Tech To Consulting: Getting Started in Consulting For Tech Employees

Are you thinking about taking the tech skills you’ve learned as a full-time employee and going out on your own as a consultant?

Maybe you were caught in the recent wave of tech industry layoffs and aren’t so sure you want to start over as a new employee at another company.

Or maybe you saw a bunch of talented coworkers get let go unexpectedly and find yourself with second thoughts about the “security” of full-time employment.

Whatever the reason, you’re considering going out on your own for the first time ever and have questions about how to maximize your chances of success.

In this article, you will learn the dos and don’ts of going solo from the perspective of a software developer who has been consulting with clients and coaching independent professionals since 2006.

But first…

Here are some topics that won’t be covered in this article:

• Forming an LLC
• Applying for an EIN
• Getting business insurance
• etc…

These are all important things, but they’re general business considerations and as such, you can learn about them pretty much anywhere.

What we’re going to talk about in this article are the things you can’t easily find with Google because they are so specific to your situation.

Ready? Great! Let’s go…

Tech To Consulting Year One: The Free Ride

When you first go out on your own, odds are pretty good that you’ll have some early success landing your first few clients.

Why?

Because everyone you know will be rooting for you.

Your friends, family, and colleagues will put the word out. In other words, they’ll market you to their networks. People just love sharing the classic “take this job and shove it” underdog story.

This marketing “free ride” typically lasts about 12-18 months, at which point…

Things get HARD.

After a year or more of being on your own, you won’t have an interesting story anymore. You’ll have become just one more solo consultant desperately hustling for leads as their bank account dwindles.

This pressure creates an incentive to take desperate actions that feel awful in the short term and weaken your brand in the long term.

Things like:

• Bugging your connections for referrals
• Begging past clients for new work
• Buying mailing lists and spamming them
• Cold calling business you found on LinkedIn
• Wasting money on ineffective PPC ads

Yuck.

To avoid the stomach-churning stress of wondering where your next mortgage payment is coming from, you’ll want to spend a decent portion of your first year learning how to build a business.

Building a business is a skill. Like any other skill, it must be learned and can be improved over time.

The Craft of Consulting Business

When you were a full-time employee, you would show up on Monday and work would magically appear on your desk. You could focus exclusively on executing your craft to the best of your ability. And when the work was done, more would magically appear.

But when you’re on your own, the work doesn’t magically appear. Work (i.e., clients) shows up not by luck, but by design. Building a business is a skill. Like any other skill, it must be learned and can be improved over time.

Think of it like this…

Nobody knows on day one how to build a robust software application or how to design a delightful user experience or how to architect a fault-tolerant API. The same goes for building a business. It’s not intuition. You have to learn how to do it.

So…

To avoid going bankrupt once your “free ride” is over, you need to split your time between three big categories:

1. Delivery
2. Sales
3. Marketing

Finding the right balance between these three things – and getting better at each – is you learning how to build a profitable business.

Let’s define each, in order from least mysterious to most mysterious…

What is delivery?

“Delivery” is just another name for the kind of work you’re used to doing (i.e., it’s the stuff you did for your employer).

You probably enjoy doing it, and enjoy getting better at it. You probably imagined that delivery was how you’d spend all your time as a consultant. You might think, “As long as I do a great job for my clients, new clients will magically appear!”

Sadly, this is rarely the case. Without sales and marketing, sooner or later, there won’t be any delivery work for you to do. Which leads us to sales…

What is sales?

For the context of this article, here’s a useful working definition of sales:

Sales is the set of activities required to convert an interested prospect into a paying client.

For solo consultants, this is basically all the stuff that would happen AFTER someone reached out to you with a message like, “Alice said you’re great! Can we jump on a call to talk about working together?” and BEFORE they sign on the dotted line.

Things like:

• Following up with prospects
• Conducting sales meetings
• Writing proposals
• Negotiating deals
• Finalizing agreements

Some of these activities can take a lot of practice to get good at (e.g., negotiation). Others are more administrative and straightforward (e.g., finalizing agreements). And some are in-between (e.g., writing proposals).

Entire books have been written on these topics so it would be outside the scope of this article to go into more depth. The important thing to recognize is that 1. doing sales is not optional, and 2. It takes practice to get better at sales, so get as much sales practice as you can during the free ride year by talking to as many interested prospects as humanly possible.

But how do you attract interested prospects?

I’m glad you asked! Let’s talk about marketing…

What is marketing?

Marketing is the stuff you do to make potential buyers aware of your products and services.

(This is a pretty big oversimplification, but it’ll do for the purposes of this article.)

For a solo consultant in the tech space, your marketing activities could include things like:

• Speaking at conferences attended by your ideal buyers
• Guesting on podcasts listened to by your ideal buyers
• Blogging for websites read by your ideal buyers
• Writing for magazines read by your ideal buyers
• Publishing screencasts that would be of use to your ideal buyers
• Hosting a podcast that would be of use to your ideal buyers
• Running a webinar that would be of use to your ideal buyers
• Sending a newsletter that would be of use to your ideal buyers

Marketing done well is like gardening. If you want tomatoes six months from now, you need to plant them today and tend to them regularly.

You almost certainly would not do all of these things, and that’s totally fine.

My advice is to start out with one that is speaking-based (e.g., guesting on podcasts) and one that is writing-based (e.g., sending a newsletter).

Choose the marketing activities that are the easiest for you so you can do them each at least once per week, every week.

You might be thinking, “What? EVERY WEEK?! What if I get busy with client work? Surely I don’t have to market myself when I’m booked solid with work, right?”

Wrong.

It’s really easy to slack off on your marketing when you are busy with lucrative client work.

PLEASE DO NOT FALL INTO THIS TRAP!

Slacking off on your marketing leads directly to something called “the feast/famine cycle” and it is gut wrenching. Ask any experienced freelancer or consultant or agency owner about the feast/famine cycle and they’ll shudder at the mere mention of the term.

Marketing done well is like gardening. If you want tomatoes six months from now, you need to plant them today and tend to them regularly. Skip a week and you might end up hungry in a few months. The more weeks you skip, the more likely you’re going to go hungry.

Positioning For Consultants 101

Alert readers will notice that I used the phrase “your ideal buyers” repeatedly in the list of marketing activities above. Why did I do that? What do I mean by “ideal buyer”? Why would I care whether a buyer is ideal?

To answer these questions and more, I need to introduce you to the concept of positioning.

Okay, so what is positioning?

Positioning is a high-level marketing strategy used to make your business, product, or service more memorable.

For solo consultants, this is done by focusing your marketing message on a particular facet of your business, your offering, your target market, or some combination of the three.

Why does positioning matter?

If the messages you are sending out through your marketing activities aren’t memorable, then your marketing is less likely to attract buyers. Because of this, it’s very helpful to have your positioning worked out before you start publishing content into your marketing channels.

Nailing your laser focused positioning statement is the single best thing you can do to grow your business. It’s the foundation of everything.

In other words:

• Marketing without good positioning is not effective.
• Marketing with good positioning is effective.

What does a positioning statement look like?

Positioning statements can take many forms and they can be used to create a near infinite number of variations for different contexts (e.g., the headline on your home page, your email signature, the tagline for your podcast, etc).

The form I use to help people craft their positioning statement is something I call a Laser-Focused Positioning Statement (LFPS). It looks like this:

I’m a _______ who helps _______ with _______. Unlike my competitors, _______.

Now, just fill in the blanks to create your own laser-focused positioning statement.

Did you try it? Seriously… take out a piece of paper and fill in the blanks.

Seriously.

Paper.

Do it.

If you’re having trouble, don’t feel bad – almost everyone does. It’s brutal. I’ve had people actually start crying during this exercise.

If you didn’t have trouble with this exercise, you probably wrote something soggy like:

“I’m a UX professional who helps businesses with elegant solutions to complex problems. Unlike my competitors, I have 10+ years of experience adding value by building high-quality software.”

This is not a laser-focused positioning statement; it’s just clever wordsmithing that encompasses your vision of yourself, to yourself; it doesn’t communicate any value to anyone.

Here are a few good examples to get you started:

• I’m a Rails developer who helps dentists with older patients who forget appointments. Unlike my competitors, I use SMS reminders which work on both smart phones and dumb phones.
• I’m a Web designer who helps Fortune 500 retailers with abandoned shopping carts on their e-commerce sites. Unlike my competitors, I use A/B tests to focus on the bottom line instead of wasting time with arbitrary design changes.
• I’m a spider wrangler who helps horror movie producers with actors who are severely arachnophobic. Unlike my competitors, I once convinced Gwyneth Paltrow to attend a red carpet event with a live tarantula on her head.

See the pattern?

I’m a DISCIPLINE who helps TARGET MARKET with EXPENSIVE PROBLEM. Unlike my competitors, UNIQUE DIFFERENCE.

Nailing your laser focused positioning statement is the single best thing you can do to grow your business. It’s the foundation of everything.

Without a laser focused positioning statement, you’re wasting your time with marketing efforts like advertising, outreach, blogging, vlogging, podcasting, social media, webinars, etc.

But figuring out your positioning can take some time, which raises the question:

Should you wait to start marketing yourself until you figure out your positioning?

In a perfect world, yes. But in the real world, weak marketing is better than no marketing. The consistent practice of publishing content for folks in your target market can help you figure out what your positioning should be.

Marketing without a positioning strategy might be ineffective at bringing in lots of qualified leads, but it is a pretty effective way to figure out your positioning, which means it’s still worth doing. And besides, it’ll still probably bring in at least a few leads.

Tech To Consulting: Conclusion

Going out on your own for the first time is exciting and scary. Your network will probably get you enough work to survive for your first year, but this free ride won’t last forever.

From day one of your new business, spend time every week getting better at the non-delivery aspects of building a profitable business.

For most solo consultants, this is going to mean getting education, coaching, and real-world practice with sales and marketing.

Remember, you’re not just a consultant who does for clients what you used to do for your employer.

You’re a business owner now.

And building a business is a skill.

–

Jonathan Stark is a former software developer who is on a mission to rid the world of hourly billing. He is the author of Hourly Billing Is Nuts, the host of Ditching Hourly, and writes a daily newsletter on pricing for independent professionals.