare to find a self-employed professional with family and friends who didn’t question their decision to leave a full-time job and work for themselves. But it’s important to involve those closest to you in your new business journey.
While you shouldn’t expect unqualified support and enthusiasm (and some people are highly motivated by doubters), if you are in a long-term relationship or provide the main income for your family, becoming self-employed can put a lot of stress on your home life.
Demonstrating your plans and preparation can help ease the worries of those around you. And make it more likely that they’ll be supportive and understanding if you have to make any sacrifices for your self-employed career. Running your own business can easily become all-consuming if you don’t set boundaries around your work life. And it’s important to have people who can sympathise when things aren’t going exactly to plan.
Even if you’ve got the most encouraging friends and family, it’s still a good idea to find professional contacts you can talk with about your business. They’ll be able to empathise and offer advice, and it prevents your partner, parents or kids being your only sounding board for ideas and complaints. From online communities to local business meetups, there are lots of ways to find people in various stages of similar careers, and might result in work referrals, mentoring or other opportunities.
Being self-employed can be a wonderful experience, whether it becomes your full-time career, or you decide to go back into employment in the future. You’ll learn more in a few months of working for yourself than in years of working in a job, as you take on new roles and challenges. Whether it’s sales, marketing, financial planning or designing your own website, it brings a much greater understanding of other functions in a business.
And there’s a wide range of support available, whether it’s through the IPSE Advice section, the Incubator for new starters, or helplines and partner discounts for members. All making it easier to achieve your aims when you decide to become a self-employed consultant.
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