5 pitfalls to avoid when starting a consulting business
Retiring CEOs often feel pulled in two directions: They’re ready to leave a high-pressure, demanding role, but reluctant to get out of the game entirely.
Before CEOs file that paperwork to incorporate, they consider these five tips to sidestep pitfalls:
1. Don’t fly solo.
If it’s lonely at the top, it’s even lonelier when you’re starting a consulting business. The burden of success falls entirely on your shoulders, and you’ll face tough decisions without the support of peers or colleagues. That includes making fundamental decisions about who your business will serve, what problems you will solve and what results you can deliver. Adding to that challenge, designing a buyer’s journey — based on an evolving understanding of the needs and mindsets of potential clients — is an enormous undertaking when you’re flying solo.
Enlist the support of peers or colleagues. This can give you a sounding board for those key decisions. These peers can vet your ideas objectively or offer new ones, so you can move forward with confidence.
2. Don’t rely solely on your old network — Expand!
The success of your consulting business will largely depend on the strength of your network. In most cases, this network is different from the one you built as a CEO. To find relevant business opportunities, invest in making new connections and building new relationships. Potentially, that could require attending industry events, getting active in online communities, conducting outreach via social media platforms like LinkedIn, speaking at conferences, and traveling nationally or internationally.
3. Building a business model from scratch? Consider a proven path.
What business model will work for your consultancy? The answer isn’t always obvious, and many consulting businesses struggle to find the right structure. Pricing, in particular, is difficult to get right; you have to find the sweet spot between earning fair compensation and satisfying client budgets. Other challenges include legal and financial issues. For example, you’ll have to identify the appropriate legal structure for your business, ensure you have all the required registrations and licenses, and develop contracts that protect your business and assets. You’ll have to implement systems and structures that ensure consistent levels of service. At a minimum, you’ll need to put together proposal templates, data-gathering forms, onboarding questions and service descriptions.
It might be easier to find a reliable business model that has a history of success and an established infrastructure built into its operation. This way, you can learn best practices for pricing, how to manage client expectations, and what level of services you should provide along with legal and financial support.
4. Devise a development plan to keep learning.
Working for a large firm gives you easy access to training and other skill-building resources. When you’re working for yourself, however, search for professional development is all on you. Plan on joining industry associations, enrolling in relevant courses, reading voraciously and seeking out expert advice on a routine basis. If you decide to pursue a career in executive coaching, a common path for former CEOs, you’ll also need to go through the proper training, particularly in interpersonal psychology and interpersonal relations, and learn to perfect those skills over time.
5. Don’t depend on referrals alone. Build your brand.
Work referrals can help you find your first client, but they’re unlikely to sustain your business for the long term. To fill your sales pipeline, invest in building your personal brand and establishing your credibility as an expert. Initially, this could involve launching an eye-catching website, publishing your thought leadership on relevant channels, establishing a digital presence and getting active on social media. But you’ll also need to consider where to spend on advertising or marketing, how to differentiate yourself from competitors, how to best communicate your value proposition and so on — all while delivering top-notch service to existing clients.
Forging a path from the C-Suite
Business consulting is just one path for you to consider post-retirement. But don’t make your choice just yet. Download Life after the executive suite: Where do you go from here? for insight on how to think through what comes next.