How to Do Consulting on the Side

consulting startup
Businessman Consulting as a Side Job

Doing consulting work on the side while you are employed by another company is an excellent way to earn extra income, increase your skills, and prepare to become an independent consultant. Some employees consult on the side in preparation for going independent. This blog and the Related Information links at the end will give you a head start on how to do consulting on the side.

If you stay an employee and consult on the side you earn extra income, broaden your career skills, and strengthen your professional network. If you decide to go independent, consulting is a great low-risk, high-reward career. But whichever way you go, you need to plan and prepare.

ATTENTION: In all cases, whether you are consulting on the side or quitting to become an independent consultant, check your employment contract and state laws to insure you do not violate non-compete and trade secrets laws. Only a few states such as California, North Dakota, Oklahoma, and the District of Columbia fully recognize that non-compete laws take away your human rights to work at your best livelihood.

Quitting Your Employer to Consult without Preparing

While it is tempting sometimes to quit an inept employer and jump into full-time consulting, doing that significantly increases your risks. Consulting is a low risk, high reward career but it works best to plan and prepare.

There is only one advantage to quitting your employer and jumping to full-time consulting without preparing that I can think of,

  • You are forced to immediately focus and commit.

The disadvantages to quitting without preparing or consulting on the side are,

  • You need a minimum of 3 to 6 months savings to cover basic salary on a budget. If you did not prepare it can take up to two years to equal your previous income and benefits.
  • You need to pay for health insurance. The USA consistently ranks at the bottom of industrialized countries for its healthcare system. If you are in the USA, immediately check your COBRA (carry over) health insurance status with the HR department and state employment. All states require businesses with more than 20 employees to give COBRA, but it also depends upon your employer’s type of business.
  • If you can’t get consulting clients immediately you may be forced into hourly freelance work. This will delay moving into consulting.
  • Startup referrals usually dry up within the first year. Without a marketing, promotion, and sales system, you can fall into the feast-or-famine cycle.
  • Once you are trapped in the feast-or-famine cycle it is very difficult to find the time and mentoring to build the strategies, tactics, systems, and tools you need to build a highly successful consulting business.
  • Working overtime to build the business structure and do paid client work puts a strain on your family and you.

Consulting on the Side

You can do consulting on the side while staying employed if your employer approves or you are consulting in an area where there is no conflict. This also gives you time to prepare your business structure if you plan to go independent.

Consulting on the side has the benefits of,

  • Finding out whether you like consulting.
  • Validating the demand for your niche and consulting services.
  • Earning extra income to fund your startup.
  • Building business and marketing systems before you start consulting full time.
  • Building your professional image.
  • Expanding your professional network.

The downsides of consulting on the side while employed are,

  • It may violate your employer’s HR policies. You could be fired or branded as disloyal and unethical if you are caught consulting without your employer’s agreement.
  • It can mean a lot of extra hours. That can be a stress on you and your family.

Consulting on the Side Checklists

The following checklists will help you prepare for consulting on the side whether you remain as an employee or plan to quit and go independent.

Preparing While Employed Checklist

Preparing for consulting while you are employed accelerates your time to full capability, saving you time and money.

  • Identify the strategies, tactics, systems, and tools you will need in the startup phase of consulting. Download the Consulting Startup Checklist and USE IT.
  • Build your professional network.
  • Join local industry associations.
  • Volunteer for association boards and get known.
  • Attend meetings and test niche ideas.
  • Identify and validate your niche and services. One way to do this is with interviews of ideal clients or by testing topics for speeches and articles with trade associations. 
  • Create and validate your ideal client profile.
  • Continually build authority and credibility by speaking at association meetings, writing blogs and trade articles, and giving webinars.
  • Build your mailing list.
  • Register your business entity with local and state government. In some types of consulting you may need a legal entity and business insurance to protect your liability.
  • Open a business checking account to keep all business transactions separate from personal even if you remain employed.
  • Prepare checking, accounting, and taxes separate from your personal.
  • Get testimonials for your work from your colleagues, partners, and clients.
  • Get certifications and credentials to increase your authority and capabilities. Many college and university courses now have free courses through MOOCs. Certification and college credit requires and additional fee. Courses are from many major universities such as, Massachusetts Institute of Technology, Harvard University, and University of California, Berkeley.
  • Accelerate your startup speed by joining the Consulting Mastery Series™ of courses and getting step-by-step instructions and coaching on consulting strategies, tactics, systems, and tools. Members have said it saved them 5 to 10 years of work.
  • Lead your family in your first major consensus exercise. Have a family discussion and agree on work/life priorities. Reduce family stress by coming to a consensus about your hours and what days and times are reserved for family time.
  • Check for consulting sub-groups in your national industry associations. The Institute of Management Consultants has chapers internationally. In the United States, check with the Institute of Management Consultants for regional groups. In the San Francisco Bay Area check with Bay Area Consultants Network (BACN).
  • Never use your employer’s time or equipment for your client work. Not only is it unethical, you will be fired.

Preparing While Employed and Planning to Quit Checklist

A great deal of startup preparation can be done ethically prior to quitting your employer. By preparing and doing consulting on the side prior to quitting, you can leave your employer and immediately start your own robust independent consulting business.

  • When you quit your former employer, get a copy of your employment agreement from Human Resources. Check for a non-compete clause for your industry or skills. Also, check if you can be held liable for violating trade secret or intellectual property laws, for example, inventions you create on your own time.
  • Keep a list of all contacts and networking connections. Have a contact and referral rejuvenation plan ready to go into action when you leave. Use scripts from our Consulting Mastery Series ™ of courses to reach out and reconnect.
  • Draft a new LinkedIn profile, but don’t post it until you quit.
  • Draft a professional website using our Cornerstone structure, but don’t publish until you quit.
  • Write high-value blogs on your niche topics, but don’t publish on your site until you quit. Use Pareto’s 80/20 Rule to write the 20% of blogs that have 80% impact on readership and Google ranking. The Consulting Mastery Series™ shows you how to find these.
  • Write case studies of past work, employed or independent, but don’t publish until you quit.
  • Publish professional content on a weekly schedule rather than all at once. This makes you more memorable and gives you a time buffer.
  • When you quit, if you have a good relationship with your formeremployer, let them know you are consulting and ask if you can contact prior clients, partners, or suppliers. In some you can build an excellent relationship with your former employer’s sales and support team that benefit everyone.

The Consulting Mastery Series ™ of courses guides you through these steps and more with videos, templates, scripts, and coaching.

Getting Ready to Consult

As a recovering perfectionist I will warn you that you may never feel completely ready to start consulting. Go through these checklists, take a deep breathe, and go to it!

Learn More on this Main Topic:

How to Start and Build an Independent Consulting Business

Learn More in Blogs on this Topic:

What is a Consultant?

How to Start and Build a Consulting Business

 Starting a Consulting Business Checklist

Do You Know the Difference Between Average and High-Income Consultants?

Are You as Satisfied as Most Consultants?

How to Get More Consulting Clients

9 Consulting Fee Structures to Boost Your Income

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