Today marks the seventh anniversary of Jarche Consulting. With my semi-sabbatical just beginning, perhaps it’s a good time to reflect on some of what I’ve learned about being a freelance consultant. Here’s my advice:
- Start out with some cash in the bank because cash-flow is absolutely critical. You need to keep paying bills through the slow times and it’s almost guaranteed there will be slow times.
- Don’t start until you have a paying client. If you can, keep your job until you know for certain that you have a contract. This will help make the leap and avoid early-stage desperation.
- Diversify. Much of my paid work is high value, high paying consulting. This is great but it can be sporadic. Find some lower-paying work that will help you through the tough times. This could be seasonal contract work, perhaps in a different field. Also look for sources of residual income. I just started allowing advertising on my site and I regret not starting sooner. A few hundred dollars a month could come in handy and it takes time to build this up. Start early [this revenue stream was discontinued. I now host a community of practice].
- Keep your expenses as low as possible and pay with cash whenever you can. The low cost of living in Sackville has been a real advantage. However, look into leasing business equipment because you can claim the entire expense and it helps to keep you cash-positive. I lease my computers.
- Be careful what you give away for free. Sharing everything may not be in your best interest. I’ve only recently learned this lesson, as I was fairly certain that the more I shared, the better it would be for business. That’s not quite what has happened.
- Make sure you understand where and how money is made in your field. How do clients make purchasing decisions? If brand-name consulting firms are preferred, you may have difficulty marketing your services. Find clients who prefer freelancers.
- Join forces with others. The best thing to happen for my business was collaborating with my friends and colleagues at the Internet Time Alliance. Not only is it better for marketing, I also have learned much from them.