Source: Pixabay With 40% of the workforce expected to be independent contractors by 2020, more and more people are starting their own businesses as a means to give them more money, flexibility, and freedom. A few years ago, I took a big scary leap and joined them. I finished my PhD in psychology and dove head first into my next adventure—starting my own consulting business.
In graduate school, I had done a ton of networking and took classes on business and entrepreneurship. But nothing really prepares you for being on your own. Here are the 4 things I wish knew before I started my consulting business.
1. You need a high tolerance for uncertainty
Unlike many of my peers in graduate school, I grew up in poverty. Of course, growing up in poverty had its challenges. But it also gave me something I am now so grateful for—a high tolerance for uncertainty. As a kid, I didn’t know where I would live next month, where I would go to school, or whether we would have to go get food at the church. I got so used to that constant uncertainty that I eventually learned how to live with it.
Now, as a research and development consultant for technology companies, uncertainty is an inherent part of my job. I don't love it, but I know how to deal with it.
When I talk to people who are considering pursuing consulting, contracting, or freelance work, the one thing that most stands in their way is their fear of uncertainty. And I don’t blame them. When you are on your own, the reality is that before you know it, your paycheck might be gone. You have to not only manage the stress effectively, but manage your work effectively to prevent yourself from going completely broke. It takes hustle.
One trick that I use to manage this uncertainty is to cast a wide net. For example, I help businesses with the full research and development cycle for creating psychology-informed technology products (with a focus on creating tech that increases happiness). This means, I help with ideation & innovation, user research, things like algorithm development and scientific foundations, content creation, and finally impact analyses. Psychology informs all of these phases, so I can apply my skill set across a variety of different tasks, and as a result, get more clients.
Another trick that I rely on is to diversify. I don't accept full-time roles on any of my projects because I know when the project ends, I wont have anything to replace it. Instead, I maintain several part-time roles. When one project ends, I have others to sustain me until I can find a new project. And when I have fewer projects to work on, I spend more time writing in my blog here on Psychology Today.
Figuring out way to tolerate and manage uncertainty is key when starting your own business.
2. You need to manage your money well
These days, everyone wants the latest gadget or nicest car or whatever. As a consultant, sometimes money will come easily, and it will feel like you can have whatever lifestyle you want. But before you know it, you’ll finish up with all your projects or clients and there will be nothing new on the horizon. It’s hard to see dry spells coming, and if you aren’t saving money when times are good, the bad times will feel really bad.
The good news is that if you manage your money well, consulting gives you an incredible amount of freedom. The trick is to save money when you’re doing well – save for dry spells, for retirement, and for quarterly taxes. If you do, you can take breaks from full-time work, travel the world, and even turn down projects that you don’t want to do. That’s what I call freedom!
3. You need to be comfortable selling yourself.
Let’s face it. Sales are an integral part of every business. If you want to be a consultant, the product you will sell is yourself. It’s your personality, your skills, and the impact you can make for your clients. If you can’t sell yourself, you’re not going to be able to get clients, and then your business will go kaput.
Most of us didn't learn this skill in graduate school, but don’t freak out just yet. Selling yourself isn’t as hard as it seems. I still don’t consider myself a sales person. My goal is to help businesses build products with positive impacts on our happiness, well-being, and quality of life. So it doesn't feel like selling. It feels like collaborating to make the world better. I just have conversations with prospective clients about their needs and tell them how I can help them do what they want to do. I want them to succeed and if they also want me to succeed, then we make magic together.
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I don't know about you, but I get bored easily. I need to continue learning and growing to thrive at work. This makes me the kind of person who will frequently move from job to job, because as soon as I get good at something, I want to learn something new.
This style doesn’t make me the best employee (except in start-ups where everyone does 27 different jobs). But it does make me an excellent consultant. It means I have a wide range of experiences to draw insight from, I’m always meeting new people who can provide alternative perspectives, and I can see the broader landscape of the happiness-technology industry because I've worked with so many different companies in this space.
I’ve now used my psychology expertise to build machine learning algorithms and develop programs to boost employee well-being and design websites – all things that were completely new to me at the time. This career has given me a broader understanding of how happiness and technology fit together, and I bring this insight with me to each new project I work on. This is a huge asset and it enables me to continue to increase my rates as I gain more experience.
If you are the kind of person who loves variety, growth, and challenge, consulting can be incredibly rewarding for you. Every new project will teach you something new – not just about your work, but about yourself. You’ll get to learn from people with all sorts of backgrounds and do projects you never imagined you’d do. If you;'re more the type of person who prefers to be really great at just one task, consulting might not be such a good fit.
Do you want to start a consulting business?
What do you think? Did you discover that consulting is a good fit for you? Now what do you do? I always knew entrepreneurship was a good fit for me (I started my first business at age 15), but starting your own business can be tough.
To start, build, or grow your own consulting business, you need a guide. Someone who’s been where you’ve been. Someone who can help you navigate land mines, avoid disaster zones, and overcome common obstacles. Someone who will be your cheerleader through one of the toughest but most rewarding times of your life. If you want to build a consulting business, then check out my book: Purpose Driven Entrepreneurship: The 10 Entrepreneurship Skills You Need to Transform Your Life, Start a Business You Love, and Change the World. Get the guidance you need to take the leap and find a career you love.
To learn more, you can also find me at berkeleywellbeing.com.