I just heard last night about a California state proposal to begin to require companies to withhold three percent of all monies paid to 1099 independent contractors.  MANY organizations are opposing this for the following reasons:

• Extra costs for local governments to enforce the withholding
• Extra costs for businesses to administer the withholding
• This is not incremental revenue for the state…just accelerated revenue

These are some good reasons…but I have a few more that impact me personally…

• I use subcontractors and pay at least 10 subcontractor invoices each year…I would need to do accounting/reporting/payment on each of those to the state (monthly? quarterly?)
• This is a double-hit since I would be receiving three percent less on all of my own project invoices, even though I’m already required to pay 70% of my estimated state taxes by June 30th for at least the next two years

Any of you who are independent contractors and 1) pay estimated taxes and/or 2) hire subcontractors/1099 resources will also be impacted.

The California Chamber of Commerce, California Special Districts Association, and others are encouraging anyone in opposition to this proposal to write letters to your California Senators and Assemblyman.  See this link to get the info you need to identify who to write to, including their mailing address.  See a sample letter/template to inspire your creativity (you’ll need to ‘make it your own’ since this is a template for businesses/CEOs to send).

Hearing about this proposal makes me realize that I need to stay much more informed about legislative issues that impact my business…good sources of information for small businesses and independent contractors: California Chamber of Commerce, National Association for the Self-Employed, and National Association of Women Business Owners.   We all need to stay informed!

Recently, in a spurt of ‘abundance thinking’, where I was convinced that 2010 is going to be a MUCH better year than 2009 (I can’t afford to think otherwise, can you?!), I decided to do an inventory of people/resources I can turn to when my workload is too heavy to do it all myself.

Like many fellow consultants, I can perform every function needed to support most client projects myself, but have found it very wise to outsource certain portions of my research projects when I have a heavy client load in order to ensure that my time is spent on the things that are: 1) high value activities, worthy of my $100+ hourly rate and 2) things that only I can do based on my unique talents or the client relationship.

In an effort to streamline the process when I need to turn to other resources, I created a spreadsheet that provides me with a quick glance at the resources I’ve qualified and established relationships with over the past 10 years.  Some of the features of the spreadsheet:

• Every row is a different person/resource
• The first few columns include contact information, notes about the resource and their specialty
• The rest of the columns are categories of resources such as Interviewing, Analysis, Recruiting, Panels/Lists, etc.
• I put an X in each column/category that a given resource can help with

Having this quick reference allows me to rapidly scan a given column when I have the need for support in any given area.  When I meet/qualify new resources, I add them to the spreadsheet, which ensures that I think of them when the need arises.  This saves me a LOT of time and helps me make sure I make the right choice for each project, which helps ensure high quality results for my clients.

Let’s all think ‘abundance’ for 2010 and do a similar inventory of our resources…and if you don’t HAVE back-up resources, be sure to find some…WIC is a great source of qualified people who can partner with you to help in almost any element of your work.

“If you’re not moving forward, you’re moving backward.” I can’t locate the originator of that quote; it’s been attributed to a few people. Nonetheless, consider this for a moment. There are new start-ups every day—businesses that are bringing new, different and improved services and products to the market. Have you checked on your competition lately, or asked your clients how they feel about your offerings? If you don’t want to lose your clients to the competition, you need to routinely evaluate your offerings. There is much continuous change in this world that provides opportunities for improvements and if you’re not making improvements and working to grow, your business is probably shrinking.

All businesses, regardless of size, length of existence and industry, need to continue their growth efforts—continuously. Constant change is too tumultuous and confusing, but do keep abreast of your clients’ needs and the competition’s activities and make changes over time, as it’s appropriate. Stay the same, and you’re stagnating. You’ll lose business.

Change and Growth:

A large part of growing your consulting business relies on staying in touch with your clients and reaching prospective clients within your target market. There are many methods and many reasons to communicate with your market. Growth and change provide excellent opportunities for just that.

Freshen up

Growing your consulting business doesn’t mean that you need to hire employees or add more square feet. However, it’s advisable to freshen up your business. Add new services and products and incorporate new ideas and technologies into your mix to intrigue return clients and new clients. You may modify or ‘package’ some of your current services based on client feedback or just plain common sense. You might become more efficient with new processes. You might also drop a few of those services or products that are outdated or rarely sell.

Put the Old Stuff on Sale

This is a good reason to keep in touch and drive some business. Put your “older” offerings at a deep discount sale price-for the LAST TIME. Create a clearance sale, a last chance to buy ebooks or ‘How-to’ CDs or DVDs, or last chance to experience one of your seminars before you end that offering.

Think of the retail clothing industry where there are at least four turns per year, aligning roughly with each of the four seasons. Their end of season sales provide opportunity to promote their store and the sale. They draw new and returning clients. Some of those customers who go to the store will buy the sale items, some also buy new items or maybe nothing. But they saw the notice, visited the store, saw what was available and took note. The chances of them returning are greater than if they hadn’t gotten the sale notice.

An aside here is that a key to this contact is the customers’ experience. Is it pleasant and enjoyable? Does the contact offer assistance and leave a warm friendly feeling? We don’t want pressure, only an offer–an “I’m here if you need me.” We want them to remember that connection in an emotionally positive way so they will return.

Promote the New Stuff

The second part of freshening up is adding something new or improved—thus another opportunity to connect and drive business. Give your clients a reason to notice you again.

Have you added a new service? Is there a new technology available that you now include in your repertoire, such as creating or writing blogs? Do you now offer information about or provide the process for marketing on LinkedIn, Facebook or Twitter?

What have you added to one of your seminars, workshops or webinars? Is there a new section regarding the latest technology or new business opportunities? Do you provide some or more practical aspects about your topic? Are there new chapters in your ebook?

Maybe you have new credentials. You have completed your coaching course and now coach clients through certain niche aspects of a business. Have you added a partner so that you’ve doubled your capabilities or offerings?

Do Something Good

Another “change and grow” opportunity is to have or sponsor an annual charity event. We all know how busy the holidays are, so aim for a different time of year if possible. A slower time in your related industry would be a great time to incorporate something new. To increase your visibility and success, you can partner with other, similarly focused businesses.

The opportunities for this are pretty much endless. Businesses and charity organizations collect shoes, sneakers, coats, old cell phones, books, school supplies, foods, blankets, hats, gloves, or scarves, for example. The collections can be scheduled over a month, week, week-end, or whatever is appropriate. You could also include in the mix a business that provides an activity during a live event or offers some type of gift or return to people who show up such as a discount coupon for a future purchase or a promotional item that reminds them of the charity event or businesses.

For example, if you’re in the pet sitting business, you might partner with a groomer, a veterinarian, a pet store and a pet shelter or adoption agency. For that shelter, you can collect items that they need such as used blankets, towels and sheets or used kennels, dishes, leashes and collars for when the pets go to their new home. Post notices at each of those businesses and any other location where your target market visits—online and offline. When it’s over, you have the success story to submit to assorted medias. Voila!

Your visibility comes from your opportunity to promote the event (using each of the participating business’ names) through various medias and methods and then to report the great results to your clients and the media.

Bottom Line:

A service business like consulting needs to create its own news and make sure that the news reaches the right people. Grow, change, announce your changes and events to your target market, and ask them to spread the word. Ask clients how you’re doing and make changes based on their feedback. Clean house now and then and make that another reason to contact your client base and prospects. Create new reasons for promotional communications. Let them know you’re still there—for them!

In Parts I and II of “Should I Become a Consultant,” the focus was on already-established professionals who were contemplating making the jump from corporate to consulting. If you’re a new college grad, the question takes on a whole new dimension.

I recently asked the WIC Community List members the following question, “I’m a new college graduate, and I’m thinking of going into consulting. What would you advise?” About 20 WIC consultants replied. Here’s a summary of their advice themes.

• Figure out the work about which you’re truly passionate and competent. You need to know this to drive your consulting practice.
• Get experience, mentoring, and contacts in that field.
• It’s hard to consult if you’ve never worked in the area you’re interested in pursuing. Most people in consulting have developed expertise by working for someone else in the field for a while.
• Few consulting firms hire new B.S. grads.
• Large firms generally hire MBAs. Bear in mind that those roles typically require almost fulltime travel. Most people find that pattern sustainable for no more than five years.
• Smaller regional firms may have opportunities for people with new bachelor’s degrees, but those positions are typically filled through college recruiting cycles in the fall and winter.
• Hold off on diving into consulting for a few years. As a consultant, you lose the opportunity to learn and collaborate with peers within your company or department. And this is a valuable part of the learning process, especially in your first years in a field.
• Mentoring is tremendously important. Take advantage of every opportunity to be mentored, especially in the early years of a career when there’s so much to learn.
• Consulting can be a rich and rewarding career. If you enjoy helping others, working with others, challenges, change, learning, teaching, communicating, being creative, and being an entrepreneur, this may be the right choice for you.

In Part I of “Should I Become a Consultant,” I wrote about understanding what a consultant’s life really involves, exploring the waters a bit, answering the question about whether the entrepreneurial life is right for you, and researching the field that interests you, whether its marketing, management, sales, or some other field.

Next, research specific areas and ways you can help clients.

What Problems Can You Solve Well?
Think about the types of problems you want to solve, the organizations and people with whom you want to work, and the issues you have successfully solved for an organization in the past. What challenges come to mind first? What successes come to mind quickly?

Cite some specific examples to illustrate your problem-solving history. Describe them during your informational interviews with consultants currently working in your field of choice. See if how you like to work and what you like to do is a fit with that area.

Who Needs Help with this Type of Problem?
As a first fast pass at research into your market, search Monster.com or other major job hunting sites with a few appropriate key words. See who’s hiring for those types of skills. This gives you a sense of the best markets for your services, either as an employee or as a consultant. If available, a business research tool, such as Hoover’s, can provide additional insight.

Would You Really Rather Be an Employee?
During your research, as is sometimes the case, you may find the perfect job. Pursuing one direction — consulting — can lead to full-time opportunities you might otherwise have missed or roles that you didn’t know existed. For example, you might start a career in marketing and then research the possibility of consulting, which then leads to an opportunity you really want, a full-time job in a larger company, working in corporate social responsibility.

However you resolve your curiosity or drive toward consulting, do your research first. A lot of questions will be answered in that process, which will help you decide whether or not to move further down the consulting career path.

With the current economic uncertainty, more and more people will likely be contemplating a consulting career. Odds are, if you’re reading this blog, either you know someone who’s entertaining the idea or you, yourself, are considering making the move.

So, what’s the first step in deciding to become a consultant? Start asking questions. Understand what’s involved. Explore your options. Some may think it’s easy to start, manage, and grow a consulting practice, while others may be frightened by the prospect. The only way you’ll know if it’s right for you is to do your research.

WIC members have a lot of experience in this area, so I thought I’d summarize what a few of them had to say. Hopefully, these ideas will help you answer the question.

Understand a Consultant’s Work Life
The consulting life is a good work life, in many ways. You have the opportunity to help people solve problems and achieve business results much greater than they initially thought possible. Conversely, you may not get the chance to see things play out, once you’ve made your recommendations and handed off the project. Or you may not be able to help execute the plan without being asked first.

Many of the benefits are clear—flexible hours, removed from corporate politics, and creative freedom to name a few. But what’s often not so readily apparent is that being a consultant takes A LOT of work behind the scenes.

A consultant, unless employed by a larger firm, is a small business owner, an entrepreneur, who must devote a lot of time to business development in order to thrive. The most successful consultants make it look effortless, but they’re always marketing in some way. Experienced consultants say you should expect to spend 20 percent of your time each week developing new business with new clients, a critical step to ensure continued success as the economy ebbs and flows.

Running and growing the business are satisfying, if you’re an entrepreneur at heart. But some people don’t like that part of consulting. Many people don’t realize just how much time a consultant spends running the business. In addition, we’re often re-inventing our businesses based on changes in our interests and the marketplace. That means “re-starting,” in some fashion, throughout the life of the business.

Test the Waters First
It’s important to test your entrepreneurial interest before going too far down the consultant path. Study a few issues of Inc., Fortune Small Business, or Fast Company. All of these publications address small business management quite well, as do a number of websites. Look at Fortune’s small business case studies in “Ask the Experts.” If the problems they’re solving aren’t interesting, it’s a sign you may be missing the entrepreneurial DNA that’s an important part of consulting success.

If you pass the “Am I really an entrepreneur?” test, the next step is to do your homework about the field that interests you. Select a few consultants who work in that field and approach them for informational interviews.

To find these people, search the WIC consultant database or social networking sites, such as LinkedIn. Identify several consultants with skills like yours. Contact them and request a little time in person or on the phone to learn more. Ask about their specific experience and career path, and seek advice about what you need to learn and do to prepare for a consulting career in their field.

To search for consultants in WIC’s database, use the advanced search feature (coming soon) on the Women in Consulting website.

Do Some Background Prep
Think about the types of problems you want to solve, the organizations and people with whom you want to work, and the issues you have successfully solved for an organization in the past. What challenges come to mind first? Marketing? Management? Business process? Sales? Project management? Fund raising? Infrastructure or systems?

As a consultant, you concentrate your business and marketing efforts in one specific area, not all possible avenues. It’s important—and good business—to specialize, because it makes it easy for the right clients (your target audience) to find you.

If you’re to be a successful consultant over the long-term, you have to be clear about who you are, and what you do to make your clients (organizations or individuals) more successful.

I’m asked this frequently: I’m new to consulting. I’ve got a lot of experience in my field, and I know I can be a good consultant, but I don’t know where to go to find consulting assignments.

There are four key things you should have to get consulting assignments:

• People need to know you’re out there and available to them
• Your services have to fit a client’s need
• You need to provide good value for what you offer
• Potential clients need to feel confident in hiring you

In other words, clients won’t hire you if they don’t know about you. They also won’t hire you if they don’t have a need for your services, no matter how good you are.

If they do know about you and have a current need, then they have to feel that what you’re offering is at a fair value to them and that they can trust you to provide what you say they will.

What’s important is also what’s not on this list:

• It’s not all about you.  It’s about them. Your experience is only valuable if it’s relevant to the client’s needs. Most clients wouldn’t hire a consultant without relevant experience, but they also don’t hire the person with the longest resume either. They hire the person who they think can meet their needs.
• It’s not all about Google. Yes, clients will Google you to learn more about you, but that’s after they’ve learned about you. This is a relationship business. It’s highly unlikely that a client will hire a consultant just by googling “human resources consultant” or “marketing strategy.” It’s important to build a strong online presence, but don’t count on AdWords or search optimization to bring you new clients.
• It’s not about low cost. You need to provide a fair value for your services, but clients don’t necessarily hire the lowest cost consultant around: they’re afraid they’ll get what they pay for. You need to price your services so that you provide good value to the client at a price level that fairly rewards you for the results you provide.We still see some consultants who price on an hourly or daily basis, but the Annual WIC Compensation Survey has shown us year after year that the consultants who are in the top 20% of respondents are much more likely to use value or project-based pricing and not hourly or time-based pricing.

How do you make clients feel good about hiring you?

• Be able to show them the results you’ve achieved for other organizations (without revealing any confidential information of course)
• Provide testimonials from satisfied clients
• Ask clients for referrals.

Need more information? Stay tuned to this blog for more tips and ideas. Check out our ongoing WIC programs and events too.