Starting a consulting business is a great way to venture into the world of entrepreneurship. If becoming a self-employed consultant is something you are considering, you can make a better informed decision by reading about some of the biggest pros and cons in the field:
Pros of Being a Self-Employed Consultant
The major thing to remember about consulting is that you, as the business owner, are selling your knowledge and expertise, not a product. This means that there are no costs involved with product development. Opening a consulting business isn’t expensive. You can run it from your home and inexpensively get the business online. Consulting has a low overhead. Another pro is that if you make it a priority, there’s plenty of opportunity for professional development. Consultants regularly attend conferences, webinars, seminars, and other training events to keep up with the latest information in their field. This investment in knowledge tends to translate to better customer service and more clients over time. Plus, as a side benefit to this, you will always be growing your network of professional contacts and potential clients. A third major pro to starting your own consulting business is that you will instantly gain much more control over your schedule and work/life balance. As a self-employed consultant you control your calendar. No one will be watching when you arrive at the office or when you leave. This increased freedom takes a lot of discipline, but it is a major reason why many people choose to become consultants.
Some Cons of Being a Self-Employed Consultant
Although the pros of consulting are great, there’s cons with any job. First, you become completely responsible for generating your own leads and sales. You must become great at marketing and advertising and have to focus time on self-promotion and sales. This can be stressful as many new consultants aren’t very knowledgeable or skilled in these areas. So there might be a learning curve for you and sales may start slow. The best advice here is to read books, take some course on these subjects and test ideas in the marketplace or even hire a consultant and evolve your strategy as you learn and grow. Another con is that travel may be quite extensive in the beginning. As you build your client base, you can’t be too picky. You likely have less say in the type of clients you can get and this may mean travelling far and often to meet with them. It’s an issue that many new consultants have to face early in their new careers. Try to combine in-person and over-the-phone meetings and have a plan to productively use your time without sacrificing the quality the client is getting. Lastly, a con of being self-employed as a consultant is that you have to take care of your own retirement and other benefits. This can be difficult depending on your financial status and how much you already have saved. Plus, you have to deal with paying your taxes differently. The Canada Revenue Agency has many resources available for determining what a self-employed consultant must do to stay tax-compliant. If you don’t feel comfortable or don’t have the time to do it yourself, hire a tax professional to walk you through the process. Many pros and cons must be weighed before making a decision to become a consultant. But, with enough research and planning the cons can be overcome. For the best advice, talk to friends or consultants you know to see what they consider the pros and cons of the business.