The Top 10 Myths of Starting a Consulting Business

I’ve seen a lot of myths about consulting, all of them as hoary and false as the idea that if you build a better mousetrap, people will beat a path to your door. Following are the infopreneur myths I’ve found to be most prevalent… and wrong.

#1. Consulting is what people do when they’re between jobs
In my experience, you can’t both start a business and look for a job; either you are focused on finding what your clients need most and how you can meet those needs, or you’re focused on finding who will hire you for your skills.

#2. The services I provided as an employee will be valued by consulting clients
Broadly speaking, employees are paid to maintain processes, while consultants are paid for outcomes. While you may do the same type of work as a consultant as you did as an employee, the focus – and what your client is paying you for – is very different.

#3. I know what my clients need
You don’t yet know what they need, value and will pay you well for, until you have conducted at least a half-dozen reality-check interviews. (tiny.cc/reality-check) I am always surprised by what I learn when I conduct reality-check interviews with my existing clients.

#4. I’ll be able to bill 40 hours a week
At least half your time will ALWAYS be non-billable. You’ll be doing marketing, administrative work such as paying bills and sending out invoices, more marketing, professional development such as attending the AIIP conference (aiip.org/conference), and more marketing. I’ve been in business for over a quarter century, and I still spend at least a third of my time marketing.

#5. I won’t have to work as hard / I can do this part-time
It takes 400 hours of solid, unbillable work before you can expect your first client. If you’re only working part-time, it will take that much longer to get your first paying client. See more at tiny.cc/400-hours.

#6. Once I’ve written my business plan, I’ll be set
Business plan? What business plan? Yes, while it’s important to know where you’re going, it is also critical to have short-term metrics that keep you focused. What are your measurable 12-week outcomes? What do you need to do to get that first (or next) paying client?

#7. I should make cold calls to generate business
Wrong, wrong, wrong. For starters, keep in mind that no one appreciates or trusts cold callers. More importantly, you will be more successful if you fish for clients with a net rather than a line. Rather than chasing after individual prospects, focus on broad efforts that attract the kind of clients you most want to work with.

#8. I should focus on finding retainer clients
Nope. Retainer clients aren’t good clients, for a number of reasons. They pay for process, not outcome, so they tend to be price-sensitive and focused on your time as opposed to your value. And they pigeonhole you; they see you as one cog in a larger operation, which tends to keep your billable rate low. And they lull you into complacency, as you get accustomed to that steady payment, until the day that they quit using you and you are suddenly faced with no income.

#9. I should price myself low to start out
You’ll wind up with price-sensitive clients who only value you for your low price. You’ll get low-value projects from them, and they will only refer you to other low-budget clients.

#10. I can do this on my own
You may be a solopreneur, but you’re not alone! AIIP offers resources that help you succeed – accountability buddies, mentors, a lively discussion list, virtual events where we talk about our biggest challenges, and opportunities to build your skills.

 

Doing what we don’t wanna do

From both my own experience and that of people I coach, one of the biggest challenges for solopreneurs is keeping ourselves motivated and focused on doing the important things, even if they’re not the things we want to do.

When I hear myself saying “I know I should do such-and-such, but …”, I stop and ask myself what is keeping me from doing that thing. As a one-person business, I don’t have a boss to hold me accountable and the consequences of non-action aren’t as immediately painful as doing something that’s way outside my comfort zone. Here are a few of the things that help me move from “I know I should” to “I did it!”

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Simplify, simplify, simplify

One of the biggest challenges of a good info pro or researcher is to know when to say when. If we have five hours to spend on a project, we want to spend the entire time gathering information, evaluating it, seeing what’s missing, gathering some more, looking for more missing parts… you get the picture. Then, when our time’s up, we pull all the information together, slap on a cover letter explaining all the approaches we took and why we’re including what we have, and then proudly send it along to our client.

This, of course, does a huge disservice to most clients. If they wanted information overload, they could Google it themselves. Clients ask an info pro or researcher to help answer a question because they have confidence we can not just find the best information given the time frame (and budget, if applicable) but distill it down to something that enables the client to take an action, finish a project, complete a presentation, or otherwise move on to the next step in their work.

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What does a “value-added deliverable” look like?

Infopreneurs know that their value lies not just in what information they find but what they do with the information before they send their deliverable to their client. We often talk about the need to create value-added deliverables, but what exactly does that mean? Isn’t everything you do added value, just because it took your skills and expertise to find the information?

Actually, value-adding is more than “merely” finding the information. It means transforming it into something more. One metric I use to evaluate a deliverable:

  • If most of what my client reads is my own writing, I’ve provided added value.
  • If most of what my client reads is others’ writing, I’m providing little value.

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Seven Traits of Thought Leaders

It’s always more effective for a solopreneur to attract clients rather than chase after them. Cold calls and cold emails are usually unwanted, most likely not immediately relevant to the recipient, and often filtered as spam. Building a reputation as a respected expert in your field, on the other hand, can be an efficient way to attract clients who need, value and will pay you for your services. Following are seven traits that successful thought leaders develop.

Be curious. Read news sources that cover trends in your industry and reflect on what impacts new developments will have. Attend conferences; the conversations and serendipitous meetings enhance your credibility and expand your horizons.
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Are you really hearing your client?

Quick—think about the last time you interacted with a client. It probably felt pretty straightforward. Your client tells you what they need, you talk about any details, and the conversation is done. I recently had an experience that reminded me that every client interaction comes with layers upon layers of assumptions that we often miss.

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Where will AI show up next?

Ever since I posted in LinkedIn about the impact of artificial intelligence on the information profession, I’ve started seeing AI everywhere. And, as predicted, it’s not taking over our jobs – it’s automating something we didn’t realize we could automate. AI in Google Mail is already sorting the spam from our inbox and suggesting content as we compose messages. I’ve noticed this as I started using the Google Messages app, and it’s definitely strange. Here are three recent text conversations and Google Message’s prompts:

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Outcome-oriented taglines

As I was driving the other day, I passed a panel truck for Panorama, a local company that handles landscaping and maintenance services. Their tagline?

Enjoy life! We’ll manage the details

Like my favorite tagline from The Cleaning Fairies, We give you your weekends back, and Old Dominion Freight Line’s Helping the world keep promises, it focuses on why their clients would use them, not what they do or how they do it. Landscaping, housecleaning and trucking are three service professions that can be seen as commodities, just as many solopreneurs can feel like they are competing with the cheapest alternative on the web. By focusing on their commitment to their customers’ outcomes, they’re able to differentiate themselves from their competitors.

400 hours to profitability

Malcolm Gladwell, author of Outliers: The Story of Success, advocated the principle that it takes 10,000 hours of what he called “deliberate practice” to become an expert in your field, whether it’s programming, performing music, or playing basketball. Subsequent studies have called his premise into question and, in any event, not all of us aspire to become the next Bill Gates, Yo-Yo Ma, or Michael Jordan of our field.

However, I believe that a version of this metric applies to infopreneurs, both those just starting their business and those who are pivoting to a new market or providing a new service. Based on hundreds of conversations I’ve had with fellow infopreneurs, I believe that it takes 400 hours of work to get a business to its first paying client or its first client in a new field.

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Procrastination: last best moment or stubborn toddler?

Procrastination has so many negative connotations; it’s often seen as an indicator of a lack of self-control or inability to manage your time. As someone who <ahem> does some of her best work under deadline, I have learned to distinguish between strategic procrastination—what I call finding the last best moment to address something— and simple avoidance of something I just don’t want to do, when my inner two-year-old wants to stomp her feet and say “you’re not the boss of me!”

Here are the clues I look for when a deadline looms and I’m still not working on the project.

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