Practical Information -
Consulting Methods & Practices
Updated:  Monday, December 14, 2015 04:46 AM

What is a Consulting Engineer?  -- What is a P.E. License?  -- Correspondence to other Consultants     
So You Want to Be a Consultant    --    Consulting Methods & Practices   --     Dave's Business Journal

Promoting your Business -- Business Tools -- Home Office -- Business Finances -- Business Practices
Business Proposals -- Survival Techniques -- Business Operations -- Benefits of Consulting
Only YOU Can Decide if Consulting is Right for YOU

Ways to Promote Your Business

  • Try to emphasize one or two disciplines as your areas of expertise.

  • Write journal articles and  publish circuits.  These efforts lend credibility, but don't generate business.

  • Always network, network, and network.

  • Join or organize a local support group for consultants.

  • Secure a business phone line and place a Yellow Page ad.

  • Develop a Web site.

  • Prepare a business brochure.

  • Plan to make a lot of cold calls.

  • Use a data base management program to begin compiling a list of potential clients.

  • Make a portfolio showing photos of some of your work.

  • Have a list of references handy and ready to email, mail or FAX.

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Necessary Business Tools

  • Install separate fax/modem telephone lines.

  • Acquire a cell phone.

  • Purchase your own computer, perhaps a laptop.

  • Use a program like Quicken to help with your accounting books.

  • Print quality business cards.

  • Talk to your account regarding the pros and cons of becoming a corporation.

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Home Office

  • If you plan to work out of your house, you will have to establish a work routine and not be distracted by your family. One person reportedly dresses each day as though they were going to the office.  Another consultant even puts her purse next to her office desk. Personally, I like the freedom to wear whatever I feel like when I'm at my home office.

  • You will need a place to meet with clients. A clean office on the main floor works. The office should have close access to the front door. Leading a client through your entire house to an office tucked into some dark corner will not appear to be professional.

  • As alternative to being clients to your home office, suggest   meetings in hotel lobbies, library conference rooms, quiet restaurants, etc.

  • Plan for at least three phone lines. One for home use, one as your fax/modem line and one for business. You can buy two line phones, so you can answer either line. It is a waste of time and money if you force your clients to call you first, to let you know when they are sending a FAX. Some automatic system that can detect when a FAX is being sent are available and do work, but I still think that a dedicated FAX line is much better.

  • Purchase  a copy machine, scanner, laser printer, and answering machine to allow you to work more efficiently.

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Business Finances

  • Set up a business checking account and apply for business credit cards. This keeps bookkeeping clean.

  • Print envelops with your company name etc.

  • Discuss insurance needs -- liability and changes in your homeowners policy -- with your agent.  You may also want to insure some expensive equipment such as computers that you use for business.

  • Ask your accountant about tax deductible expenses and government filings.

  • Establish a line of credit with a bank might ease the cash flow.

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Business Practices

  • Know your limits, don't undertake a project that you know you will have trouble with. If necessary, team up with someone else to fill in those areas you can't complete.

  • Price your services right -- don't overcharge or undercharge your clients. They do not want to pay you for your education. You may have to spend extra time without pay to do some jobs it they require you to learn something new. But, although it might be awkward, you can go back to the client if things do become sticky about what you agreed to do for how much. This can especially occur when the client is constantly making changes.

  • Send clients a reminder letter along with a new copy of your invoice marked overdue if payment is not received in a timely fashion.

  • Use an invoice form that includes a description and list of items charged to them.

  • Pay any subcontract work as soon as it gets done instead of waiting until you get paid. It hurts your cash flow, but it makes your contractors wanting to do more business with you later.

  • Know when to throw in the towel.

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Business Proposals

  • Never spend more than a few hours putting together a proposal. Don't let the potential client talk you into giving him a detailed proposal that he can use elsewhere. If you consider yourself a professional then you should not have to give away too much of your time.

  • Divide up your estimate so you can Invoice your client at regular milestones. Try to make the milestones so no more than a few weeks elapse. Make it clear at the beginning of the project that you can't finish project unless you are paid within 15 days for new clients and 30 days with old clients.

  • Give the client a detailed cost estimate up front with some indication of those areas you are not sure about and therefore can't be absolute. If you are not sure of the time you will need, assume it will take you longer than your first estimate. It almost always does.

  • Multiply the cost of the materials by 1.5 to cover taxes and shipping charges.

  • Set a flat per hour rate for all tasks -- don't charge them less for drafting, technician work.

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Survival Techniques

  • It is a sure bet that you will find yourself without any work during certain times. Such conditions can last from days to months. Again, you should have enough money set aside to weather such storms. Even if you have the jobs, it still may take a month from the time you started a project to when you get paid for it.

  • Some banks can give you a business loan that can be a second mortgage on your house and can give you the needed buffer in slow cash flow times.

  • Use the time to promote yourself. Publish some magazine articles. Talk to other consultants and let them know that you are available.

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Business Operations

  • Set regular office hours

  • Work during those hours, avoid the urge to get a hair cut or run errands during office hours

  • Return all phone calls

  • Be honest with clients -- tell them when you can't help them

  • Guard inventors who want to share profits and not pay your fee.

  • Design a logo and register your company name.

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Benefits of Being a Consultant

  • Immune to sudden layoffs -- but not from work shortages

  • Taxes advantages, deductions for parts, tools and equipment

  • Can decide whether or not to accept a consulting project

  • No dress code.

  • No drive to go to work

  • Flexible working hours

  • You can take responsibility. Your own boss, you get all the credit for a job well done.

  • Variety of projects, forcing you to learn new things

  • After being in business for a while, you have more job protection,

  • More respect from clients, expert,

Only You Can Decide

If you have made all the necessary plans, then the best time to leave your day job and launch your consulting career is when you have a nice juicy consulting project lined up. That way you can hit the ground running.  If in spite of all the things I just told you, you are still determined to press forward, then I will help you get started. Hardest job is figuring out how much something is going to cost. Without some experience everything is going to be a guess.

The first thing you must do is truthfully evaluate yourself to see if you have what it takes to be a consultant. You will need to evaluate your financial, social and family situation before making the plunge. You need to go into the business for the right reasons. Don't expect it to be easy. 

Ask  yourself:  Do you have the education, experience, social skills needed? Do you have support from your family and friends? Do you have money in the bank that you draw on to get your business started?

 

 
 
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