Launching a consulting practice.

Considering starting a consulting business? Here are some considerations from a practicing consultant.

Downsizing and concentration on core businesses by large corporations have had two major impacts on the launching of consulting practices: first, a increase in the number of experienced

How does one launch a new consulting business? Every business start-up probably has its own trajectory. Nevertheless, there are a number of early decisions that need to be made and hurdles to overcome that are generic to any business, large or small.

In my case, consulting occurred late in my career, as an alternative to full retirement and life on the golf course. I can share a few experiences that might be of use to those considering a similar task. Here is a five-point list of items to consider.

(1). Define your Business

As in any new venture, a business plan is essential, either written or simply well implanted in the mind of the owner. The key decision is to define the consulting services that you intend to provide. If you are an engineering specialist, this decision may be easy. For example, an expert in rotating equipment may decide to offer this expertise broadly to industry through a focused advertising initiative. Providing more general management or operational expertise is usually more difficult but can be facilitated by using past employers and customers as initial clients.

(2). Differentiate Your Product Offering

The number of consultants offering generic business services is large and the competition is keen. The ability to define a specific approach or "tool" will add considerable strength to your consulting practice. This can be done in fairly simple ways. For example, even providing a name to a particular service will help to differentiate your product. A short phrase clearly stating the novel elements of your business will help communicate your message to prospective clients. In my case, the consulting practice initially focused on the evaluation of R&D organizations with respect to "Best Practices", and later evolved into a combination of benchmarking and the assessment of non-tangible assets. I have been able to establish a trademark for the methodology I use, called Progrid. It is important to ensure that key documents and supporting materials are protected by copyright.

(3). Be Prepared to Do Everything

There is an enormous jump from working in a large company where wide ranges of supporting services are available to working independently with your own office. Be prepared to invest the money and time to handle the key chores of a fully functioning supporting office. A well-equipped electronic office can now be obtained for a modest cost. It will take time to become proficient in word processing, graphics, and desktop publishing but the capital investment for this is not huge. A high-speed computer, advanced software, electronic mail, and dependable fax equipment can now be obtained for considerably less than $10,000. If it is the business, rather than the scientific, world that you are serving, a key decision will be selecting between Corel Suite (with WordPerfect and Lotus) and the mighty Microsoft empire (with Word and Excel). I have used both but find that Microsoft Office 97 is used increasingly by my clients. The ability to exchange files with clients electronically is a "must". A modest investment in the newest electronic office and a few months of "sweat equity" will bring you to a level at least equal to most of the clients that you will be serving.

(4). Define a Supporting Network

This will likely happen naturally, but a few initiatives to seek colleagues who are "in the business" may add strength to your product offerings. There will likely be opportunities to bid jointly on projects and to combine with one or two associates on specific assignments. This usually starts as a very informal arrangement among associates, but could lead to the formation of a partnership, joint venture or even a new incorporated entity.

(5). Recognize the Benefits (and Trials) of a Home Office There are enormous benefits in operating from a home office. It reduces the monthly fixed expenses that can cripple a new business, but, just as important, it expands your ability to maintain contact with your clients. Time changes become irrelevant. You can work in real time with clients around the globe. A home office has the inherent problem of blurring the division between your working and private lives - in fact these may tend to become indistinguishable. I have no particular advice on this issue, other than to recognize the problem and work out your own individual solution. One of the benefits of a home office is the ability to choose times during the week for recreation and diversion. A colleague of mine says his son is delighted that his father can attend all his hockey games, regardless of the time of day. The ability to work on weekends and be ready for the needs of a client on Monday morning is a great asset.

Whether you have chosen to start a consulting practice through long-standing ambition, or have been thrust into the consulting field by external events, the opportunities to launch a new business have in some ways never been better. The combination of the electronic office and the extensive downsizing of many companies provide great opportunities "to go it alone". The feeling of control and independence can be exhilarating. The stress level is different and is mainly self initiated and therefore controllable. Consulting can be an exciting and rewarding career. Good luck to those considering such a move.

Clem Bowman, FCIC, is a member of the Order of Canada. Bowman has had experience in a wide range of technology endeavours. His current consulting practice involves the development and evaluation of technology strategies in the fields of energy, oil sands, biotechnology and the environment.