Maybe you’ve been working in your industry forever, or perhaps you’re relatively new to your field but have discovered that you’ve got quite a knack for making things better. Either way, you might have heard the term "independent consultant" kicked around and wondered whether or not this career move is for you.
Before you march into your boss’s office with your letter of resignation in hand, let’s take a closer look at what an independent consultant is, the benefits and drawbacks of becoming one, the expected salary, and what you need to be successful.
What is an independent consultant?
An independent consultant is an individual with extensive experience in a specific field who a business taps and contracts to help identify what it's doing well and any areas where it might have room for improvement. Ideally, their insight and guidance will make that company more efficient, profitable, and successful.
Independent consultants can work in any field, using their backgrounds and considerable know-how to shed light on any gaps or deficiencies in a company's operations. The position is often conflated with another one known as an "independent contractor." Let's take a look at the similarities and differences between those two roles.
What’s the Difference: Independent Contractor vs Consultant
As the number of self-employed Americans grows, the titles used to describe their scope of work have become blurred. While the terms "independent contractor" and "independent consultant" are often used interchangeably, they perform different roles for their clients.
An independent contractor is a legal term referring to any non-employee that provides services to a client — so in some ways, an independent consultant is technically a type of independent contractor.
However, an independent consultant takes on more of an advisory role — offering insight to guide their clients' business decisions, shape new strategies, inform potential changes, and identify ineffective processes and procedures the company should ditch.
An independent contractor's role is much more involved. These professionals perform concrete, more tangible work. Rather than evaluating the client’s needs and then stepping away from the situation, they're hands-on — using their expertise or skills to actively accomplish tasks on behalf of the companies they serve.
Why Become an Independent Consultant
When you switch gears and enter a new endeavor in life, it’s often helpful to find out why others have found themselves drawn to the role you're pursuing. There are actually quite a few reasons why someone might decide to drop their current professional responsibilities and become an independent consultant. Let's take a look at some common ones and see if they resonate with you.
1. You feel like something is "missing".
You could enjoy your job and make a good living at it — but it might not seem fulfilling enough. Sometimes, feeling like you're not realizing your full potential is troubling enough to make you want something new. In that case, pursuing a career as an independent consultant could be a solid avenue to get more out of your professional life.
2. You want to have control over your professional life.
Between having your employer dictate your schedule, hours, and vacation time, working for someone else often restricts your personal and professional freedom. If you want some more leeway and liberty when it comes to deciding how, when, and why you work, a career in independent consulting could be the way to go.
3. You want more growth and earning potential.
If you've been in a high-level role for some time now, you're likely making enough to live more than comfortably. But that kind of compensation still has a hard ceiling — as an independent consultant, you have the flexibility and potential to break through that limit.
There's no set income limit with these kinds of roles. You don't have to settle into a role with restricted upward mobility or get caught in an "another brick in the wall" mentality.
Independent consultants have more space for professional development and uncapped earning potential. If that space for less boxed-in career and financial growth sounds appealing, a career in independent consulting is worth exploring.
4. You were laid off.
It happens to the best of us. Maybe, your company hit a rough patch. Maybe, you struggled to meet quarterly expectations. Maybe, your department was demolished. One way or another, layoffs happen — but that's not always the worst thing in the world.
In some cases, being let go gives you the ability and incentive to pursue something bigger. Becoming an independent consultant is one of the better, more straightforward ways to bring that "something bigger" to life.
5. You've always wanted to start a business.
It’s difficult to squash the entrepreneurial bug when it bites. If you feel you have the knowledge, determination, skill set, and organizational acumen to assume and overcome the challenges that come with going into business alone, you might want to consider a career in independent consulting.
Benefits and Drawbacks of Being an Independent Consultant
Is becoming an independent consultant a wise career move for you? Take a look at these benefits and drawbacks and consider whether you’re willing to take a chance.
Drawback: You'll have to deal with steep initial startup costs.
If you’ve been considering entrepreneurship for some time now, odds are you've done your research — and there's a good chance your findings have your head spinning. A lot of time, effort, and money can go into going out on your own.
For the sake of reference, let's consider the overhead of opening a restaurant. Before you ever serve your first customer, you’ll have to:
Find a building to rent or buy.
Hire a chef, waitstaff, and cleaning crew.
Find a supplier and purchase ingredients.
Buy furniture, plates, cookware, and decor.
That’s thousands of dollars of outlay before you’ll ever see a penny. As an independent consultant, you need a business license and a phone — along with a host of other costs to get your business off the ground. If you want to pursue a career in independent consulting, you need to be prepared to put up some serious cash.
Benefit: Your potential income is uncapped.
As an employee, you’ll never make more than your boss is willing to pay you. While you may see bonuses for a job well done — or receive commission if you're in sales — your company still dictates your income ceiling. As an independent consultant, you set your rates, choose how many clients you’d like to work with, and ultimately decide how much you’d like to make.
Drawback: That "uncapped potential" won't come soon or easily.
Sure, you can make as much money as you want, but that won't happen right off the bat. You’ll likely spend that first year establishing your business, getting your name out there, and ironing out any hitches and growing pains that might be holding you back.
You may make a decent living, but if you’re leaving a healthy salary at your current job, it will likely take a while before you come even close to hitting that number. Be prepared, and make sure your savings account is full enough to float you for your first couple of years.
If you’re already a well-known expert in your field with an established base of contacts, you might have a healthy stream of potential clients lining up to work with you — but don't bank on that. Preparation is key when it comes to this point.
Benefit: Flexibility and Freedom
If you’re tired of clocking in for five eight-plus hour workdays every week and sitting in an uncomfortable cubicle or commuting to work in bumper-to-bumper traffic, you’ll love the flexibility and freedom that being an independent consultant provides.
You can work the hours you want, work from home or from a comfortable office that you’ve created, and schedule your own vacations and days off. You're truly your own boss — if you want that kind of autonomy, independent consulting might be for you.
Drawback: No More Security
Having a full-time job offers some degree of certainty in your life — a regular paycheck, benefits like health insurance, vacation time, and several other safeguards that give your professional life structure and a safety net.
As an independent consultant, you are truly on your own. You need to supply your own insurance, budget for vacation time, and make sure that you’re making enough each month to cover your professional and personal bills.
A Little Bit of Both: You'll Have to Hustle
Clients won't drop out of the sky. You'll probably need to reach out to your existing contacts, network to meet new ones, and put your expertise out there in the form of thought leadership content. If you don’t hustle, you won’t get clients. If you don’t get clients, you won’t be an independent consultant for very long.
But in some ways, this point is a plus. Taking on these challenges and working hard can be extremely gratifying. Rolling up your sleeves and making it all happen for yourself, by yourself can be a major boost to your self-esteem and accelerate your professional development. Life as an independent consultant is a grind — but all that grinding can make you a better person and make your life that much more fulfilling.
How Much Does an Independent Consultant Make?
When you work for someone else, you are generally paid by the hour or salaried — which often means you're working more hours than you should. As an independent consultant, you have the choice of charging by the hour, by the project, or by retainer.
So, how much can you actually make?
Of course, the answer is “as much as you can” but there are a lot of factors involved. These include:
Where do you live and work?
What type of industry are you consulting in?
How much experience do you have in your industry?
Do you have a specific education, certifications, or skills?
How much are you willing to work for?
How much are your clients willing to pay?
And finally … what does the average consultant make?
Successful independent consulting is an art form, and honestly, not everyone is cut out for this career. To succeed and build a thriving and long-lasting consulting business, you must be:
1. Be willing to hustle.
Yes, we said it before but it bears repeating. If you aren’t willing to put yourself out there and go after your dreams, you’ll constantly struggle to bring in clients.
2. Be confident in your experience and accomplishments.
This doesn’t just mean that you need self-confidence — it means that you actually have to be good at what you do. You need a proven track record of delivering results.
3. Develop and demonstrate organizational skills and patience.
You need to be able to set up your own business — or afford the experts that can help you — and treat your independent consulting careers as a business despite the relatively low start-up costs and overhead. Remember that you won’t get rich overnight. Stick with it and you will begin to see the rewards.
4. Create a niche for your services.
There are a lot of consultants in the world, and you need to know and communicate what makes you different and worth your fee. Look at your experience and what you are passionate about. Somewhere in the middle lies your niche.
Insureon looked into the top 12 in-demand consultant jobs based on search demand and found that IT consultants, marketing consultants, financial consultants, HR consultants, legal nurse consultants, management consultants, tax consultants, social media consultants, leasing consultants, education consultants, small business consultants, and security consultants to be the most popular. That being said, follow your expertise, not the market trends.
5. Understand who you can help.
As important as it is to know who you are, it’s also important to know who your ideal client is. What problems are they having? How big is their business? What keeps them up at night? Understanding them will help you attract clients more easily and deliver results.
Becoming an independent consultant in your field of expertise can be an excellent move whether you are at the height of your career or have retired and are looking to fill some time and pad your retirement income.
Doing your homework before you make things official will help create a smoother transition into entrepreneurship and help increase your chances of success. Now go ahead, your future clients are waiting for you.
Originally published Oct 6, 2021 7:00:00 AM, updated October 06 2021