How to Succeed in the Age of Going Solo

From the Wall Street Journal | Feb 8, 2010 | By RICHARD GREENWALD

Anybody can become a consultant. But not everybody does it well. Here's what you need to know to thrive.

Welcome to the age of going solo.

The Journal Report

Today,
with unemployment rates hovering at 10%, and all our worries about the
job market rooted in the moment, we are in danger of failing to see an
important longer-term trend: More Americans are working as consultants
or freelancers, either having given up or been forced out of the
salaried world of 9 to 5.

It's a trend that began after the economic downturn of the late
1980s, as many laid-off professionals became consultants. Then it
seemed temporary, though, tied to bad times. Evidence now suggests that
this is our new economic condition. Today, in fact, 20% to 23% of U.S.
workers are operating as consultants, freelancers, free agents,
contractors or micropreneurs. Current projections see the number only
rising in coming years.

The implications for the American workplace are profound. Imagine
one in four workers, of all collars, working on a contingent basis.
Whole career paths and professions have shifted from stable full-time
jobs with definable career ladders and benefits to almost completely
contingent work forces that shift from project to project.

We can rightly bemoan the loss of security, the shifting of economic
risk from institutions to individuals. But crying foul will not change
the circumstances that many Americans find themselves facing. Righteous
indignation will not turn back time. We can, however, better prepare
ourselves for the future.

The image of the freelancer is too often that of the struggling
journalist or writer, who needs to wait tables to pay the rent. No
doubt there are many such examples still out there. But there also are
plenty of consultants and freelancers who are earning real income and
enjoying real success in their careers (as well as redefining what it
means to be a success).

So, what do these thriving solo artists have in common? What is the
recipe for their good fortune? My research points to five ingredients
to keep in mind.

Think Long Term

Too many freelancers see their condition as
only temporary-one that will go away as soon as economic conditions
improve. It's just a stage between jobs, they figure.

Jean-Francois Martin 

Some
of them may be right. But the odds are that most are wrong. They're
going to be on their own for a long time. So freelancers need to think
in terms of the long haul, preparing for a marathon, not a sprint.

Understand: This isn't easy. Many of these people have known only
9-to-5 jobs, and it can be scary to think of freelancing as all there
will be.

Scary, but necessary. Because if a freelancer views the condition as
temporary, it's almost a guarantee that however long it lasts, it won't
go well. Unless you think about it as a job itself-requiring time,
investment, thought-you won't get much of a return. Waiting
for business to find you is not something successful consultants do.
Clients know a halfhearted attempt when they see one.

One recent consultant in the financial-services industry told me
that the day he was fired, he got a new set of business cards, launched
a basic Web site and got a new cellphone for business. He already had a
home office and had started making lists of contacts. He knew that he
might be consulting for many months, and he decided to prepare for it
as a profession-not something he would do on the side to get by.

The preparation has paid off: His consulting income has already reached 80% of his old salary.

The consultants and freelancers who are most successful offer a
technical skill or expertise that is too expensive or infrequently used
for companies to keep in-house. Perhaps it's a short-term technical
project, such as implementing new accounting software, or a temporary
graphic-design project. Such consultants demand greater salaries, and
since the demand is only temporary, it is more efficient for the firm
to hire this talent short term.

Most
important, finding the next assignment cannot be done at the expense of
retaining and enhancing these skills. Cutting-edge expertise is vital
to long-term professional health. Successful consultants don't let
their skills coast, even for a short period. There are simply too many
consultants waiting to take their work.

Typically, consultants keep their edge by attending workshops or
training courses. But the most successful often add another key element
to their training: They teach-whether at a regional business college,
through university continuing-education programs or through workshops
given by professional associations.

At first, it sounds counterintuitive to train others to do what you
do. After all, you're creating more competition for yourself in the
very community in which you work. But teaching offers four big
positives for consultants.

First, it provides some income, though admittedly not much. Second,
it's a way to network, because sometimes students can become clients or
lead to clients. Third, the teaching looks good on a résumé, giving
consultants credibility in the marketplace and a way to stand out from
the crowd. And fourth, if you're going to teach somebody the latest
skills, you better have those skills yourself. So teaching forces
consultants to stay current and sharp themselves.

I talked to one consultant who is an expert in change management. He
teaches in a continuing-education program for a local university, and
says it is time-consuming and pays poorly. But he says that when
companies are looking for a consultant, they often take the fastest
route: They search for someone who is teaching at an area college or
university, figuring that person must be reputable.

So, he looks at his time teaching as the equivalent of advertising.
In addition, he says, sometimes his students go back to their companies
and are in a position to hire a consultant. And he gets the call.

Join a Network

The image many of us have of the lonely consultant toiling on his or her own is touching. And dated.

Most successful consultants are in a network or community of
consultants. These networks are important sources of new clients; most
consultants, in fact, say they get as many clients from these networks
as they do from client referrals. What's more, an increasing number of
consultants share work, taking on bigger projects that require more
hands. In this way, teams of consultants can function like a small
boutique firm.

One former public-relations vice president, now a crisis-management
consultant, shares an office with three other consultants. They all
operate on their own, but she says in many ways they also function as a
traditional office. She even refers to them as a "federation."

Recently, one of her office mates was consulting for a company that
was concerned about the possibility of a minor scandal. So her office
mate recommended her as a crisis-management consultant. She was hired.
And while the scandal blew over, the company now will come to her in
the future if they need crisis public relations.

Beware, though: You don't want to cross a network. These communities
of freelancers often have their own unwritten rules, and too often
consultants find out about these rules only when they break them.

One network, for instance, had an informal rule about using only
those in the network for all referrals. One software consultant ran
afoul of that rule when he referred work to someone outside of his
network, because he felt it required expertise that none in his circle
had. Suddenly, his own referrals within the network dried up.

The lesson: With social networking and the constant contact of email
and texting, word of a perceived violation spreads rapidly. While we
assume there will be office politics in the traditional workplace, we
should not be surprised that it exists in these networks. Freelancers
are free from much of the 9-to-5 world, but apparently not the
personalities of colleagues.

Have Your Own Space

We have long been told that one of the
joys of working on your own is being able to putter around in your
pajamas and bunny slippers. And such flexibility is, no doubt, an
attraction of consulting.

But there's a limit, and successful consultants say that having a
work space separate from your living space is crucial. Clients do not
want to have an important phone conference interrupted by a nagging
two-year-old, a TV in the background or the sounds of street traffic.
Most freelancers I spoke to have a space in their home that is solely
for work-a bunker, as it were.

Others have started using shared spaces that provide a quiet space
and a cubicle or desk to call your own. These spaces, called
co-offices, often have other incentives. They give freelancers a place
to go, which helps them keep schedules. They usually also provide a
receptionist service, so someone always answers calls. And they provide
a sense of workplace that is something many consultants complain about
missing.

One financial adviser who lost his job about three years ago became
a financial consultant. He worked from home. But, because he had a
small apartment and young children, he found himself increasingly
working in the Starbucks around the corner. He quickly discovered that
clients wanted a level of professionalism that did not include the buzz
of an espresso machine.

He subsequently began to share a suite of offices with a lawyer and
mortgage broker. They share a receptionist and a conference room, and
split expenses for a fax and copier machine, as well as broadband
Internet access. He has his name on the door, and a place to meet
clients. What's more, the lawyer has recommended his services, so he
has new clients.

Think Like an Entrepreneur

Here's probably the most important ingredient that distinguishes the most successful consultants: They think like entrepreneurs.

Too often, freelancers drift from project to project. That's a
mistake. They need to have a business plan or mission statement. If all
they do is take everything that passes over the transom, they will be
viewed as a nonspecialist in a world of specialists.

Consultants are known for the work that they do, and this often means the work they don't
do. With a mission statement and business plan, they can decide if a
certain job is worth it. Sometimes the short-term gain in income
becomes a long-term loss in reputation.

This doesn't mean you should starve: Sometimes, any work is good.
But too many consultants say yes to anything that comes along, so when
the perfect project arises, they might be too busy to take it. What's
more, in this competitive world, prospective clients want to know what
projects you're working on. If they aren't impressed, they may not hire
you. So being able to say no to certain work, referring it to someone
else, is a sure measure of a certain level of success.

In interview after interview, I was also shocked by how unprepared
so many new freelancers were in organizing their businesses. Few used
even simple invoicing software to track their billing, while many
mingled their personal and business finances, and didn't keep good
records for taxes or expenses. They did not think of cash flows, future
investments or downtime. They lived in the moment, which for a business
is a recipe for disaster. Developing a mission statement and code of
values, something businesses do regularly, will help consultants
develop a better sense of what they value, and then they can steer
their business toward their goals.

- Dr. Greenwald is a professor and dean of the
Caspersen School of Graduate Studies at Drew University in Madison,
N.J. He can be reached at reports@wsj.com.