Setting up a consultancy
Simon Frost speaks to three independent consultants for advice on adjusting to self-employment.
In our March issue, we published a letter from an experienced professional who, unable to reduce hours in his job, was considering taking the plunge to go part-time as a consultant. He noted that the Professional Development section of Materials World is often more useful for younger members. ‘One finds little help if you are stalled in mid-career and then, regarding silvertops, it is all obituaries and retrospective reflections. Yes, I am over 60 and still alive,’ he said. ‘A practical guide to setting up and running a consultancy in later years could be a popular article with older readers.’ Ask and you shall receive.
Why do it?
The thought of being one’s own boss is a regular daydream for professionals in all walks of life. Gavin Ferguson, who set up his mining consultancy in 1990, says, ‘The principal reason for me was independence – to make one’s own decisions free from stifling management.’ His freelance career has taken him to Peru and Chile, where he set up consultancies for one and five years, respectively. He led the group of consultants that helped the Peruvian Government sell the La Oroya smelter.
David Rowe specialises in refractory metals, rare earths, powder metallurgical processes and friction stir welding. Besides the appeal of independence, he says, ‘Rather than working for a particular firm, you can use your experience to help other professionals and industries to gain new knowledge and use new processes.’
Making the decision
Both Ferguson and Rowe had extensive careers that built the specialist expertise a consultant needs before going solo. Ferguson, for example, consults on technical and economic auditing, due diligence of resource and reserves declarations, strategic planning, mine planning and design, geomechanic engineering and reviewing of study reports. Rowe advises, ‘Make sure that you know your stuff and can speak with authority, especially in a niche market.’ But working knowledge is not enough on its own.
Bob Le Clerc set up as an independent mining and waste industry consultant in 2001 after a long career in mining, starting out as a geologist. ‘I was at a stage in my life where my children were grown up and there was no big mortgage to pay off, so the worry of losing a regular salary, which puts a lot of people off, wasn’t really there,’ he says. ‘You need a reasonable cushion in terms of finance if you’re starting from scratch.’ The first few months were lean for Le Clerc. ‘After about six months I got a couple of breaks – one particular client led to quite a few more jobs, and I still work with clients I gained back then.
‘You have to remember that there’s no safety net, and no one’s going to pay you when you’re on holiday or you’re ill. You can get medical cover for times you have to take off sick but it’s such bad value – I only get paid when I’m working. You will probably have bad months and initially you may be concerned about where the next pay will come from – you need to have the confidence to do that.’ But don’t be put off – as Ferguson says, ‘With skills in demand, the engineer will find clients.’
You’ve got the technical expertise, ample funds and the resolve to weather lean times. What next?
‘Getting some initial business mentoring is a good idea because it gives you someone to bounce ideas off objectively. Setting up a business on your own can be a very insular experience – things can become problems when they’re not and, likewise, real problems can go unnoticed,’ Le Clerc says. ‘You have to learn a whole range of new skills in terms of running a business.’
Your bank can offer financial advice, and there is a lot of free support available from Government organisations (see useful links, right), but private business mentoring and financial advice can also be sought. ‘I used a solicitor to set up my company,’ says Rowe. ‘This cost me around £500 and, in hindsight, I could have done it myself. The Government organisation Companies House provides good advice and the cost to register a private limited company is only £15.
‘To minimise costs, write your own Memorandum of Association, modifying standard forms as appropriate and keeping the scope as wide as possible. Work from home if possible, but don’t register your home as a place of business, otherwise you could be liable for business rates. It’s best to register as a Limited Company via your accountant and use their address, for which they do not usually charge. VAT registration is not mandatory until you have a large turnover, but it’s best to register as it looks good, especially when dealing with larger corporations.’
Spreading the word
Most importantly, you need some clients. ‘Many of the independent consultants that I know have started their consultancy based on clients for whom they worked while employed by large consulting companies,’ Ferguson says.
There are other ways to expand your custom, as Rowe suggests, ‘It’s useful to present papers to learned societies on a regular basis to get better known as an expert in the marketplace. You should also try to get as many professional qualifications as you can, as it enables you to speak with some authority and looks good on your business card, letter heading and email footer.’
‘A lot of it is to do with the contacts you have built up in your career – I’ve never really done any marketing as such,’ says Le Clerc, ‘but you have to develop the ability and confidence to go out and sell yourself to people to convince them to do business with you. Once you start working with a client, the big plus for them is that they know who they’re dealing with. Once you build that relationship it’s not like they’re working with a big consultancy, where they might meet the director once and then be dealing with all sorts of people. It’s very much a one-to-one. Sometimes it’s like you become a part of the business yourself.’
The internet, of course, is a useful tool for making your presence known and developing your client base. If you’re starting a consultancy now, you’ll benefit from a good website and widening your network through active use of LinkedIn – joining relevant groups and engaging in discussions to make your presence known. ‘You can pay for search engine optimisation,’ says Rowe, ‘but I find it better to regularly Google myself and my company to get further up the pecking order.’ Ingenious. Engineering institutes, including IOM3, also run listings for consultants on their websites.
‘Going independent is a big decision,’ says Le Clerc, ‘but it’s not one that I’ve ever regretted.’
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