Whether you’ve ever been a consultant before or not, I hope you’ll
start thinking of yourself as a consultant in 2015. You are the CEO of
your own business. Your career is your business!
You can’t let your employer run your career — not that most employers are sitting around worrying about their employees’ careers, if we are honest. You have to run your own career, and that means knowing what problem you solve for your employers.
If you think about it, a full-time employee is just a consultant with only one client. I hope you’ll take the next step in 2015 and get a consulting business card. You can consult at night and on the weekends. It’s a very good thing to do, not just for the extra income but for the mojo boost and the understanding of the market that a part-time consulting business gives you.
My daughter was just 19 when she started a music theory coaching business. She was happily surprised to find that people who pay fifteen bucks an hour for babysitting will pay thirty-five dollars an hour to someone who can teach their child to read music and understand music theory.
Some kids are really talented players or singers but they don’t know theory, and you have to pass a theory exam to get into music school.
My daughter started to pay attention to pain. Some parents had a lot of pain around music theory instruction. There is pain everywhere! No matter what sort of pain you solve, somebody has it and they will pay you to make it go away.
It doesn’t take much to start a consulting business on the side. You should talk to your accountant, but you may not even need to incorporate your consulting business. In the U.S. you can consult under your own social security number. All you need is a business card, and you can get that from any office supply store or from vistaprint online.
You will need to know your consulting rate. That’s easy to calculate! If you’re paid an annual salary right now, here’s how you will convert your annual salary to your hourly consulting rate.
Let’s say your annual salary is sixty thousand dollars. The first thing you’ll do is convert that annual figure to hours. Full-time employees work about 2000 hours per year, so let’s divide sixty thousand by two thousand. That gives us thirty dollars an hour. That won’t be your consulting rate, though, because you have to build in a cushion.
Consultants have to pay their own expenses, and they almost never bill forty hours in a week even when they consult full-time. They have to reserve time for business development. So, most consultants add a cushion of thirty to fifty percent on top of the hourly rate they calculated based on their annual salary.
If you add a thirty percent cushion to your thirty-dollar-an-hour consulting rate, you’ll get $30 x 1.3 0r thirty-nine dollars an hour. You can round it up to forty dollars an hour.
If you add a fifty percent cushion, your hourly consulting rate will be $30 x 1.5 or forty-five dollars per hour. In most metro areas in the U.S. that is considered a modest consulting rate. Most consultants charge more than that, but forty-five dollars an hour is a great rate for a new consultant. You will pick up plenty of clients charging forty-five dollars per hour!
You will feel great when you get your first client. You might get that client through your HOA, your kids’ basketball team or your place of worship. Everybody needs help with something! Some people need home and office organizing. Some people need a virtual assistant.
Some of them need help with their taxes, or writing copy for their website. Everybody is good at something, and everybody is less good at something, too!
You can’t let your employer run your career — not that most employers are sitting around worrying about their employees’ careers, if we are honest. You have to run your own career, and that means knowing what problem you solve for your employers.
If you think about it, a full-time employee is just a consultant with only one client. I hope you’ll take the next step in 2015 and get a consulting business card. You can consult at night and on the weekends. It’s a very good thing to do, not just for the extra income but for the mojo boost and the understanding of the market that a part-time consulting business gives you.
My daughter was just 19 when she started a music theory coaching business. She was happily surprised to find that people who pay fifteen bucks an hour for babysitting will pay thirty-five dollars an hour to someone who can teach their child to read music and understand music theory.
Some kids are really talented players or singers but they don’t know theory, and you have to pass a theory exam to get into music school.
My daughter started to pay attention to pain. Some parents had a lot of pain around music theory instruction. There is pain everywhere! No matter what sort of pain you solve, somebody has it and they will pay you to make it go away.
It doesn’t take much to start a consulting business on the side. You should talk to your accountant, but you may not even need to incorporate your consulting business. In the U.S. you can consult under your own social security number. All you need is a business card, and you can get that from any office supply store or from vistaprint online.
You will need to know your consulting rate. That’s easy to calculate! If you’re paid an annual salary right now, here’s how you will convert your annual salary to your hourly consulting rate.
Let’s say your annual salary is sixty thousand dollars. The first thing you’ll do is convert that annual figure to hours. Full-time employees work about 2000 hours per year, so let’s divide sixty thousand by two thousand. That gives us thirty dollars an hour. That won’t be your consulting rate, though, because you have to build in a cushion.
Consultants have to pay their own expenses, and they almost never bill forty hours in a week even when they consult full-time. They have to reserve time for business development. So, most consultants add a cushion of thirty to fifty percent on top of the hourly rate they calculated based on their annual salary.
If you add a thirty percent cushion to your thirty-dollar-an-hour consulting rate, you’ll get $30 x 1.3 0r thirty-nine dollars an hour. You can round it up to forty dollars an hour.
If you add a fifty percent cushion, your hourly consulting rate will be $30 x 1.5 or forty-five dollars per hour. In most metro areas in the U.S. that is considered a modest consulting rate. Most consultants charge more than that, but forty-five dollars an hour is a great rate for a new consultant. You will pick up plenty of clients charging forty-five dollars per hour!
You will feel great when you get your first client. You might get that client through your HOA, your kids’ basketball team or your place of worship. Everybody needs help with something! Some people need home and office organizing. Some people need a virtual assistant.
Some of them need help with their taxes, or writing copy for their website. Everybody is good at something, and everybody is less good at something, too!
Figure out your consulting
rate and pick a name for your new consulting business. It could be your
own name. When you meet new people or run into people you know, you can
give them one of your new consulting business cards. You will be happy
to see the income tax deductions you can get running a business out of
your home.
You’ll be happy to have a
few extra dollars at the end of the month, and best of all, you’ll be
running your own career rather than relying on somebody else to run it
for you.
Rock on! You are in business for yourself. Doesn’t it feel great?
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