Practical Tips for Self-Employed Consultants and Solopreneurs
Advice and Insight
The best time to raise your billing rate is on the cusp of something new — a new year, new project, new client. With the new year just around the corner, now is an excellent time to inform your clients. This article offers explains how to raise your rate, as well as some sample language …
Read MoreAs independent consultants, we’ve all probably worked remotely to some extent but as the COVID-19 pandemic continues, it appears that working virtually will be part of the “new normal.” Companies are figuring out their “work from anywhere” and/or hybrid models as the pandemic drags on and the “great resignation” threatens to lure employees away.
To complicate things further for consultants, clients may misperceive “checking in” as a waste of time and/or something they don’t want to pay for. Or worse, they may still have the mindset that if they can’t see the consultant doing the work, they might think they’re overpaying…
Read MoreThe easiest time to raise your rate is on the cusp of something new — a new year, a new project, a new client. With the new year just a few weeks away, now may be the perfect time. This article offers ideas of how to do this, as well as some sample language to use when notifying your clients.
Read MoreHiring a consultant can be a difficult decision for a client, especially when they’re going to be spending tens of thousands of dollars. They need to be sure that the person they’re hiring is competent, credible, trustworthy, and most importantly, effective.
Use short stories or mini case studies to build your credibility before you’ve even had a conversation with a prospective client.
Read MoreAs independent consultants, we’ve all worked remotely to some extent but now we are working virtually 100%. And likely, this isn’t temporary. Many companies are already saying they won’t require every employee to return to the workplace this calendar year. Some are considering shifting permanently to “work from anywhere”.
To complicate things further, many of our clients are learning how to work virtually for the first time and they may misperceive “checking in” as a waste of time and/or something they don’t want to pay for. Or worse, they may still have the mindset that if they can’t see the consultant doing the work, they might think they’re overpaying.
Given that consulting is relationship based, it’s imperative that we build credibility and trust quickly…
Read MoreThis month the PICA community has been focusing on sharpening our consulting skills so we’re reprising one of our founder’s most popular LinkedIn articles. First published January 2015, it’s just as relevant today as it was then. We’ve also expanded the original list of qualities from 19 to an even 20, and updated a few other things based the LinkedIn comments. Here’s to a your success!
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Let’s face it, not all consultants are created equal. Some can seemingly do anything with grace, style, and ease while others struggle to make anything happen. Over the last 20 years I’ve interacted with probably a thousand management consultants, from local independent practitioners to global “big four” advisors. Some are rock stars and some never will be, regardless of their education or what consulting firm they work for.
In a nutshell, a consulting rock star is someone who loves helping clients succeed, does whatever it takes to do so, keeps their word, effectively manages expectations, and produces A-quality work. They make the right things happen. They are smart, professional yet personable, excellent listeners with self-confidence, and…
Read MoreWe’re in an unprecedented situation because of the COVID-19 coronavirus, and the economic fallout has been drastic for many business sectors. For us as consultants, the effects are likely to be more gradual but our income will likely be affected.
This article explains your options for cash-flow relief, whether you need it immediately or in the near future, and how to get it. I have summarized how the new Coronavirus Aid, Relief, and Economic Security (CARES) Act applies to self-employed management consultants, whether you’re a single-person entity (sole proprietor, LLC or S-Corp) or if you’re a small business with employees or subcontractors. However, lawyers and accountants are still reviewing this 880-page law so it will be some time before we know all the specifics. Moreover, how it applies to you will depend on your specific situation. Nonetheless, this summary should help you decide whether to consider pursuing any of these options.
There are several ways to get some cash-flow relief to help you pay your bills in the near term as a result of the $2 trillion CARES Act…
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Recent and pending legislation around the country threatens our livelihoods as self-employed professionals. Here’s how to fight back! #RepealAB5 #NoProACT #ProAct #AB5
Read MoreOne of the benefits of being self-employed is paying less tax than you would if you were paid like an employee on a W-2 tax basis. If you’re smart, you’re getting paid on 1099 tax basis, deducting your business expenses, and contributing to your own retirement plan to lower your tax bill. (This two-minute video explains how this works.)
But California’s new law, AB5, is making it harder to qualify as an independent contractor and get paid on a 1099 tax basis. Even if you don’t work in California but do business with a national corporation, you’ll likely have to follow these new rules because …
Read MoreAs independent consultants running our own businesses, good marketing is critical. No one is going to hire an unpolished freelancer to help solve their business problem, especially if they’re going to spend tens of thousands of dollars. Clearly, a professional image is vital. A prospective client must see you as credible from the very first impression. We know this, yet most of us are cursed with the dreaded grey square on our LinkedIn profiles – the one that appears next to your current job listing.
Read MoreMost self-employed consultants I know have deep expertise in a certain function or industry, and nearly everyone would like to earn some extra money. If this describes you, check out what I recently discovered.
Read MoreAs an independent consultant, it’s vital that you convey professionalism at every step if you want to get hired at a great rate. Details matter, particularly when you’re making an initial impression. That’s why having a professional email address is a must, as is an eye-catching, effective email signature.
Read MoreThe easiest time to raise your rate is on the cusp of something new — a new year, a new project, a new client. With the new year just a few weeks away, now might be the time. This article offers ideas of how to do this, as well as some sample language to use when notifying your clients.
Read MoreIt was bound to happen. After 15 years and hundreds of contracts, I finally had a client that didn’t pay, and didn’t pay, and didn’t pay. For six months there was one lame update after another. “We’re working on it,” or “We’ve switched to a new process.”
Yesterday, my bank finally received the wire transfer. Here’s my story, what I learned along the way, and steps you can take if you find yourself in the same situation.
Read MoreAbout two months ago, the California Supreme Court issued a unanimous decision in the case Dynamex Operations West Inc. v. Superior Court that is likely to result in it being harder to qualify as an independent contractor.
More than ever, it’s critical that you take steps now to maximum your chances of passing what is likely to become a stricter vendor compliance process. Otherwise, it’s very likely that companies will demand that you do the work as a W-2 employee hired through a staffing agency. (Related video, “Friends Don’t Let Friends W-2”*)
Although this court decision directly affects only California companies, other states are likely to follow suit and use this ruling as a reference. At the very least, it’s likely to make employers in other States more cautious when hiring consultants as independent contractors.
Read MoreRecently I logged into my retirement accounts and was surprised (and pleased!) to see that I had crossed the million-dollar mark. I don’t consider myself rich. In fact, money is usually tight at the end of the month. Yet my bank account says I’m a millionaire.
How did I do this? How can other self-employed consultants become wealthy too? Reflecting on my years as an independent consultant, I’ve boiled it down to five keys to success. (Sidebar: People define success differently. To me, having a million bucks in retirement savings is only one part of my total wealth. I also have a comfortable home, I’m healthy, and I have terrific relationships with family and friends. But I digress.)
Read MoreLast August I wrote a blog post about how labels matter, specifically that you should make more money by calling yourself a consultant instead of a contractor. But it’s not just about labels and language. It’s not enough to simply replace contractor with consultant on your résumé and LinkedIn profile.
I’ve been studying the LinkedIn profiles of various contractors and consultants I know and reflecting on how they usually get their work. What differentiates the well-paid rock stars of consulting from the plug-n-play contractors? Several variables affect the person’s brand. They include prior work experience (internal with a company vs an external consultant with a firm), their consulting niche, and how they market themselves, but the real difference is how they find and frame their work.
Contractors find work through agencies or staffing firms while consultants are more likely to find work on their own, usually as a result of their professional network.
Read MoreDear Liz,
I have a quick question. I know a consultant who is going to do some work designing a company’s program for high-potential employees. The consultant has talent but not much experience. What hourly rate would you consider low, fair, too high? Can you ballpark this for me?
- Louis
Although the question is brief, a helpful answer is not. Pricing consulting services is notoriously difficult, particularly for self-employed consultants. You need to consider the real and perceived value of your services, expertise, and experience, as well as geography and market conditions. Several factors need to be considered:
Read MoreEveryone has questions about the sweeping tax reform that became law at the end of last year. As a coach and champion for independent consultants, I went on a fact-finding mission to answer two important questions:
Here’s what I learned after too many hours of research and talking with two CPAs and a lawyer. (Disclaimer: I am neither an accountant nor a tax lawyer, so I’m not qualified to give tax or legal advice. I’m simply trying to help self-employed consultants understand how the changes in tax law may affect them, so they — you — can have a more productive conversation with your tax professional.)
A. The answer to my first question is yes. It’s still better to be paid on a 1099 tax basis because you can still take business-owner tax deductions, possibly in addition to the new 20% deduction (more on that below), and you can still take advantage of better retirement options like a SEP-IRA to lower your taxable income. (See “Friends Don’t Let Friends W-2”TM for more information.)
Read MoreRecently I helped a consultant land a $420,000 consulting contract. That’s not a typo. It’s an 11-month project for one consultant: $320k in consulting fees and another $100k for travel expenses. I’ve excluded my company’s agency fee in these numbers; the actual budget was a bit larger.
Clearly this was a big win for the consultant. The client was pleased too since a global consulting firm working with his company quoted $660,000 for the same project. (See my related article, “Quote Your Rate with Confidence.”)
A project this big doesn’t just fall out of the sky. Why did the client contact me for help? The short answer: business development. The long answer: diligent business development that built a relationship over time. Rather than any one particular thing I did, it was simple actions over the course of five years. Those actions cultivated a trusting relationship with the client and, as a result, he was comfortable reaching out to me for help.
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This is where we post our latest content on how to be your best as a self-employed consultant. Nearly all articles are written by PICA’s Chief Advocate, Liz Steblay, based on her 25 years in consulting.
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