How To Launch a Side-Kick Consultancy Business — Right Here, Right Now?
Updated on May 11th, 2023
April 25th 2022
This text was fully written by humans.
SUMMARY / KEY TAKEAWAYS
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- Regardless of how well you think about your professional skills, you can develop a side-kick consultancy business – right here, right now!
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- In this article, we introduce the six steps in which you can start a side-kick consultancy business.
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- We also give tips on how to effectively hustle and search for clients, and how to negotiate your pricing.
Table of Contents
- Side-Kick Consultancy Business: Can It Be A Remedy To a Leaking Home Budget? Or Perhaps, a Cure To Boredom?
- Your Own Freelance Consultancy Business: The Best Way To Offset Inflation.
- “Do I Have Competencies That Can Be Monetized?”
- How To Become a Freelance Consultant?
- How To Negotiate In Business Consultancy: Create a Set of Iron Rules.
- How To Negotiate Large Deals In Business Consultancy: Give Your Client a Choice.
- How To Handle a Short-Handed Client?
- What To Remember When Negotiating Freelance Consultancy Business Deals?
- Always Play For The Long Term.
- Summary: How To Kick Off a Freelance Consultancy Business Today?
Side-Kick Consultancy Business: Can It Be A Remedy To a Leaking Home Budget? Or Perhaps, a Cure To Boredom?
Have you ever thought to yourself,
“I really enjoy my job — If only it paid a few hundred dollars more, I would be perfectly happy about my professional situation”
“I would like to conduct some project that is a bit out of my comfort zone, meet new people, and try myself with a new problem… but I am just scared to quit my stable job for this purpose” ?
Well, the good news is that you can develop a side-kick consultancy business for this purpose – right here, right now! As a side-activity, a consultancy businesses can broaden your horizons, work for your professional development, and let you earn extra bucks at high hourly rates without taking too much commitment.
Even more so; for many people these days, becoming an independent consultant becomes plan A rather than plan B. As described in the Paul Millerd’s best-selling book “The Pathless Path,” for millions of professionals, breaking out from the system and living independent life, taking risks and seeking fulfillment more than status or money, has become the synonym of professional success.
And, you can achieve this goal in 6 simple steps! In this article, we will explain precisely how to get the first deals and negotiate your conditions to gain a good experience as a consultant.
Your Own Freelance Consultancy Business: The Best Way To Offset Inflation.
We are all scared of galloping inflation. Is there any proven way to offset the inflation and make sure that your income grows faster than the prices? Even the investments traditionally seen as safe best, such as real estate, don’t seem to be as safe anymore.
Well, it so happens there is one! Just think about it: if you start a freelance consultancy business on the side, you decide the hourly rate for your time. And now:
- Adjust prices to inflation. It is perfectly justified if you increase your hourly rate following the inflation. Your clients should understand the situation,
- Adjust prices to your skills. On top of that, your professional skills will gradually increase on the job. After all, you not only teach but also learn while consulting. Therefore, it is perfectly justified if you further increase your hourly rate following your skillset and experience.
- Your client base will grow. If you are a solid consultant who pays attention and effort to every single client, the good word will spread and your client base will grow with time. That’s why your income will additionally increase. It might even so happen in the future that you will get more clients than you can handle, leverage using other professionals’ time, and start an agency.
“Do I Have Competencies That Can Be Monetized?”
To start with, many professionals without formal experience in consultancy ask themselves this question. The answer is: of course you do! In fact, every professional active in the job market does.
It is a matter of proper personal branding to find clients who need your specific expertise at the moment and pick the right clients for yourself so that you can build your competencies and grow.
Today, companies outsource all kinds of services, from writing services to research, marketing, and business development. Especially in the last 2-3 years, when startups started getting million-dollar valuations at much earlier stages than before and the amount of VC funding skyrocketed, it has become popular to outsource labor even at early stages.
Just a few years back, most startups were unlikely to get any funding before building a working MVP and getting enough users on board. Now, the sentiment has changed and it is quite common to see two guys with a dog who “get an idea,” and VC money is thrown at them from left and right.
In such a situation, the demand for consultants and subcontractors skyrocketed too. The money and ideas are on the table; there are just not enough competent people in white-collar jobs to work out solutions. Consultants of all kinds are in demand. Quite frankly, you would get by as a consultant even if your main asset is your contacts, not your knowledge.
How To Become a Freelance Consultant?
Now, with this question out of the way, how to become a freelance consultant?
Step 1: Read Your Contract In Detail and Discuss With Your Boss.
Many employers include a non-competitive clause in employment contracts. This clause prohibits you from running a business that can be seen as competitive with your day job in any capacity. It often forbids you from joining a competitive company for some period after leaving your current employer as well.
This comes for a reason; the employer aims to protect their IP and make sure that you won’t transfer the knowledge gained while working for them to a competitive business.
Of course, many employees do not need to sign such a clause. But either way, as a rule of thumb, it is a good habit to first inform your superiors that you have an intention to launch a side-kick business activity.
Even without this clause, your employer can still be concerned that in presence of other professional commitments, you won’t be able to work effectively for 40 hours a week. Therefore, they have the right to know.
So, don’t let your boss find out from LinkedIn or from a third party that you have a side-hustle. Just tell them openly, and in 98% of cases, they will be fine with it. Unless, of course, your contract prohibits you from side-hustles.
Step 2: Make Yourself Visible.
Obviously, to get any clients, you need to first indicate that you are available as a consultant. Diversify your strategies here! Among others, you can:
a) Put the information about your availability for consulting.
You can do this by appending “{{Discipline}} Consultant” or, better, “{{Discipline}} Advisor” to your profile tagline on LinkedIn, and elaborating on the scope of your consultancy services in the profile description.
Be brief and straightforward; it’s your sales pitch so talk primarily about the client’s benefits from working with you. Your description should clearly answer the question: Why you? What is your unique value proposition? What is the combination of skills and values that make you stand out?
The important thing about it is that you picture yourself as an expert, not as someone who is aspiring to become one or just starting their activity in the space. It is better to avoid expressions such as “Enthusiast” or “Interested In.”
You can also explicitly name yourself an expert, e.g., “Digital Marketing Expert,” “Data Science Expert,” or “Public Relations Expert.” Since being an expert is not measurable, no one can accuse you of false marketing. Unless you call yourself an expert in a discipline you know nothing about, of course.
An example from Natalia’s LinkedIn profile:
Needless to say, you shouldn’t forget to invite your previous clients to leave you reviews on this platform! That’s always the best start. You can invite them to review your work straight from your account.
Lastly, make sure that you make it easy for the lead to contact you. Share extensive contact information via multiple channels of communication on your LinkedIn profile. Please find more information on how to create a compelling LinkedIn profile in our article “10 Steps to Create an Effective LinkedIn Profile.“
b) Spread the news online.
Put the information about your services on your personal website and other social media and post the news on your social media wall. In general, as a freelance expert, you will need to build your personal brand via strategic social media activity.
Please find more advice for how to make social media work on your behalf in our article “5 Rules for How To Make Social Media Benefit Your Career.”
Remember to also keep the same profile photo across platforms so that you are easy to recognize! You can also try setting a free account at LinkTree — it is a convenient solution to link to multiple social media channels at a time.
c) Talk to befriended people.
Share with your friends and colleagues on every occasion, preferably casually in person. People chat with friends and family about whatever they heard at a party, so the information will spread — and if you are lucky enough, you might get some deal straight away.
Step 3: Hustle Actively.
Hustle is an important part of getting deals as a consultant. Don’t forget to mention your willingness to help out with projects whenever going to events.
It is easy to do this naturally. After every conversation with a new person, you can, in the example, reach out for your business card saying, “If you need help with X or Y, please let me know and I will see what I can do for you.”
Remember that hustle is all about increasing the odds of success and using heuristics rather than algorithms. You will need to approach many people and be patient. Eventually, one day, your phone will start ringing.
Don’t be desperate to land every single deal; people detect desperation with ease and usually pull back. It is actually much more efficient to let the leaders speak, ask them a lot of questions about their needs and problems, and patiently listen before you make your move and propose a solution or a service.
And what then? Well, the best approach here is to offer any interested party one hour of your time. Meet with them online, ask them about their needs and problems, let them speak, and start advising them without expecting anything back.
Instead of talking about what you can do, just do it. Give your opinions, share your tips for how to possibly approach the problem, and share some useful contacts with them.
Many people fear that sharing contacts can result in losing the client on behalf of someone else. In fact, it works quite the opposite — the more contacts you share, the better-connected person you seem to be in their eyes, and the more likely it becomes that they will want to get you on board.
Please find more advice on hustling via LinkedIn in our article “Top 11 Rules For Effective Networking on LinkedIn.”
Step 4: Hustle Passively As Well!
Next to actively looking for clients, you should enroll for platforms matching freelance talent with businesses. If your skills are in high demand, perhaps you won’t even need to look for clients all by yourself anymore!
The top 10 platforms for freelance talent are listed before:
- LinkedIn is a platform that offers the option to create a Service Page: a section of your profile where you can offer your freelance services. This requires little effort if you have created a compelling LinkedIn profile prior to looking for freelance gigs. Additionally, this solution doesn’t require you to put a price tag on your time upfront.
- Office Hours (affiliate link) is an expert network platform matching experts in IT and biotech / medicine with high-profile corporate clients and VCs. Simple application system using LinkedIn profile, acceptance automatic.
- TopTal is an expert network platform only listing freelancers classified as “top 3%” of freelance talent. As a talent listed at TopTal, you need to classify in one of five categories: Developer, Designer, Finance Expert or Management Consultant, Project Manager, or Product Manager. You need to fill in your profile by hand, acceptance to the network is not automatic (there is a selection process).
- ConsultPort is an expert network platform matching management consultants and digital experts with high-profile corporate clients and VCs. You need to fill in your part of your profile by hand, but the most of the information is loaded straight from your LinkedIn profile, acceptance to the network is not automatic (there is a selection process).
- Clarity is a platform connecting startups with business advisors. You need to fill in your profile by hand but the acceptance is automatic.
- Outvise is a platform connecting businesses with business tech freelancers and interims: technology and software experts, business and digital marketing consultants, data experts, project managers. You need to fill in your profile by hand and load your CV in a file but the acceptance is automatic.
- Lemon.io is a platform connecting businesses with developers Simple application system using LinkedIn profile, acceptance automatic but the platform is curated which means that the lemon.io team chooses freelancers for every client depending on their demands.
- Kolabtree is a platform connecting businesses with freelance scientists and industry experts. To join as a freelance expert, you can just connect your LinkedIn and ORCID profiles and the acceptance is automatic.
- 99designs is a platform connecting businesses with freelance designers and illustrators. As a freelance designer, you need to fill in your profile by hand but the acceptance is automatic.
- Freelancer is a huge freelance marketplace covering a wide number of industries. To list as a freelancer, you need to fill in your profile by hand but the acceptance is automatic. At Freelancer, you need to actively search for projects through the platform or set alerts for specific keywords, and actively bid for projects.
- PickMyBrain is a popular platform where you can offer almost any type of professional virtual or in-person service, from a casual chat for free to high-end business consultancy at rates of $500 per hour or more.
- ADPList is a platform offering free mentoring where you can register either as a mentor or as a mentee. Although mentors are not formally paid, they can get your first reviews as a consultant, collect “Karma points,” and unlock rewards at the platform.
Of course, you are free to set different hourly rates across platforms depending on who the target client is, and what hourly rates most of the other freelancers ask.
Step 5: The “Help Me Help You” Formula.
Now, let’s assume that you offered another party an hour of your time. One day, they get back to you, asking for more of your time. This is a clear sign that your hustle has worked — they find your advice valuable and want more.
In this case, you need to start negotiations. The happy hour is over, and now, they need to start paying attention. To achieve this goal, it is good to use the “Help me help you” formula.
Namely, excuse yourself, for saying that unfortunately, you are overloaded and you have no free time at the moment. While spending time on their project, you couldn’t push your own projects forward. Therefore, you cannot help them without proper remuneration.
Then, ask them: “On what terms can I help you?” They will understand without words that you mean financial terms. And, they will need to give you a number.
You could also be more precise with your conditions, and openly tell people before spending time with them that you can offer them a free hour of consultancy. In that case, whenever they come back to you, it is obvious that they are willing to pay.
This approach is not recommended though as it immediately changes the dynamics of the conversation. It is nothing else than explaining the terms of working with you way before a potential client ever gets the chance to get to like you as a person and fall in love with your consultancy practices. It is basically the same negotiation mistake as starting the salary talk at the beginning of a job interview.
The “Elon Musk” Formula.
You could even push this strategy one step further and use the more edgy version of the above strategy, namely the “Elon Musk” formula. How much do you think Elon could charge per hour if a business would like to book his mind for an hour? Most probably, A LOT.
Why? Because in daily life, he is occupied with building a few world-changing businesses. He would need a really good reason to step away from his mission for an hour and help out other businesses.
Similarly, you could choose to never mention your consultancy services in your LinkedIn profile and fully focus on describing your role in your day job or business, and your scope of expertise. Then, whenever someone gets back to you asking for consultancy, you could say something along the lines of:
“Regretfully, in daily life, my mission is (choose your professional mission). I work on this issue full time, and I do not have too much time on other projects. Therefore, sadly, I could only help out if I get a proper compensation that I can then invest more back into my mission.”
In general, people trust and value active professionals who build projects more than those who are “just” advisors. After all, advisors comfortably sit on the sidelines instead of getting their hands dirty and actively building the world. Therefore, this implicit strategy of getting clients on board can work better than an explicit offer of consultancy services.
Step 6: Set Your Boundaries While Negotiating.
The old rule of negotiations is that whoever gives the number first, gets a worse position in the game. Therefore, ask them to propose an amount and negotiate up from that point.
Since it is a freelance contract without any additional benefits, you should make sure that your hourly rates are substantially higher than your normal hourly rates at a full-time employment contract.
As a rule of thumb, you should multiply your regular hourly rates on your employment contract by a factor of 3-4 to calculate your minimum hourly rate as a freelancer. for example, if you are getting 17$ gross per hour as a PhD candidate, you should keep your minimum hourly freelance rate at 50$ or so.
It is the optimal approach to base the value of your work on the value you produce for your client (as you can also learn from a famous LA-based designer, Chris Do also known as The Futur) for instance, if your work makes them 100,000$ in profits, you can ask for a cut of 10%.
In practice, in most circumstances, this valuation is impossible though, as, for most freelancers, their work doesn’t contribute to commercial projects in a direct way. Therefore, it is better to come up with flat hourly rates to charge your clients. The rule of thumb is: the more directly your client financially benefits from your work, the higher the hourly rate should be.
For instance, when you are approached by a Venture Capital firm and asked to review an investment proposal, you can charge them much more than when you are approached by an educational institution to take part in a research project.
It is because, for a VC firm, a few hours of your time spent looking for bottlenecks in the project can save them hundreds of thousands of dollars spent on a bad investment.
How To Negotiate In Business Consultancy: Create a Set of Iron Rules.
For example, you could create the following rules for yourself:
Tier 1:
Research or biz dev projects for educational institutions: 60$ + tax per hour,
Tier 2:
Research or biz dev projects for startups and other private companies: 90$ + tax per hour,
Tier 3:
Research or biz dev projects for Venture Capital firms: 150$ + tax per hour,
Tier 4:
If the project is really boring and cannot teach you anything new: add 30% to the bill.
How To Negotiate Large Deals In Business Consultancy: Give Your Client a Choice.
Now let’s assume that you attracted a lead interested in putting a large order or setting a long-lasting collaboration with you. How to approach such a client to make sure that you land a juicy deal? Let’s be real here: people LOVE having a choice.
So, what do you think will work better for your case: giving them just one offer and prompting them to choose between your offer and other experts’ offers, or creating a menu for them, so that they have no time and mental capacity to think about competitors because they are too busy cherry-picking products and services from your offer to best match their needs?
Of course, a menu will work much better. It was also scientifically proven that, given three options, people have a preference to choose the middle option as they naturally perceive it as a good tradeoff between price and quality. This phenomenon is known in psychology as the center stage effect.
So, having that in mind, make sure that the middle option is satisfying for you. For instance, you could create a package of services like this:
Tier 1 (“Standard”):
20 hours of freelance work around the project: technical writing services. Price: $1,490 + tax,
Tier 2 (“Level up”):
30 hours of freelance work around the project: technical writing + additional copyrighting services around the project. Price: $2,740 + tax,
Tier 3 (“Full-stack”):
40 hours of freelance work around the project: technical writing + additional copyrighting services + full-stack business consultancy. Price: $3,990 + tax.
Never Give Discounts On Your Time! Generate FOMO Instead.
Regardless if you are negotiating a one-time consultancy session or a long-term project, remember that giving a discount on your consultancy services – which is, in fact, your precious time – doesn’t make the offer look any more attractive. If you put a discount on your time, it sounds like you are desperate or don’t respect your time enough.
So, if you hear that, “X dollars per hour is just too much”? Well, you have two choices. You can say, “Let’s come back to this conversation in a few months when, hopefully, you can afford it.” Or, you can take a more offensive approach to negotiations and generate FOMO.
You can say, “Until next year, I will release my online course and my book, and my expertise will be worth more than today. Therefore, I will be charging 2X for this service starting next year. It is the last call to book my service at this price.”
And well, you know how FOMO usually affects people.
In Your Consultancy Business, Go With Cash Rather Than Shares!
Furthermore, you should make sure that you will be paid in the right currency. It is not about “dollar” versus “euro” or “bitcoin.” More so, this is an issue of: shall I take cash, or shall I take shares in the project?
Many startups look for consultants and collaborators who would agree to work in an exchange for hedged shares. In general, it is not a good idea.
Most projects fail in the market, and as a consultant, you are not in the driving seat. If the management of the project that you invest your time in, turns out incompetent, the project will fail no matter how good you are at what you do.
For worse, startups often condition the share options using “milestones” — quantified targets that are often unreasonable and detached from reality. For example, they will tell you
“If we generate 10 million in revenue in our first two years, you will receive 100,000 shares”
“If you build a community of 50,000 users within the first three years, you will receive 100,000 shares hedged for five years”
…while they don’t even have the MVP of their platform yet, not mention any users.
Therefore, you should express a clear preference for cash from the get-go. Think about it like this: if you get cash, you can invest it in any startup or asset that you want. If you get shares, your money is drowned in this particular project, and, since your shares are (typically) hedged, you will not be able to change your bet in the process.
How To Handle a Short-Handed Client?
It is in your best interest to stick to your personal standards. If you hear that you ask too much per hour, don’t bargain!
Just tell them that you are unfortunately too busy, you get more queries than you can handle while keeping the quality of your work, and that your rates will only get higher next year. And suggest another consultant who might help out at lower rates. This approach will show them clearly that you value yourself and you are not desperate for clients.
At this stage, they will likely FOMO into the deal and pay. And in the worst case, they will go work with another consultant, and you will make a new friend in the process (who will likely refer to you in the future as well). Clients are like buses; there will always be another one. No need to be desperate, especially if this is your side-kick activity.
Freelance Consultancy Business 2.0: Outbound Prospecting & Customer Relations Management (CRM).
If you would like to bring your freelance consultancy business to the next level, you can try so-called outbound prospecting, also known as “cold outreach.” It is the opposite of inbound prospecting, that is, marketing and passively exposing yourself to be contacted by leads. In outbound prospecting, you actively convert strangers to leads and then present your offer.
Of course, cold outreach has a low success rate in general, but on the other hand, it puts you in the driving seat: you can actively choose whom you are willing to contact and convert into your client.
Customer Relations Management, or CRM, is yet another level of development for your freelance consultancy business. While getting multiple clients on board, or reaching out to multiple leads with outbound prospecting, you can easily lose track of whom you spoke to, when, and at what stage the sales process is at the moment.
And as a matter of fact, most professionals and businesses today operate at the edge of chaos and need multiple reminders to successfully seal any deal.
Therefore, you will need a proper system to manage your relations with former, current, and potential future customers, and keep on knocking on the right door at the right time. These systems exist and are commonly known as Customer Relations Management (or, CRM) systems.
As a beginner, you might manage your relations using a simple Google Sheet. But when your number of leads is growing, it is advisable to make use of automated systems such as Hubspot or Zoho.
Don’t Be Afraid To Say “No!”
Lastly, remember that a skillful hustle is also about the art of saying “no” when necessary. Not all projects are good projects.
If you feel that the project leaders don’t really know what they are doing and need a rescue team rather than specialists to deliver specific components of the project, kindly talk yourself out of the deal. They will likely blame you for their own failures, and give you unfavorable reviews down the line.
Consultancy is about reputation more than anything – it is all about the quality of projects and contacts in your portfolio rather than sheer numbers. If you find a team you click with, stick to them, and you might quickly leapfrog to the first league projects in your discipline!
What To Remember When Negotiating Freelance Consultancy Business Deals?
In the process, you also need to make sure that:
1. Remember about IP protection.
You protect your intellectual property for your business, for example, by registering a trademark (as we also described in the article “Rebranding Into Ontology of Value: On The International Intellectual Property Law”),
2. Remember about taxes.
You can invoice your clients by setting an official commercial activity pegged to your name and registering it in the Chamber of Commerce (or, if you are based in the US, you can do it online via First base) so that you can charge proper sales tax (as we also described in the article “5 Surprising Facts about the Sales Tax (VAT) That Any Professional Should Know“).
3. Remember about building visibility online.
You create a simple landing page for your business. It doesn’t need to be any fancy. A simple WordPress site listed for instance on Bluehost, featuring a simple description of your activity and your photograph in a power pose is more than enough. Also, remember to collect testimonials from your clients so that you can feature them on your landing page later on.
4. Find people who are alike.
For instance, you might consider joining the Overemployed community: a community of professionals who aim to juggle two remote jobs, earn extra income, and reach financial freedom.
Mind that you do not need to invest time in your business in the aforementioned ways before finding your first clients. Don’t waste your energy; it is perfectly fine to start by finding the first project and then proceed to register your business.
Always Play For The Long Term.
Career development is a life-long game. Sometimes, it is worth taking a less paid project just to lift your competencies, make strategic contacts, and make two steps forward in your career development.
Sometimes less is more. The rates you will be able to charge in your next projects will be dependent on your experience, your portfolio of (completed!) projects, and the strength of your network, not on the rates you charged in your last project.
Mind that your income will not grow linearly, but rather, exponentially. At first, you will need to acquire a minimum viable set of skills necessary to do the projects. Then, you will slowly polish your skillset towards proficiency. But your income will start growing exponentially only when you become and expert and develop a personal brand around your skills.
Also, remember that money in, money out. Even as a bootstrapping freelancer, you cannot be afraid to invest in your business. There will be some initial period when you need to put your head under water, spend more than you earn, and trust the process.
It has nothing to do with “abundance”, the law of attraction, or universe paying you back for your trust, or any other cult-like belief. It’s very simple; if you believe in yourself, then roll a dice on yourself as it’s a best investment you can ever make.
Summary: How To Kick Off a Freelance Consultancy Business Today?
In summary, it is as not difficult to start working as a freelance consultant as it might seem. You should put yourself out there and open every possible door on the way and sooner or later, the deals will start coming.
This initiative will not only supply your monthly budget, but also, give you more confidence in your skills without putting the burden of responsibility on your shoulders.
Regardless if this is your way of living in a long term or not, anyone can benefit from becoming a (part-time) freelancer for some time. As a freelancer, you will learn to mind your time. What do you do with your time? Time is a currency, and when you offer your time billed per hour, you can become much more time-aware.
In the process of working as a freelance consultant, you will also learn a lot about cooperation and compromising. At the end of the day, you offer your time and competencies but someone else makes all the decisions about the course of the project.
You just need to do your work to the best of your ability, working on your professional development too and then you can sleep well in the night regardless of what happens next, as you did your part as agreed.
Also, remember that money is a form of a game — it usually comes to those who don’t need it anymore. Offering yourself as a consultant is just one of the hundreds of ways how you can generate new streams of income in your daily life.
The more doors you open to allowing money to come to you from multiple sources on a continuous basis, the more relaxed and self-confident you will become, and the more new opportunities you will be getting. So, you should make opening doors your rule!
Good luck with your hustle – and don’t forget to share in the comments below as soon as you get your first paid gig as a freelance consultant. Let’s celebrate together!
Please find more information on how to become a freelance consultant in the book Freelance Consultant by Richard Newton.
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Please cite as:
Bielczyk, N. (2022, April 25th). How To Launch a Side-Kick Consultancy Business — Right Here, Right Now? Retrieved from https://ontologyofvalue.com/how-to-launch-a-side-kick-consultancy-business-right-here-right-now/
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