Consulting assignment life cycle 17: consulting as a business, and ...

This is my seventeenth installment on consulting and the consulting assignment life cycle (see my Guide to Effective Job Search and Career Development ? 2, postings 225-240 for parts 1-16.) I began this series with a general discussion of consulting as a career move then proceeded from there to discuss a set of issues related to the consulting assignment, and from landing one through its completion. And I ended that with at least a brief discussion in Part 16 , on preparing for a next step and moving on to a next assignment. In that regard I note here that working on a single consulting assignment means working on a job. Developing a continuity of business with a flow of assignments, and development of an ongoing consulting practice means developing consulting as a career, or at least as a career-level step.

Consulting, and certainly consulting through a succession of assignments can also be considered as running a business. This clearly applies for consultants who have stand-alone private practices. But I would argue that professionals who work as consultants for others should think of their own work as managing their own business too ? and whether they work in-house for a single employee, or for a larger consulting business and as a member of a consulting team.

? Every working professional and in fact everyone who works for a living should take explicit ownership of their own careers, and responsibility for managing them ? and even if they find themselves in what should be a safe, stable and reliable long-term situation with an employer that would simply keep them on until they reach retirement. Change and the unexpected can happen, and that can come from an employer or from outside circumstances. So everyone working should be prepared for the need to face change as it can and does arise. That, I add, has been one of the core lessons running through the more than 270 postings that I have added to my Guide to Effective Job Search and Career Development and its Part 2 Continuation leading up to here.
? And for the same reason, everyone who works should think of themselves as working for themselves, and even when they find great satisfaction and support from working for a larger business and with an established, long term team.

So I turn to the issues of managing a consulting career as running a small business with this posting. And I begin that by considering money issues as bottom line, financials and profitability are the essential long-term criteria for business success ? and of consulting success.

This posting is in fact the first of what might be considered a sub-series within my Consulting Assignment Life Cycle series. And in keeping with my approach to starting a new series per se, I am going to begin here by laying out a basic organizational framework for what is to come and by outlining the general structure of issues that I will address. And I begin that here by noting that financial issues for consultants can be conceptually viewed from at least two distinct perspectives and that I will address both of them:

? Whose financials are being considered ? your own as a consultant or your client?s as you work with them and within their budgets?
? What is the nature of the consulting practice that you offer your serves through? That impacts on what financial issues you have to focus on and with what priorities.

I begin here with the first of these two bullet points and with consideration of the client?s financials and their understanding of them. And I begin by noting a point that should at least sound obvious and even trite when stated as a simple abstraction:

? Good, effective consultants offer solutions and resolutions to client problems ? but more than just that they offer cost-effective results from their work done.
? A technically more perfect solution is not going to be appreciated or valued if it comes at an unacceptably high price, and either up-front, or long-term for its maintenance.
? So working effectively as a consultant means working within the framework of your client?s operational systems and processes,
? And within the framework of their operating budgets plus any generally short-term special projects expenditures that they authorize for your direct efforts per se.

When you understand your client?s financial perspectives and priorities, you know how to better present yourself as a preferred consultant choice for work in your areas of expertise and interest. This information can serve as a road map for securing follow-up work with a client that you have successfully worked for at least once. And if you can find this type of information out as part of your basic due diligence, you can more effectively present yourself as meeting their needs for a first assignment with them too.

? Remember that businesses hire consultants because doing so would be more cost-effective than trying to carry out the work of an assignment from in-house. So this is always important to the client and prospective client. Make their financials important to you as a consultant too.

There with a second fundamental point that I would raise here that as a simple abstraction should also seem obvious ? but that can easily be lost track of in the day to day details.

? If your work has to be competitively cost-effective to your clients, and both in comparison to in-house and other non-consulting options and in comparison to other competing consultants and their offerings, your work has to be cost-effective for you too.

And with this I turn to the second perspectives bullet point and the type of consulting practice you work within, repeating the three basic options as outlined in Part 1 of this series:

1. Stand-alone, independent consultants who function as independent small businesses.
2. Team member consultants ? employees of consulting firms that can in and of themselves be anything from relatively small businesses to large corporations with a complex and even multinational presence.
3. In-house consultants who function as consultants within a single, generally large business but who are formally placed as employees of those businesses. These are in-house employees who are moved for their expertise to work with in-house clients across the lines on the table of organization and outside of their usual flows of management and supervisory control and oversight.

I am going to begin this focusing on team member consultants who work for larger consulting businesses, and in-house consultants and will then switch to discuss the sometimes larger and more comprehensive set of financials issues that stand-alone and small business consultants have to deal with.

In-house employees and managers frequently have explicit spending authority and budgets. They may or may not have to account for every penny of this and they may need prior approval for certain types of expenditures or for individual expenditures over some agreed to threshold limit. But many employees and more managers have operating budgets that they at the very least have a significant voice in, in determining when and how this money is spent. Team member consultants and in-house consultants can also be given what amounts to budgets that they have spending decision-making control over, and certainly where that spending would explicitly fit into their completing identified aspects of an assignment ? and both from their direct clients? funds and budgets and from their direct employer?s budgets. And both in-house employees and managers, and consultants have to seek out approval and certainly for expenditures outside of any discretionary budget limits that might be placed under their control.

? It is vitally important that consultants know who they need approval from for what expenditures, and where monies are coming from and supposed to be coming from for what, and certainly for any expenditures they have to sign off upon.

This is important. If you work for a third party service provider consulting firm as a member of a team or as a team leader, or if you work as an in-house consultant, on the books as working for one supervising manager but in practice working for in-house clients you need to know what lines on the overall budget that you expend from in doing your work, are paid for from where. And you need to get explicit sign-offs and agreements from the right people for the right expenditures and certainly where you might be exceeding their discretionary spending limits ? which means you have to know what those are.

? You work as a marketing consultant or an information technology consultant, a sales consultant or offer some other form or area of expertise. But whatever you do as to the specifics of your assignments, you always need to ground your work in the relevant financials, and on who pays for what and with what budgets.

I am going to turn in my next series installment to consider the stand-alone consultant, and the consultant?s own expenses and cash flow issues as a small business. Meanwhile, you can find this and related postings at my Guide to Effective Job Search and Career Development ? 2. I have also posted extensively on jobs and careers-related topics in my first Guide directory page on Job Search and Career Development.

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